14 January 2009

CATALPA FEASIBILITY STUDY RESULTS

Highlights

Positive Feasibility Study results from the Edna May Gold Project indicating robust economics at current Australian dollar gold prices:

u         738,000 ounce Ore Reserve

u         676,000 ounces recovered

u         64% Proved Ore Reserve

u         Processing 2.8 Mtpa ramping to 3.2 Mtpa from year 3

u         6.3 year mine life

u         Average annual production in excess of 100,000 ounces

u         Cash Operating Costs pre 4.5% Royalty of $636 per ounce

u     Cash Operating Margin (post Royalty) of $343M at A$1,200/oz gold price

u         Low waste:ore strip ratio of 1.9:1.0 (post pre-strip)

u         Metallurgically simple and consistent at ?92% recovery

Catalpa Resources Limited (ASX:CAH), today announced a positive outcome for the 2008 Feasibility Study (FS) of the Edna May Gold Project, 300 kilometres

east of Perth.

Bruce McFadzean, Managing Director of Catalpa commented;

"The FS findings demonstrate that the Edna May Gold Project has an excellent cash flow and mine life at today's Australian Dollar gold price. The robust

cash flow is despite Feasibility Study capital and operating cost estimates being attained during the resources peak in 2008. It should be noted that with

the recent softening of the commodities sector, we consider the cost estimates are robust and the likely future downward pressure on capital and operating

costs will only further benefit the project."

"The project has been extensively drilled, tested and reviewed metallurgically, geotechnically and geologically which provides for lower project risks than has

been evident in the gold industry of late. A 64% 'Proved' Ore Reserve is not typical of gold projects today"

"The project assumes capital costs of A$92M which is inclusive of a twelve month plant construction, seven month pre-strip, first fill, infrastructure, accommodation and working capital for the project."

The FS excludes the Greenfinch Resources which will be included in an updated mine plan following further drilling scheduled for the current quarter.

Key project assumptions are as follows;

u                        Resource optimised at A$1025/oz gold price;

u                        Pit designed and reconciled to A$1025/oz optimised shell;

u                        Process plant throughput;

u     Year 1 - 2.7Mtpa (ramp up);

u     Year 2 - 2.8Mtpa;

u     Year 3 onward 3.2Mtpa;

u                        Project capital including 7 month pre-strip, working capital, etc - A$92M including contingencies;

u                        Project construction schedule 12 months.

*               excludes Inferred Ore Resource 8.4Mt

**              process plant throughput ramps up to 3.2Mt in year 3

The high 'Proved Ore Reserve' category of 64% of total Edna May Ore Reserve is further testament to the quantity and quality of the drilling undertaken on this project over the past 25 years. There are few projects in the Australian gold industry with this level of Ore Reserve confidence.

The project has sound economics at current Australian gold prices. The average annual operating cashflows are significant and consistent allowing Catalpa to grow and develop towards being a mid tier gold producer within 12 months of finalising funding.

Pit Design and Mining

The mine has a low life of mine strip ratio below 1.9:1.0 after completion of the 7 month pre-strip. The pre-strip is scheduled during the second half of the process plant construction. The pit wall angles are derived from extensive geotechnical review where seven separate slope design domains apply to the pit design.

The pit will be mined in four stages which have been designed based on three optimised gold price economic boundaries at A$600/oz, A$800/0z and A$1,025/oz.

The low strip ratio nature of the Edna May Reserve allows the mine to employ a single mining fleet for the mine life, except for a 12 month period from year 3.5 when a second mining fleet will transported to site. The FS utilises the fact that the mine site is within 3 hours drive from Perth and Kalgoorlie and mining equipment and service personnel are freely available and locally accessible. This approach is in line with Catalpa's operating objectives to utilise the benefits associated the Edna May Gold Project location which is within one kilometre of the Westonia town site.

The Westonia town site is within five minutes drive from the process plant and provides for extensive conveniences and recreational facilities for Catalpa's employees and service providers.

Process Plant

The process plant design and flow sheet provide for a conventional SABC FF circuit (SAg mill Ball mill pebble Crusher Feed Forward). The process Ore has been extensively tested and is metallurgically simple, consistent with a typical metallurgical recovery of approximately 92%.

The process plant was purchased and transported from the Big Bell mine site to the Edna May Gold Project in 2007. Key plant components have been stored under cover in Perth since then. The process plant consists of a 2.0kW SAG mill and a 3.7kW Ball Mill along with all other components necessary to reconstruct the plant. As part of the plant upgrade to 2.8Mtpa the following changes to the flow sheet have been designed;

u         New primary crusher, coarse ore storage and reconfigured reclaim;

u         Reconfigured pebble management

u         60% increase in leach and absorption capacity;

u         Upgrade to gravity circuit;

Catalpa's mine and processing schedule demonstrates an average annual gold production of more than 100,000 ounces recovered.

The process plant has a twelve month construction period scheduled to commence at the completion of project funding.

Additional Mine Life

Further extensions to project life and improvements to the already robust economics are planned following the release of additional Ore Reserves from the Greenfinch Resource which is scheduled for further infill drilling in the current quarter.

Additionally, project economics will be further improved from continued drilling of the Edna May deposit below the present FS pit and further drilling of the deeper underground targets scheduled for the first six (6) months of the 2009 calendar year.

"With the recent appointment of Stuart Pether as General Manager Operations, we have almost completed the formation of the Senior Management team. This team possesses considerable technical, project and operational skills and experience to enable Catalpa to successfully move Edna May Gold Project into production," Bruce McFadzean said.

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) 9485 1254

Competent Person Statement

The information in this report that relates to mineral resources is based on work completed by Mr Nicolas Johnson, who is a Member of the Australian Institute of Geoscientists.  Mr Johnson is a full time employee of Hellman and Schofield Pty Ltd 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 2004 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.  Mr Johnson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The reported Ore Reserves have been compiled by Mr Harry Warries.  Mr Warries is a Member of the Australian Institute of Mining and Metallurgy and an employee of Coffey Mining Pty Ltd.  He has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Competent Person as defined in the 'Australasian Code for Reporting of Mineral Resources and Ore Reserves' of December 2004 ("JORC Code") as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia.  Mr Warries gives Catalpa Resources Limited consent to use this estimate in reports.

ABOUT CATALPA RESOURCES

Perth-based Catalpa Resources Limited (ASX: CAH) aims to become Australia's next mid tier producer by developing its open pit assets, located on its extensive and wholly-owned mining tenements in Western Australia.

Catalpa is on the cusp of a new phase of development towards production at its Edna May Gold Project, 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.

Notably, there have been three previous successful mining programs which have occurred both above and below the planned open pit at Edna May, which significantly reduces the risk of Catalpa's project. 

Catalpa has an experienced and innovative Board and management team that is committed  to realising a timely production and cash flow profile from the development of the Edna May open pit resources.

This is the company's immediate strategy; and an update to the Company's 2006 Edna May Gold Project Feasibility Study is presently being reviewed by the Board. In preparation for planned production at Edna May, the Company relocated its 2.8mtpa Big Bell mill to site in 2007.  The mill is being maintained 'ready for construction' adjacent to the proposed plant construction site.

Catalpa is pursuing parallel growth with a renewed exploration programme underway on it's 880km? of under-explored Westonia Greenstone Belt, and is reviewing other regional opportunities for acquisition and/or joint venture. In particular, Catalpa seeks to identify and develop new projects and/or acquisitions on its extensive land holding or within the region, which is prospective for gold, nickel and base metals.

Catalpa has a sound Resource base at Edna May with significant upside to grow Resources and Reserves and move towards production. With a buoyant outlook for the gold price, the Company's Board believes that Catalpa Resources presents a sound investment opportunity with significant upside potential.

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

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