3 March 2009

CATALPA?S EDNA MAY GOLD PROJECT ? APPROVAL OF FINANCE FACILITY

Highlights

?        A$67.5M project finance facility with Macquarie Bank Limited

o       A$55M secured loan facility

o       Up to A$10M mezzanine facility

o       A$2.5M performance bond facility

?        Gold hedge facility at A$1,544 per ounce

Catalpa Resources (ASX:CAH) has agreed the terms of a credit approved Project Finance Facility for the Edna May Gold Project.

The Facility which is underwritten by Macquarie Bank Limited is a significant milestone in the development of the Edna May Gold Project.  The Facility comprises a secured loan of up to A$55M, a standby mezzanine facility of up to A$10M, a A$2.5M performance bond facility and a gold hedging facility.  The term of the Facilities concludes in the 2015 financial year.

The Facility raises a significant portion of the A$92m required to develop the Edna May project.  Bruce McFadzean, Catalpa Resources? Managing Director commented: ?This is a significant milestone in the recommencement of gold production at the Edna May Gold Project.  The Project has exceptional economics at a gold price of A$1,544 per ounce, which is forecast to realise an average annual cash operating margin of A$90 million (post royalty).

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.  This provides a significant platform to grow a mid tier gold production company.  The strong cash flow forecast from the Edna May Project will enable Catalpa to expand through exploration and acquisition.?

Under the hedging facility, Catalpa has sold forward 352,316 ounces of gold at an achieved fixed flat forward price of A$1,544 per ounce for delivery from commencement of operations, into the 2015 financial year.  This represents 24% of Edna May?s Resource and is prior to an update to the Greenfinch Resource and Reserve expected in April 2009 (as contemplated in the ASX announcement of 18 February 2009). 

In conjunction with entering into the project finance commitment, Catalpa has agreed to issue Macquarie Bank with options over fully paid ordinary shares in Catalpa.  The number of options to be issued is equal to the amount provided under the mezzanine facility divided by the option exercise price (which will be set at a 25% premium to the price at which Catalpa issues shares under the equity component of the project funding).  Half of the options are to be issued within two months with the balance to be issued following first draw down under the mezzanine facility (if required).

To assist completion of the project funding, Catalpa?s major shareholder, Lion Selection Limited (ASX:LST) has indicated that, subject to finalisation of the offer terms, including a minimum of $30M equity raised, it is prepared to contribute A$15M of this amount. Catalpa has engaged Austock Corporate Finance Pty Limited to manage the equity raising.

The provision of the Project Finance Facility is subject to a number of conditions precedent which are largely standard, and include the execution of full documentation and completion of an equity raising.

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

Competent Person 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.

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

Catalpa Resources Limited (ASX: CAH) has finalised a bankable feasibility study (FS) to advance its A$92 million Edna May gold Project towards production and is currently finalising project funding.

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.

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 and new Reserve 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.

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