10 December 2009

POST MERGER: CATALPA FOCUSSED ON FURTHER GROWTH

Catalpa Resources Limited (ASX:CAH), becomes Australia?s newest gold producer, following approval of the merger with Lion Selection Limited by the Supreme Court of Victoria on 27 November 2009. The scheme will be implemented on 10 December 2009 and the new Catalpa shares issued as consideration will commence trading on ASX on 11 December 2009.

Bruce McFadzean, Catalpa Resources? Managing Director said as per the terms of the merger Catalpa will also receive Lion Selection Limited?s pro-rata share of revenue accrued since 1 August 2009 from its 30% stake in the 100,000 ounce per annum Cracow Gold Project.

This provides circa 9,600 attributable ounces of gold generating positive cash flow to Catalpa of approximately A$3.5m (unaudited) in the four months to 30 November 2009.

?It?s great to be a cash-flow positive, producing gold Company.?

?The merger with Lion has been a very positive step in our journey towards becoming a mid-tier gold producer.?

?The consolidated company now boasts a Mineral Resource of 1.9 million ounces and an Ore Reserve of 1.02 million ounces of gold.?

?We are also confident that both our Cracow and Edna May Gold Operations can offer further reserve and resource growth potential, with ongoing exploration programmes at both operations?

?At Edna May, exploration work in 2010 will focus on a pipeline of resource targets including the identified underground extentions (>300m below surface), the prospective Golden Point Resource, expansion of the Greenfinch Reserve as well as further regional exploration targeting Edna May analogies.?

?The Edna May Operation is set to deliver attractive annual cash-operating margins when it reaches full production next year, the revenue from which will fund the Company?s growth strategy. In parallel we are proactively and continually assessing appropriate merger and acquistion opportunities.?

?In the mean time, we remain focussed on delivering the Edna May Gold Project within budget and on schedule to produce first gold in June 2010.?

?The Project is circa 60% complete with concrete and civil works finalised, refurbishment and fittings well advanced ahead of the commissioning phase which kicks off May 2010.?

Consolidated Mineral Resource Statement (including Ore Reserves):

The accompanying statement of Mineral Resources conforms to the Australasian Code for Reporting of Exploration results, Mineral Resources and Ore Reserves (the JORC Code) 2004 Edition and is summarised in the following table:

Consolidated Ore Reserve Statement:

The accompanying statement of Ore Reserves conforms to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore reserves (the JORC Code) 2004 edition.

ENDS

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 A$106M in debt and equity to advance its A$92M 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 previously its largest shareholder, Lion Selection Limited, merged their respective gold assets to bring together Lion Selection?s 47% shareholding in Catalpa?s 100% owned and operated 100 000 ounces pa Edna May Gold Project in Western Australia and Lion Selection?s 30% stake in the Newcrest managed, 100 000 ounces pa Cracow Gold Project in Queensland, under Catalpa?s experienced management team. As part of the merger, Catalpa also acquired a pre-emptive right over Newcrest?s 70% stake in Cracow.

With effect from the implementation of the merger on 10 December 2009, Catalpa is a cashflow positive gold producer from its 30% stake in Cracow.  From mid 2010 when production commences at the Edna May Gold Project Catalpa will produce more than 130 000 ounces 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 Gold Project.  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.

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

Competent Person Statement

The information in this report has been compiled by Mr Adrian Pelliccia (Manager Geology), who is a Member of the Australasian Institute of Mining and Metallurgy (AUSIMM) and a full-time employee of Catalpa Resources Limited. He 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 Pelliccia consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

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