CATALPA

RESOURCES

MID TIER GOLD

PRODUCER
 CORPORATE DIRECTORY CONTENTS

DIRECTORS SHARE REGISTRY Profile 1

John Rowe Security Transfer
Non Executive Chairman Registrars Pty Ltd Chairman’s Report 2
Bruce McFadzean 770 Canning Highway Review of Operations 8
Managing Director Applecross WA 6153
Barry Sullivan Telephone Directors’ Report 24
Non Executive Director (618) 9315 2333
Auditor’s Independence Declaration 36
Murray Pollock Facsimile
Non Executive Director (618) 9315 2233 Corporate Governance Statement 37
Nigel Johnson Email
Non Executive Director registrar@securitytransfer.com.au Income Statements 41
Balance Sheets 42
COMPANY SECRETARY AUDITORS
Graham Anderson PKF Statements of Changes in Equity 43
Leonard Math BGC Centre Level 7
28 The Esplanade Cash Flow Statement 44
SENIOR MANAGEMENT Perth WA 6000 Notes to the Financial Statements 45
Erik Palmbachs Telephone
Chief Financial Officer (CFO) (618) 9278 2222 Independent Audit Report 79
Stuart Pether Facsimile
Directors’ Declaration 80
General Manager Operations (618) 9278 2200
Adrian Pelliccia Email ASX Additional Information 81
Manager Geology perth@pkf.com.au
John Fraser
Resident Manager STOCK EXCHANGE LISTING
Nick Winnall Securities in
Manager Exploration Catalpa Resources Limited
are listed on:
REGISTERED & PRINCIPAL
OFFICE Australian Stock Exchange Limited
Level 1, 9 Havelock Street Home Branch – Perth
West Perth WA 6005
Telephone ASX Code – CAH, CAHO, CHOB
(618) 9321 3088
Facsimile WEBSITE
(618) 9321 8804 www.catalparesources.com.au
Email
manager@catalparesources.com.au

CATALPA RESOURCES ANNUAL REPORT 2009

 HIGHLIGHTS

• Edna May Ore Reserve increased by more than 50% to

817,000 ounces
• Edna May GOLD PROJECT Feasibility Study finalised with
attractive margins to fund future growth
• More than A$106 million raised to ensure Edna May GOLD
PROJECT is fully funded through to first gold production
in mid 2010
• Mining and Environmental Approvals secured
• CONSTRUCTION of the Edna May GOLD PROJECT gold processing
plant and site earthworks well advanced
• Attractive merger terms with Lion Selection to achieve a
platform for growth and an early production and cash flow
profile by December 2009

COMPANY PROFILE

Perth-based Catalpa Resources Limited in Queensland, under Catalpa’s experienced

(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 Gold Project to
production in the June quarter 2010.
As part of the Edna May finance facility, Catalpa
has sold forward 352,317 ounces of gold at an
exceptional price of A$1,557.50 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 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
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 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 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.

01
 CHAIRMAN’S
REPORT

CATALPA RESOURCES ANNUAL REPORT 2009

Dear Shareholders Gold Project Reserve referred to previously and
extend the project mine life beyond seven years,
No doubt 2010 will be remembered in Catalpa’s
providing a significant boost to project cash
history as the year in which the Company achieved
operating margins.
first gold production at its flagship Edna May Gold
Project in Westonia, WA. It should be recorded In addition, a regional (infill) auger geochemical
however that it is the remarkable achievements sampling programme has yielded positive results
in 2009 that have set Catalpa on a clear course to within 10 kilometres of Edna May and provide a
becoming one of Australia’s leading mid-tier gold number of exciting targets for follow up RAB drill
producers. testing. Towards the end of the financial year,
a RAB drilling programme further extended the
FY2009 began with this vision clearly in our sights.
known strike of the Edna May Gneiss, the host
With the re-naming of the Company as Catalpa
rock for the gold mineralisation, to the West of the
Resources we set out to advance the Edna May
Greenfinch deposit.
Gold Project towards production by mid-2010.
We remain confident that the Edna May Gold
Certainly the Australian gold price which traded
Project provides Catalpa with a significant
between A$1,100 and A$1,500 per ounce for
platform for growth, not only through exploration
much of the year, was in our favour, and combined
but also by delivering early cash flows to repay
with the positive feasibility study completed
debt and fund potential acquisitions.
in January 2009 for a very profitable six-year
operation, provided the alchemy to turn Catalpa’s During the year the opportunity arose to negotiate
Edna May Gold Project from vision to reality. mutually attractive merger terms with Catalpa’s
largest shareholder, Lion Selection. Essentially,
The combination proved equally attractive to
the merger will amalgamate Catalpa’s 100,000
the market, and against the most challenging
ounces pa Edna May Gold Project (in which
economic backdrop in several decades, Catalpa
Lion Selection have a 46.9% shareholding)
secured a A$67.5M project finance facility,
and Lion Selection’s 30% ownership of the
including an unprecedented forward sold gold
Newcrest-managed 100,000 ounces pa
price of A$1,557.50 for 352,317 ounces over its
Cracow Gold Project in Queensland, under
first five years of production.
Catalpa’s existing management.
The debt facility was rapidly followed by
Since announcing the merger in June, the market
A$31.4M Share Placement, and a well
has responded extremely positively, with shares
supported Share Purchase Plan for an
in both Catalpa and Lion Selection increasing
additional A$7.5M, which all together raised
by more than 50%. The implied market support
more than A$106M, ensuring the A$92M Edna
echoes the unanimous conviction of Catalpa
May Gold Project, construction program is fully
and Lion Selection Directors, who intend to vote
funded to production in 2010.
in favour of the merger, in the absence of a
By the end of the financial year, just two months superior proposal.
after the successful funding process, considerable
This transaction is an innovative means to
progress had been made on the project; the
unlock value for both sets of shareholders. When
major project contractors were appointed and
finalised in the last quarter of the 2009 calendar
the accommodation village was constructed and
year, the 30% stake in Cracow will yield Catalpa
is occupied by contractors undertaking the early
an immediate production and cash flow profile.
earthworks, and process plant refurbishment
activities on site. But for now, Catalpa’s experienced Board and
management team remain focussed on achieving
Likewise, Catalpa recorded some significant
first gold production at Edna May, on schedule
exploration and resource optimisation
and within budget.
achievements in 2009. During the year the Edna
May Gold Project Reserve was increased by more For the admirable progress towards this goal
than 50% from 544, 000 ounces to 817,000, in the past year, I commend Catalpa’s Board
some 61% of which is in the highest confidence, of Directors, its management team, under the
JORC ‘Proved’ category. excellent leadership of Bruce McFadzean and
each and every one of Catalpa’s employees and
Catalpa has a clear strategy to increase the Edna
contractors, who without exception have risen
May Ore Reserve to more than a million ounces
to the challenge and workload wrought by our
by 2010, and further extend the life of mine
transition from explorer to producer.
beyond ten years. Exploration activities during
2009 underpin this potential. Thank you also to our shareholders, long-standing
and new, for your support as we progress,
The Edna May Underground Project yielded
rapidly, towards a productive and profitable, mid-
encouraging results from all six drill holes aimed
tier gold Company.
at confirming the continuation of the Edna May
high grade reef structure at depth, supporting
Catalpa’s view that the project is prospective for John Rowe
an underground operation in the future. Chairman
Exploration and resource definition drilling at the
Greenfinch deposit, along strike of the existing
Edna May open pit, resulted in a maiden ore
Reserve of 79,000 ounces as announced to
market in April 2009. The Greenfinch ounces
contribute to the 50% increase in the Edna May

03
 BOARD OF
DIRECTORS

CATALPA RESOURCES ANNUAL REPORT 2009

John Rowe BSc (Hons), ARSM, MAusIMM
Non Executive Chairman
John Rowe brings a wealth of geological and business development
skills to the Company. Mr Rowe has 39 years experience within
the Nickel and Gold industries of Western Australia. He has
held a variety of positions in mine management, exploration
and business development and was previously employed as an
Executive of Lion Ore in Australia.
Mr Rowe is also a Non Executive Director of Panoramic Resources
Limited (PAN).

Bruce McFadzean Dip Mining

Managing Director
Mr McFadzean, a mining engineer, brings over 30 years
of management, mining, processing and project “start up”
experience to the organisation, half of which was gained in the
employ of global resources brands, Rio Tinto and BHP Billiton. Mr
McFadzean has broad commodity experience in gold, iron ore,
diamonds and nickel/cobalt and in a wide range of roles including
corporate, managerial, technical and operational.
Mr McFadzean is a Non Executive Director of Venture Minerals
Limited.

Barry Sullivan BSc (Hons), ARSM,

FAusIMM, MAICD
Non Executive Director
Mr Sullivan is an experienced and successful mining engineer
with a career spanning 40 years. His initial mining experience
was gained in the South African gold mining industry, followed by
more than 20 years with Mount Isa Mines. In the final 5 years of
his tenure with MIM, Mr Sullivan was Executive General Manager
responsible for the extensive Mount Isa and Hilton operations.
More recently, Mr Sullivan has been working with a number of
smaller exploration and mining companies.
Mr Sullivan is a Non Executive Chairman of Exco Resources, Non
Executive Director of Lion Mining also a Non Executive Director
for Lion Selection.

Nigel Johnson CA, CFTP (Snr), MAICD

Non Executive Director
Mr Johnson is a Charted Accountant with strong finance and
management experience attained over a period of 36 years in
both publicly listed and private companies and within a number
of industries.
Mr Johnson has significant expertise in financial management,
equity and debt raisings, treasury and financial risk management
and strategic and business planning. Most recently, Mr Johnson
was Chief Financial Officer for Straits Resource Limited,
responsible for the financial, commercial and treasury activities
of the Straits Group.
Mr Johnson is also a Non Executive Director of Matrix Composites
and Engineering Limited.

Murray Pollock MAICD

Non Executive Director
Murray Pollock is a businessman with 40 years experience within
the mineral resource sector, principally in drilling. Mr Pollock is
a drilling and mine management services consultant for several
companies.

05
 Catalpa Name Reflects
New Vision
On 3 September 2008, following overwhelming
shareholder approval, the Company changed
its name and commenced trading as Catalpa
Resources Limited on the Australia Securities
Exchange (ASX) code CAH. The new name better
reflects the Company’s forward-looking focus and
direction, and the timing of the name change was
opportune as the Company entered a new phase
of development towards production at its Edna
May Gold Project.
Fully Underwritten
Renounceable Rights Issue
CORPORATE On 3 October 2008 Catalpa undertook a fully
underwritten renounceable rights issue, offering
one new share and one free attaching option for
every two shares held at an application price of
2 cents per share. The free attaching option with
an exercise price of 10 cents each expire on 31
October 2011. The Rights Issue raised some
A$3.5M before costs, to provide general working
capital to fund the Company’s Edna May Gold
Project Feasibility Study and ongoing exploration
program. Shareholders who participated in
the Rights Issue have had significant growth in
their investment.

Executive Appointments
Catalpa’s management team was strengthened
considerably during the period under review, as
the Company set out to appoint an experienced
management team to oversee the transition from
explorer to producer.

CATALPA RESOURCES ANNUAL REPORT 2009

BRUCE MCFADZEAN
Managing Director
Mr McFadzean, a mining engineer, brings over 30 years
of management, mining, processing and project “start up”
experience to the organisation, half of which was gained in
the employ of global resources brands, Rio Tinto and BHP
Billiton. Mr McFadzean has broad commodity experience
in gold, iron ore, diamonds and nickel/cobalt and in a wide
range of roles including corporate, managerial, technical and
operational. Mr McFadzean is a Non Executive Director of
Venture Minerals Limited.

Mr Stuart Pether
General Manager Operations
Mr Stuart Pether was appointed as the Company’s General
Manager Operations with effect from 12 January 2009. Mr
Pether is an experienced Mining Engineer and holds a BEng
(Mining). He has an impressive resume with over 20 years
hands-on and technical experience in the resources sector.

Mr Erik Palmbachs
Chief Financial Officer
On 20 October 2008 Mr Erik Palmbachs joined Catalpa as
the Company’s Chief Financial Officer. Mr Palmbachs is an
experienced CFO with an MSc in Mineral Economics and a
Bachelor of Business (Accounting). He is a member of the
Australian Society of Accountants (AASA, CPA) and has an
impressive resume with 29 years hands-on experience, much
of which was gained in the resources sector.

Adrian Pelliccia
Manager Geology
Mr Adrian Pelliccia joined Catalpa on 23 March 2009 in the
role of Manager Geology. Mr Pelliccia holds a B.Sc. Hons
(Geology), a Postgraduate Diploma in Applied Finance and
Investment and is a Member of the Australasian Institute of
Mining and Metallurgy. He has worked in various operational,
technical and corporate roles in his career within the gold and
nickel industries of Western Australia and Victoria.

NICK WINNALL
Manager Exploration
Mr Winnall holds a BSc (Hons) in Geology and is a Member of
Australasian Institute of Mining and Metallurgy. Mr Winnall has
30 years of experience in his field, with 20 years experience
as an exploration manager in Western Australia. Notably, Mr
Winnall headed up the team in Meekatharra that found in excess
of 3 million resource ounces of gold between 1992 and 1998.
Mr Winnall is equally experienced in greenfield exploration
and orebody extension, using numerous geophysical and
geochemical techniques.

John Fraser
Resident Manager
Mr John Fraser was appointed as the Resident Manager for the
Company’s Edna May Gold Project, with effect from 23 August
2009. Mr Fraser is an experienced Metallurgist with a BSc
(Engineering) in Metallurgy. He has more than 25 years of
operational, managerial and commissioning experience.

07
 EDNA MAY
Gold Project
BANKABLE
FEASIBILITY
STUDY
Towards the end of 2008 considerable management
attention was given to finalising the revised
Feasibility Study for Catalpa’s Edna May Gold
Project. A number of positive changes occurred to
the key inputs driving the economics of the project
since it was previously assessed in 2006. The
gold price increased by approximately 40% from
2007 and the Australian Dollar (A$) gold price was
further buoyed by our currency’s weakening against
the American Dollar. For much of 2009 gold traded
between A$1,100 and A$1,500 per ounce.
In addition to a more favourable gold price, the
Edna May Gold Project process plant flow sheet
was redesigned with an increase in capacity from
2.2Mtpa (2006 Feasibility Study) to 2.8 – 3.2Mtpa.
This step improvement in processing plant capacity
positively impacted on production cost and
economies of scale.
At the same time, the Edna May orebody was re-
optimized at a gold price of A$1,025 per ounce,
which, combined with an improved cut back and
mining strategy, significantly improved the Edna
May Gold Project production profile.

CATALPA RESOURCES ANNUAL REPORT 2009

Key Assumptions
and Findings
During the December quarter the Feasibility Study
(FS) was finalised and the financial model populated
with study physicals, costs and revenues, outlining a
100,000 ounces per annum gold mining operation
with very attractive annual cash operating margins
based on the following key project assumptions:
• Resource optimised at A$1,025 PER
ounce gold price;
• Pit designed and reconciled to
A$1,025 PER ounce optimised shell;
• Process plant throughput;
• Year 1 – 2.7Mtpa (ramp up);
• Year 2 – 2.8Mtpa;
• Year 3 onward 3.2Mtpa;
• Project capital including 7
month pre-strip, working
capital, etc - A$92M including Strip ratio post
contingencies;
• Project construction schedule
of 12 months.
Feasibility Study
Project Physicals
Total Measured and Indicated
*29.9Mt
Mineral Resource (0.5 g/t COG)
Total Ore Reserve
19.1 Mt
(0.5 g/t COG)
% Proved
64%
Ore Reserve
Strip ratio total
2.1:1.0
project (W:O)
1.9:1.0
pre-strip (W:O)
* excludes Inferred Mineral Resource 8.4Mt
** process plant throughput ramps up to 3.2Mt in year 3
Project capital and operating costs were compiled
from written submissions from engineering
and equipment suppliers, and other service
providers at the peak of the mining boom in July
2008. These costs are now considered to be at
the ‘high’ end of likely capital and operating
cost estimates.
The FS outlined attractive average annual cash
operating margins for the project. Feasibility
Study – estimated revenue and operating costs:
• Gold Price of A$1,200 per Ounce
• Operating Cost A$430M
• Cash Operating Margin
(post royalty) A$343M
• Average Cash Annual Operating
Margin A$54M
• Average Cash Cost per Ounce
(pre royalty) A$636
Pit Design and Mining
The mine has a low ‘life of mine’ strip ratio below
1.9:1.0 after completion of the seven month
pre-strip. The pit wall angles are derived from
extensive geotechnical review where seven
separate slope domains where applied to the
pit designs.
The pit will be mined in four stages which have
been designed based on three optimised gold
price economic pit shells at A$600 per ounce,
A$800 per ounce and A$1,025 per ounce. The low
strip ratio nature of the Edna May deposit
allows the mine to employ a single mining
fleet for most of the mine life.
Process Plant
The process plant design and flow sheet
provide for a conventional carbon in leach
(CIL) process and SABC FF (SAG mill Ball
mill pebble Crusher Feed Forward) circuit.
The ore has been extensively tested and
found to be metallurgically consistent with
a typical metallurgical recovery of
approximately 92%.
Mill Throughput **2.8Mt
Metallurgical recovery ≈92%
Recovered ounces 676,000
Mine Life (post pre-strip) 5.8 years
Processing Life 5.8 years
The process plant was purchased and transported
from the Big Bell mine site to the Edna May site
in 2007 with key plant components stored under
cover in Perth. The process plant consists of
a 2.0kW SAG mill and a 3.7kW Ball Mill along
with other components necessary to reconstruct
the plant.
As part of the plant upgrade to 2.8Mtpa the
following changes to the process flow sheet
were designed:
• Implementation of ‘mine to mill’ ore
management process;
• New primary crusher, coarse ore
storage and reconfigured reclaim;
• Reconfigured pebble management;
• 60% increase in leach and
absorption capacity; and
• Upgrade to gravity circuit.
The mine and processing schedule will allow
average annual gold production of more than
100,000 ounces recovered. The process
plant has a twelve month construction period
which commenced in July 2009, with first gold
production scheduled in mid 2010.
Project Location
The Edna May Gold Project mine site is ideally
positioned a few kilometres from the Westonia
town, on the Eastern edge of Western Australia’s
Wheatbelt. Westonia’s mining history dates
back to the early 1900’s, and the town is well-
serviced by established transport and power
infrastructure. The town and mine site are within
three hours drive from the major mining service
centres of Perth and Kalgoorlie.
Catalpa is committed to operating in a sustainable
and socially responsible manner. From the
outset, Catalpa has forged close ties with the
communities around the Edna May Gold Project,
and in turn the project benefits from shared
use of the Westonia town’s extensive social
and recreational infrastructure for its employees
and contractors.
09
 EDNA MAY
Gold Project
PROJECT
FINANCE
In March 2009, Catalpa secured a Project
Finance Facility for the Edna May Gold Project
from Macquarie Bank Limited. The facility
comprises a secured loan of up to A$55M, a
standby mezzanine facility of up to A$10M, a
A$3.5M performance bond facility and a gold
hedging facility.
Under the hedging facility, Catalpa has sold
forward 352,317 ounces of gold at an achieved
fixed flat forward price of A$1,557.50 per ounce
for delivery from commencement of operations
until the facility concludes in the 2015 financial
year. This hedged component of 352,317 ounces
of gold represents 23% of the Project’s present
Mineral Resource.
The hedging facility considerably boosts the
already robust project economics from the
planned average annual cash operating margins
(post royalty) as outlined in the 2008 Feasibility
Study of A$54M per annum, to an impressive
A$72M per annum based on an assumed
average weighted hedge book and spot gold price
of A$1,3651 per ounce.
In conjunction with entering into the project
finance commitment, Catalpa 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 of 7.5 cents (a 25% premium to
the price at which Catalpa issues shares under
the equity component of the project funding). Half
of the options were issued within two months of
signing of the Project Finance Facility with the
balance to be issued following first draw down
under the mezzanine facility if required.
Note 1. Average weighted hedge book and spot gold price is
estimated from 352,317 ounces at A$1,557.50 per ounce and
323,684 ounces at A$1,155 per ounce.
CATALPA RESOURCES ANNUAL REPORT 2009
Under the hedging facility, Catalpa has
sold forward 352,317 ounces of gold at
an achieved fixed flat forward price of
A$1,557.50 per ounce
Share Placement
On 31 March 2009, Catalpa successfully
concluded a placement of 524,423,333 shares
at 6 cents per share to raise gross proceeds of
A$31.4M, which, together with the A$67.5M
Project Finance Facility effectively finalized the
financing required to commence development of
the Edna May Gold Project.
Catalpa’s major shareholder, Lion Selection
Limited provided strong support for the issue
subscribing A$15M. The balance of the issue
was well supported by a range of domestic and
offshore investors which resulted in the addition
of a number of new institutional investors to
Catalpa’s share register.
The placement was made to institutional and
sophisticated investors pursuant to Section 708
of the Corporations Act 2001 and was undertaken
in two tranches; Tranche 1 – comprising 74.3M
shares using the Company’s 15% placement
capacity under Listing Rule 7.1, raising
A$4.4M and Tranche 2 – comprising 450.1M
shares placed as approved by Catalpa’s
shareholders at an Extraordinary General Meeting
on 8 May 2009, to raise A$27M.
Share Purchase Plan
In recognition of its supportive shareholder
base, in April 2009 Catalpa undertook a Share
Purchase Plan (SPP). Under the SPP, each
eligible shareholder was entitled to apply for up
to A$5,000 worth of fully paid ordinary Catalpa
shares at 6 cents per share (being the same
price at which shares were offered under the
placement). The SPP was managed by Austock
Corporate Finance and sub-underwritten by Lion
Selection and was strongly supported by Catalpa
shareholders to raise A$7.5M.
In the three month period from 31 March to 30
June 2009, Catalpa raised more than A$106M in
dept and equity to ensure that its flagship Edna
May Gold Project project is fully funded through
to planned production by mid 2010.
PROPOSED
MERGER
WITH LION
SELECTION
On 24 June 2009 Catalpa and its largest
shareholder, Lion Selection Limited (ASX:LST),
signed a Merger Implementation Agreement to
Benefits to Catalpa Shareholder
establish Catalpa as a new Australian mid-tier The proposed merger with Lion Selection will present significant benefits to
gold producer. The proposed merger will bring Catalpa shareholders. Post merger, Catalpa shareholders will hold shares in a
together Catalpa’s 100% owned and operated Company with the following key attributes:
100,000 ounces pa Edna May Gold Project • A mid-tier Australian gold producer with diversified operations and
and Lion Selection’s 30% stake in the Newcrest immediate production profile
managed, 100,000 ounces pa Cracow Gold Gold
Project in Queensland, under Catalpa’s brand and • Significant cashflow to fund further growth
experienced management team.
• Continued focus on advancing the Edna May Gold Project to production
As part of the merger, Catalpa will also acquire by mid 2010
a pre-emptive right over Newcrest’s 70% stake
• Fully funded
in Cracow. The Cracow Gold Gold Project is
well managed and will continue to be operated • Experienced Board and management team
by Newcrest Mining Limited (70%), the merger
will not detract Catalpa’s management from its • Significant increase in size and scale of operations
focus on advancing the Edna May Gold Project to • Mineral Resources increased from 1.5M ounces to 1.7M
production; on time and within budget. ounces gold
The Cracow Gold Gold Project has a history of • Ore Reserves increased from 817,000 ounces to 887,000
steady gold production of over 100,000 ounces ounces gold
pa for the past four years and, like the Edna May
Gold Project, is considered to have considerable • Combined production of 130,000 ounces gold pa (once Edna
exploration upside. May is at full production)

Following implementation of the merger, expected • Two significant assets:

in the December quarter of 2009, Catalpa will be
• The Edna May Gold Project in Western Australia which, when
a cashflow positive gold producer from its 30%
commissioned in mid 2010, is planned to produce
stake in Cracow and, together with production
at a rate in excess of 100,000 ounces pa with an estimated
from Edna May Gold Project commencing mid
life of mine cash operating cost of A$636 per ounce (pre-royalty), a
2010, annual production will be increased to
current mine life of 8 years and 352,317 ounces sold forward at a
130,000 ounces pa.
fixed flat price of A$1,557.50 per ounce; and
The merger will secure Catalpa’s position as one
• 30% joint venture interest in Cracow Gold Project in
of Australia’s significant gold producers, and
Queensland with a share of current production of around 30,000
create an attractive new mid-tier gold investment
ounces pa at a cash cost of <A$600 per ounce
option for investors seeking to capitalise on the
buoyant outlook for gold. Following the merger, • Significant potential from both operations to add additional Resources
with the removal of Lion’s existing controlling and Reserves through near mine exploration success; and
shareholding, Catalpa expects to have greater
share liquidity and a greater ability to attract new • Pre-emptive right over Newcrest’s 70% interest in the Cracow
investors. Gold Project.

The merger is unanimously recommended

by both the Boards of Lion and Catalpa and
each Director intends to vote their respective
shareholdings in favour of the merger, in the
absence of a competing proposal.

11
Capital Structure
Post Merger

EDNA MAY • 100k ounces production EDNA MAY •100k ounces production CRACOW • 31k ounces production
• Reserves 817k ounces • Reserves 817k ounces • Reserves 70k ounces
• Resources 1.5m ounces • Resources 1.5m ounces • Resources 211k ounces
• 1st gold pour mid 2010 • 1st gold pour mid 2010 • Operating

Following the proposed merger Catalpa will have

a capital structure more attractive to institutional
investors with:
• A clean and open share register
• Removal of ≈130M options
(pre consolidation)
• Removal of a large single shareholder (Lion
Selection 46.9%)
• 145M shares and ≈15.8M options
• No single shareholder with more than
9.0% shareholding
Merger Terms and
Conditions Merger Timing
The merger will be implemented via a Scheme The merger is planned to be implemented in the last quarter of 2009:
of Arrangement of Lion shareholders, pursuant
• Transaction announced 24 June 2009
to which Catalpa will acquire all of the shares in
Lion. Under the Scheme, Lion shareholders will • Scheme booklet dispatched 12 October 2009
receive one Catalpa share for each Lion share
they hold (post Catalpa undertaking a 1 for 11 • Catalpa shareholder meeting 17 November 2009
share consolidation). In conjunction with the • Lion shareholder meeting 17 November 2009
Scheme, Lion will first undertake a demerger of
its investment assets and undertake a 10 cents • Expected merger completion December 2009
per share cash distribution to its shareholders.

CATALPA RESOURCES ANNUAL REPORT 2009

 Project Status
On 25 May 2009 Catalpa received official
notification that Environmental Mining
Approval had been recommended for its Edna
May Gold Project, subject to the lodgement of
bonds. The Department of Environment and
Conservation Works Approval to commence
construction at Edna May Gold Project, was
received on 6 July 2009.

Appointment of Contractors
In March 2009 Catalpa had provisionally
appointed Perth-based, GR Engineering Services
(GRES) as its major site construction service
provider, and was therefore able to immediately
formalise the appointment and commence site
works at Edna May Gold Project, on receipt of

EDNA MAY the Department of Environment and Conservation

Works Approval on 6 July 2009.

Gold PROJECT GRES is responsible for the single largest capital

PROGRESS
Updated Financial Model
Two important developments have occurred since
the updated Feasibility Study was published in
January 2009. The favourable forward sold gold
price of A$1,557.50 for 352,317 ounces of gold,
and the addition of 79,000 ounces of gold to the
project Ore Reserve from the adjacent Greenfinch
deposit, have both contributed significantly to the
already robust project economics:
component of the Edna May Gold Project, budget;
namely the refurbishment and recommissioning
of the 2.8 – 3.2Mtpa Edna May Gold Project, gold
processing plant. Their appointment is in keeping
with Catalpa’s commitment to using local services
and labour, in support of the local economy where
appropriate to do so.
The Edna May Gold Project, 88-person
accommodation village has been constructed
and is occupied at near-full capacity by contractors
engaged in early earthworks and processing plant
refurbishment activities.
Catalpa’s Edna May GOLD PROJECT village is
The scoping, tendering and awarding of project situated in a picturesque setting on the edge
related contracts are progressing according of the Westonia town site. Above: The village
to plan. dining room.

Gold Price per Ounce A$1,365

Operating Cost A$430M
Cash Operating Margin (post Royalty) 2
A$457M
Average Cash Annual Operating Margin 3
A$73M
Average Cash Cost per Ounce (pre royalty) A$636

Note 2 Cash Operating Margin (post Royalty) is determined by the gold price per ounce (A$1,365)
minus the Average Cash Cost per ounce (A$636) minus the royalty of 4.5% times the assumed
spot gold price of A$1,155 per ounce (A$52 per ounce) times the FS Ore Reserve (676,000)
Note 3 Average Cash Annual Operating Margin is determined by the Cash operating Margin (post
Royalty) divided by the FS processing life (6.3 years).

Project 2009 2010 2010

Timeframe Q3 Q4 Q3 Q4 Q3 Q4
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Construction
Commissioning
First Gold
Pre - Strip
Production Ramp Up
Full Production
Merger Finalised
Cracow Cashflow

13
 EDNA MAY PROCESSING PLANT under CONSTRUCTION

Site Works Underway

GRES has constructed offices, communications
and other infrastructure on site and work is well
advanced on the preliminary plant earthworks
and refurbishment of the 2.8 – 3.2Mtpa Edna
May Gold Project, processing plant stored on-site.
Subsequent to the close of the financial period,
process plant site earthworks are almost
complete and the process plant structural and
concrete civil works are also well advanced, with
the rafts for both the SAG and ball mills both
under construction.
Community Benefits
The development of Catalpa’s Edna May Gold Project, will have significant flow-on social benefits
for the community including:
• greatly increased income to local government from royalties, letting of village-land and offices,
and annual social investment - providing the opportunity to expand services and improve
community infrastructure
• population growth and increased diversity in the local population
• growth for existing local business and new business opportunities
• job opportunities during construction

The refurbishment of mechanical plant components • ~130 direct full-time jobs for the current life-of-mine of eight years
remains on schedule and within budget. • indirect jobs from the increased economic activity
Key Personnel
The appointment of key personnel to the Edna
May Gold Project, is progressing on schedule
and within budget, with a number of middle
management appointments finalised.
Community Engagement
Catalpa is a responsible corporate citizen and is
committed to operating in a sustainable manner
in the interest of all its stakeholders including
the local communities within which it operates.
Catalpa is committed to utilizing local labour and
services wherever possible, and to this end, has
hosted a series of meetings in the communities
surrounding the Edna May Gold Project, project
location to consult with potential employees,
service providers and other interested and
affected parties.

wolfram street, westonia

CATALPA RESOURCES ANNUAL REPORT 2009

 MINERAL
RESOURCE
AND ORE
RESERVES
The Edna May and Greenfinch Mineral Resource
was estimated using Hellman & Schofield MIK
block modelling techniques within geologically and drill core from edna may
grade defined mineralisation envelopes and is reported
based on a 0.5g/t Au cut-off grade in accordance with
the Australasian JORC Code in the following table:

Mineral Resource Edna May Gold Project Mineral Resources Statement Reported to 0.5g/t Au cut-off
Measured Indicated Total Measured & Inferred Total Measured,
Indicated Indicated & inferred
Million Gold 000 Million Gold 000 Million Gold 000 Million Gold 000 Million Gold 000
Tonnes g/t Ounces Tonnes g/t Ounces Tonnes g/t Ounces Tonnes g/t Ounces Tonnes g/t Ounces

Greenfinch 0.70 1.26 30 2.00 1.15 70 2.70 1.18 100 0.50 1.2 20 3.20 1.19 120

Edna May 16.60 1.15 620 13.30 1.13 480 29.90 1.14 1100 8.40 1.0 270 38.30 1.11 1370

Total 17.30 1.17 650 15.30 1.11 550 32.60 1.14 1,200 8.90 1.0 290 41.50 1.11 1,490

Effective Holdings
• Catalpa Resources Ltd owns 100% of Edna May Operations Pty Ltd which in turn owns 100% of the Edna May Gold Project.
Mineral Resource footnotes:
• The Mineral Resource has been stated at a 0.5g/t Au cut-off grade.
• The Mineral Resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction and assuming a
smallest mining unit for ore selection.
• Measured and Indicated Resources lie in areas where drilling is available at a maximum of 25 x 25 metre spacing, Inferred Resources exist in areas of
broader spaced drilling, generally peripheral to the Measured and Indicated panels.
• All Mineral Resource figures are stated at the 30 June 2009 on a 100% basis, with depletion by production where relevant.
• There are no known environmental, permitting, legal, taxation, political or other relevant issues that would materially affect the estimates of
the Mineral Resources.
• Mineral Resources are inclusive of Ore Reserves. The stated contained mineral resource metal ounces are considered insitu; beneficiation recovery
factors have not been applied.
• Due to rounding of figures small discrepancies may exist.

15
 Statement of Edna May Ore Reserves
– 30 June 2009
Coffey Mining Pty Ltd played a key role in providing technical and study
management skills in the 2008 FS which enabled an upgrade of Edna May
Gold Project Ore Reserve to 817,000 contained ounces of gold. Extensions
to project life and improvements to the already robust economics were
achieved during the course of the financial year following the release in
April 2009 of the maiden Greenfinch deposit Ore Reserve. The Greenfinch
deposit, along strike from the Edna May open pit has 79,000 contained
ounce of gold. This increase to the project Ore Reserve extends the mine
life to eight years and at current gold prices presents a significant boost to
the project revenue.

The Edna May & Greenfinch Ore Reserve, which was estimated by Coffey
Mining Pty Ltd using Whittle Software based on relevant mining Au cut-off
grades in accordance with the Australian JORC Code, is summarised in the
following table:

ORE RESERVE Edna May Gold Project Ore Reserve Statement Reported to 0.5g/t Au cut-off
Proved Probable Total Proved and
Probable
Million Gold 000 Million Gold 000 Million Gold 000
Tonnes g/t Ounces Tonnes g/t Ounces Tonnes g/t Ounces

Greenfinch 0.60 1.29 30 1.40 1.18 56 2.00 1.22 80

Edna May 12.30 1.19 470 6.80 1.23 270 19.10 1.20 740

Total 12.90 1.19 500 8.20 1.21 320 21.10 1.20 820

Effective Holdings
• Catalpa Resources Ltd owns 100% of Edna May Operations Pty Ltd which in turn owns 100% of the Edna May Gold Project.
ORE RESERVE footnotes
• A gold price of A$1,250 per ounce has been assumed in estimating the Greenfinch Ore Reserve.
• A gold price of A$1,025 per ounce has been assumed in estimating the Edna May Ore Reserve.
• The economic cut-off grade applied to the Ore Reserve was 0.5g/t Au.
• All Ore Reserve figures are stated at the 30 June, 2009, with depletion by production where relevant.
• The Ore Reserve figures are shown on a 100% basis.
• There are no known environmental, permitting, legal, taxation, political or other relevant issues that would materially affect the estimates
of the Ore Reserves.
• Due to rounding of figures small discrepancies may exist.

Additionally, project economics will be further improved from Catalpa’s ongoing exploration activities, with targeted
Reserve growth to more than a million ounces beyond 2010.

Competent Person’s
Statement
Catalpa’s reported Mineral Resource and Ore
Reserve has been compiled by Mr Adrian
Pelliccia. Mr Pelliccia is a Member of the
Australian Institute of Mining and Metallurgy
and a full time employee of Catalpa. 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 2004 Edition of the
JORC ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and
Ore Reserves.’ Mr Pelliccia consents to the
inclusion in the report of the matters based
on their information in the form and context in
which it appears.

CATALPA RESOURCES ANNUAL REPORT 2009


WESTONIA GREENSTONE BELT
Edna May SITE
WESTONIA TOWN SITE
Project location
REGIONAL
GEOLOGICAL
SETTING
The Edna May Gold Project is surrounded
by exploration tenure held 100% by Catalpa.
Catalpa controls most of the under-explored
Westonia Greenstone Belt that displays many
geological similarities with the adjacent Southern
Cross Greenstone Belt, which is host to several
operating and historic gold mines that have
produced in excess of 10M ounces of gold.
The gold mineralisation is hosted in three en
echelon tonalitic gneiss intrusions namely
Edna May, Greenfinch and Golden Point. The
intrusions are bound to the north by an ultramafic
amphibolite and a mafic amphibolite to the south.
The central Edna May gneiss forms a continuous
but irregular body over a 1 kilometre strike with an
average thickness of approximately 100 metres.
The body of gneiss strikes to the WNW and dips
at -70 degrees NNE.
Larger tonnage and lower grade mineralisation
comprises swarms of thin sheeted quartz veins
SOUTHERN CROSS
throughout the gneiss that generally follow the
gneissic foliation but can cross cut to form
stockworks and arcuate reefs. Gold is also
associated with alteration selvedges consisting of
diopside, amphibole, biotite and silica with minor
associated sulphide minerals. Individual veins are
generally less than 5cm thick but locally can be up
to several metres wide. Veining tends to be better
developed in the footwall of the Edna May Gneiss
and are generally sulphidic with the dominant
sulphide being pyrrohtite and lesser amount of
galena, pyrite, chalcopyrite, molybdenite and
sphalerite. Scheelite and wolframite also occur.
Post-mineralised leucogranite and pegmatite
dykes intrude the gneiss and in places stope out
parts of the gold mineralisation.
Total oxidation occurs to about 30 metres depth
on the western edge of the deposit increasing to
60 metres on the eastern flank.
17
 SURFACE projection of
UNDERGROUND TARGETS

OBLIQUE CROSS SECTION

LOOKING EAST

CATALPA RESOURCES ANNUAL REPORT 2009

 E W

EXPLORATION
AND RESOURCE
DEVELOPMENT
Catalpa’s 2009 exploration program focused on
extending near mine ‘brownfields’ opportunities
and testing regional ‘greenfields’ targets within
Catalpa’s extensive 840km2 tenement package
along strike from the Edna May Gold Project.

During late 2008 Catalpa reported the results of

drilling to test underground targets at the Edna
May Gold Project. The program was designed
to further test historical underground drilling
intercepts interpreted to be potential extensions LONG SECTION OF EDNA MAY
of the Edna May Reef at depth below the existing LOOKING SOUTH
Mineral Resource. Previous intercepts at depth
are tabled below.

Historical Drill Holes Interpreted to Intersect the Edna May Reef

Hole ID Local Grid Rl Dip Azi Depth Depth Downhole Grade
North East From To Interval (m) (g/t Au)
WDD041 9650 11650 1339 -90 0 284.0 287.0 3.0 15.0
WDD043 9656 11596 1339 -90 0 393.0 402.0 9.0 12.8
WDD043A 9656 11596 1339 -90 0 364.9 368.0 3.1 8.03
WDD050 9650 11700 1339 -90 0 339.0 344.0 5.0 11.7
WDD052 9664 11627 1339 -90 0 324.0 327.0 3.0 15.0
WDD052A 9664 11627 1339 -90 0 311.0 314.0 3.0 4.6
WDD054 9694 11576 1338 -90 0 400.0 415.0 15.0 6.1
WDD054A 9694 11576 1338 -90 0 407.0 413.0 6.0 11.8
WDD055 9739 11553 1338 -90 0 450.0 482.0 32.0 6.8
WDD055A 9739 11553 1338 -90 0 445.0 477.0 32.0 7.8
WDD079 9641 11589 1340 -83 122 347.4 349.8 2.4 6.0
WDD079B 9641 11589 1340 -83 122 330.8 334.0 3.2 4.4
WDD083 9802 11511 1339 -87 147 498.4 511.0 12.6 7.3

Edna MAY
EDNA May UNDERGROUND
Underground
The 2008 drill program encountered visible
gold in all holes drilled as well as numerous
significant ore grade intercepts. The drilling to
date is not sufficiently closely spaced to provide
adequate confidence of the continuity of the
reefs intersected in the deep drilling campaign,
however, the Board of Catalpa is optimistic that
future investigations could yield a coherent body
of economic mineralisation. A decline was mined
by Australian Consolidated Mines Ltd during the
last phase of mining to a depth of approximately
260 metres below surface. This infrastructure is
currently inaccessible, but may in future provide
underground access from which to further
investigate potential high grade underground
mining targets.

19
 A total of six diamond holes for 3,527 metres were drilled in 2008 to test the
Edna May Reef to 600 metres depth:

High grade intercepts from 2008 surface drilling

Hole ID Rl Dip Azi Depth Depth Downhole Grade Comments
North East From To Interval (m) Grade (g/t Au)
WDD144A 9851 11355 1340 -66.0 099 513.00 513.27 0.27 129.0 Narrow quartz vein
and 536.88 538.44 1.56 49.4 Significant High grade reef and
minor associated veins.
Probable Edna May Reef Intersection
and 542.38 543.00 0.62 99.1 Narrow quartz vein in interval
and 547.85 548.20 0.35 85.7 Quartz rich zone. No coherent vein margin
and 568.30 571.59 3.29 39.1 Quartz rich zone within pegmatite
Including 568.29 569.16 0.87 140.0 Quartz rich zone within pegmatite
WDD145 9855 11354 1340 -61.6 112 458.86 459.89 1.03 15.0 Small 10cm vein in interval
and 549.15 549.89 0.74 13.6 Veined and sulphide rich EMG –
small 10cm vein
and 506.64 523.1 16.45 5.5 Complete Edna May Reef intercept including
5.03m zone of veined EMG.
Hangingwall reef section + veined
EMG 6.82m @ 10.81g/t
WDD146 9799 11358 1339 -61.6 112 412.07 412.45 0.38 70.1 Silicified quartz rich zone with sulphides
and visible gold
and 495.79 496.6 0.81 9.4 Interval contains 10cm quartz vein
and 539.20 540.29 1.09 10.2 0.75m vein within the interval
WDD147 9785 11453 1348 -64.311 119 446.7 447.6 0.9 5.93 Edna May Reef – same style of Quartz lode
cut by pegmatite intrusive therefore
not complete intercept
and 464.29 464.79 0.50 49.5 40cm quartz vein with visible gold –
flatter dipping vein set -
35 degrees to 030
and 475.14 476.33 1.19 24.4 Irregular veining on the margin of
a pegmatite intrusive
WDD148 9798 11361 1340 -58.6 103 401.60 403.20 1.60 48.4 0.87m quartz vein plus additional
peripheral veining
and 489.35 489.86 0.51 12.1 0.34m quartz vein in interval
WDD149 9801 11359 1340 -56.2 113 479.95 481.20 1.25 31.3 Significant High grade reef and minor
associated veins. Possible Edna May
Reef or associated Intersection

Edna May Underground

Visible gold was observed in all the holes not only
in Edna May Reef positions but elsewhere in the
host rock Edna May Gneiss. Gold mineralisation
is associated with ‘stockworks’ of quartz-pyrrhitite-
pyrite between the historically mined high grade
quartz-gold sulphide reefs.
The results provide geological evidence
supporting the interpretation of the continuation
of the Edna May reef at depth; and the belief
that Edna May Gold Project is prospective for
underground mining at an appropriate point of
time in the life of mine.

CATALPA RESOURCES ANNUAL REPORT 2009

Greenfinch Deposit
Gold mineralisation at Greenfinch is contained
within the western continuation of the Edna May
Gneiss, subtly offset by a series of NNW trending
faults. The gneiss is 80 metres thick and is locally
cut by a series of flat to moderately dipping
leucogranite sills that are barren of gold and
generally less than 10 metres thick.
An RC program of 49 holes for 4,295 metres
defined the Greenfinch Mineral Resource of
3.19Mt @1.18g/t Au for 121,000 ounces which
resulted in a maiden Ore Reserve of 2.0Mt @ 1.22
g/t Au for 79,000 ounces.
A follow up program of 14 RAB holes for 570
metres was drilled to determine the extent of the
host gneiss lithology west along strike. The program
defined an additional potentially mineralized
zone of gneiss over a 400 metres strike length,
containing shallow historical gold workings.
Further RC drilling is planned to test both the
downdip extensions to the resource which remains
open at depth, and the extent of the host lithology
along strike.
Regional PLAN REVIEW OF GREENFINCH
MINERALISATION AND SIGNIFICANT
Auger GOLD INTERCEPTS
This year’s auger drilling program has virtually
completed the wide spaced, first pass geochemical
sampling of the company’s tenement block. The
auger drilling campaign comprised 452 holes of
largely ‘infill’ sampling as follow up to anomalies
produced last year. The auger drilling was planned
to provide more geochemical detail to last year’s
anomalies’ data.
Some of these anomalies are new gold-in-
calcrete occurrences defined in ‘greenfields’
areas previously untested by RAB or RC drilling.
The anomalies are widespread, robust and
cohesive gold-in-calcrete/soil anomalies. Several
anomalies are of large aerial extent covering up to
2.5 kilomtres by 2 kilomtres.
This year’s drilling confirmed and enhanced
the previously defined anomalies and produced
several ‘new highs’ for testing. The western line
of anomalies produced a new high of 26.4 ppb
gold. The central anomaly comprises a maximum
value of 92.5 ppb gold. To the east auger drilling
produced a value of 258 ppb gold located
north and along strike of the untested historical
workings of Colossus.
Auger data from earlier campaigns is combined
to produce geochemical contours in the entire
tenement holdings. The distribution of auger
anomalies often shows an alignment trending
NNW parallel to the direction of the faults
adjacent to the Edna May deposit, and probably
closely related to its formation.
The shapes of the contours of the three
large gold-in-calcrete anomalies in the west
crudely resemble bedrock structures displayed
in ultradetail aeromagnetics suggesting that
the source of the anomalies is substantially
bedrock related.
21
 REGIONAL RAB TARGETS FROM
GEOCHEMICAL TEST WORK

Exploration and Edna May upgrade Magnetic Low Targets

Resource Development Over 4,000 metres of RC and diamond drilling
Planning commenced in July 2009 to upgrade the Inferred
Resource below the final pit design with a view to
expanding the existing Ore Reserve. The current
Mineral Resource has only been estimated to 300
metres below surface and gold mineralisation
remains open at depth.
Golden Point
The Golden Point Gneiss is situated in the footwall
amphibolite approximately 30 metres below the
Edna May Gneiss on the south side of the pit. Its
relationship to the Edna May Gneiss (EMG) is not
fully understood however it remains a prospective
host lithology and previous RC drilling delineated
several narrow, high-grade intercepts including
3m @ 19.1 g/t Au from 69 metres in GPRC002.
Further RC and diamond drilling is planned to
scope the extent of the gneissic unit and test for
continuity of mineralization.
Regional
Planning was undertaken in preparation for the
following exploration activities scheduled to be
undertaken in 2009/2010. The planning involved
RAB testing. Follow up RAB and or RC drilling will
be results driven.
A total of 600 RAB holes for approximately 11,000
metres is planned to test numerous targets.
Several ‘magnetic low’ targets are defined at
geologically similar positions to the stratigraphic
and structural position of the Edna May gold
deposit. Most targets are situated within 4
kilometres of the known gold mineralisation at
Edna May and Rutherfords Reward.
Historical Workings
RAB testing will be carried out on the western
extensions of the Colossus historical workings.
These workings remained untested until the
company’s RAB drilling there last year. RAB
drilling produced values up to 3m @ 0.59 g/t gold.
Jilbadji
During the year Catalpa earned a 65% interest
in the Jilbadji gold prospect in a joint venture
with Image Resources. The Jilbadji prospect
is located in E77/1132, 35 kilometres south of
Southern Cross and four kilometres NNW of the
Edwards Find gold deposit. It contains a series of
soil values up to 47 ppb gold which straddle a
magnetic lineament that extends NNW from the
recent underground gold mining operations at
Edwards Find.

Auger Anomalies Targets

Shallow RAB drilling to test the weathered
saprolite bedrock is planned as the first pass
drilling test of the auger anomalies. In the four
large, aerially extensive anomalies drilling is
planned on 80 metres centres. Elsewhere RAB
traverse are planned across the geochemical
‘peaks’ of the anomalies. This drilling will assist in
defining zones for more detailed and deeper RAB
or RC drilling.

CATALPA RESOURCES ANNUAL REPORT 2009

PROPOSED PROJECT AND
INFRASTRUCTURE LAYOUT TENEMENT HOLDINGS
Location Tenement Status Percentage

Bodallin
Bodallin SW E 77/1165 Granted 100

Bodallin South
Kent Road E 77/1452 Granted 100

Jilbadgie
Jilbadgie East E 77/1132 Granted 65

Mine
Paddock M 77/110 Granted 100
Golden Point East M 77/124 Granted 100
Mine M 77/88 Granted 100

Sandford Rocks
Sandford Rocks E 77/1494 Granted 100

Westonia
Begley E 77/1069 Granted 100
Westonia NE E 77/1324 Granted 100
Westonia Belt E 77/516 Granted 100
Westonia West E 77/990 Granted 100
Westonia L 77/18 Granted 100
Westonia NW P 77/3712 Granted 100
West Westonia P 77/3713 Granted 100
Westonia NE P 77/3714 Granted 100
Bodallin P 77/3875 Granted 100
Corsini Road P 77/3876 Granted 100
Hitching Road P 77/3877 Granted 100
Stoneman Road P 77/3878 Granted 100
Kaolin Street P 77/3879 Granted 100

23
 DIRECTOR’S
REPORT

The Directors of Catalpa Resources Limited submit herewith the annual report of the Company for the financial year ended 30 June 2009. In order to comply
with the provisions of the Corporations Act 2001, the Directors Report as follows:
INFORMATION ABOUT THE DIRECTORS AND SENIOR MANAGEMENT
The names and particulars of the Directors of the Company during or since the end of the financial year are:

Name Particulars
John Rowe John Rowe brings a wealth of geological and business development skills to the Company. Mr Rowe has 39 years
BSc (Hons) ARSM, MAusIMM experience within the Nickel and Gold industry of Western Australia. He has held a variety of positions in mine
management, exploration and business development and was previously employed as an Executive of Lion Ore
(Non Executive Chairman)
in Australia.
Mr Rowe is also a Director of Panoramic Resources Limited (since 2006) and was a Non Executive Director of
Perseverance Corporation Limited from 19 September 2007 to 18 February 2008. Mr Rowe has not held any
other listed company directorships within the last 3 years.

Bruce McFadzean Mr McFadzean, a mining engineer, brings over 30 years of management, mining, processing and project “start
Dip Mining up” experience to the organisation, half of which was gained in the employ of global resources brands, Rio Tinto
and BHP Billiton. Mr McFadzean has broad commodity experience in gold, iron ore, diamonds and nickel/cobalt
(Managing Director)
and in a wide range of roles including corporate, managerial, technical and operational.
Mr McFadzean is a Non Executive Director of Venture Minerals Limited. Mr McFadzean was Executive Director
of Territory Resources Limited from March 2007 to 17 April 2008. Mr McFadzean has not held any other listed
company directorships within the last 3 years.

Murray Pollock Mr Pollock is a businessman with over 40 years experience in the mineral services industry, principally in drilling.
MAICD He is a consultant to several companies on drilling and mine management services.
(Non Executive Director) Mr Pollock has not held any other listed company directorships within the last 3 years.

Barry Sullivan Mr Sullivan is an experienced and successful mining engineer with a career spanning 40 years in the mining
BSc(Min), ARSM, F AusIMM, industry. His initial mining experience was gained in the South African gold mining industry, followed by more
than 20 years with Mount Isa Mines. In the final 5 years of his tenure with MIM, Mr Sullivan was Executive
MAICD General Manager responsible for the extensive Mount Isa and Hilton operations. More recently, Mr Sullivan has
(Non Executive Director) been working with a number of smaller exploration and mining companies.
Presently Mr Sullivan is a Non Executive Director and Chairman of Exco Resources Ltd, and a Non Executive
Director of Lion Mining Ltd and Lion Selection Ltd (appointed 7 November 2008). Mr Sullivan was previously a
Non Executive Director of Allegiance Mining Ltd. Mr Sullivan has not held any other listed company directorships
within the last 3 years.

Nigel Johnson Appointed 20 August 2008

CA, CFTP (Snr), MAICD
(Non Executive Director)
Mr Johnson is a Chartered Accountant with strong finance and management experience attained over a period of
36 years. This experience was gained from working in a number of countries for both publicly listed and private
companies within a number of industries.
Mr Johnson has significant expertise in financial management, equity and debt raisings, treasury and financial
risk management and strategic and business planning. Most recently Mr Johnson was Chief Financial Officer for
Straits Resources Limited, responsible for the financial, commercial and treasury activities of the Straits Group.
Mr Johnson was a Non Executive Director of Tritton Resources Limited. Mr Johnson is also a Non Executive
Director of Matrix Composites and Engineering Limited. Mr Johnson has not held any other listed company
directorships within the last 3 years.

Chris Melloy
(BE (Hons), MEngSc, GDipAp-
pFin (Sec Inst), MAusIMM,
ASIA
(Non Executive Director)
Resigned 12 December 2008 Mr Melloy has 30 years experience in the mining industry in both operations and
finance, including mine planning, operating and senior mine management roles, as well as mining analysis and
research in the stock broking industry.
He is an Executive Director of Lion Manager, the management company responsible for the operation of Lion
Selection Group, as well as a non Executive Director of Austindo Resources Corporation NL (since 2001). Within
the last 3 years Mr Melloy has been a former Director of Exco Resources Limited. Mr Melloy has not held other
listed company directorships within the last 3 years.

CATALPA RESOURCES ANNUAL REPORT 2009

DIRECTOR’S
REPORT
CONTINUED

Directors’ shareholdings
The following table sets out each Director’s relevant interest in shares or options in shares of the Company as at the date of this report.

Fully Paid Ordinary Share

Shares Options
John Rowe 1,000,000 2,000,000
Bruce McFadzean 1,017,500 10,172,500
Murray Pollock 18,271,162 4,252,802
Barry Sullivan - 1,000,000
Nigel Johnson 1,500,000 1,000,000

Remuneration of directors and senior management

Information about remuneration of the Directors and senior management is set out in the remuneration report of this Directors’ report, on pages 28 to 35.

Share options granted to directors and senior management

Information about share options granted to Directors and senior management during or since the end of the financial year is set out in the remuneration
report of this Operationsirectors’ report, on pages 28 to 34.

Company secretaries

Name Particulars
Graham Anderson Graham Anderson has a Bachelor of Business Degree and is a member of the Institute of Chartered Accountants.
BBus, CA Graham commenced his career in 1983 with Ernst & Young before later moving to the national chartered
accounting firms of Duesburys and Horwath as a Partner with particular responsibilities for providing a range of
audit and related corporate services.
Graham has extensive experience and knowledge of the ASX Listing Rules and Corporations Act and has acted
as Director and Company Secretary to a number of ASX listed entities. He has also been significantly involved in
the IPO stage including due diligence process for Australis Aquaculture Ltd, Dynasty Metals Australia Ltd, Echo
Resources Ltd, Pegasus Metals Ltd, Mamba Minerals Ltd and Iron Road Ltd in the past 3 years.
He is currently the Chairman and Company Secretary of APA Financial Services Ltd, Director and Company
Secretary of Dynasty Metals Australia Ltd, Echo Resources Ltd, Pegasus Metals Ltd and Company Secretary of
Apex Minerals NL, Mamba Minerals Ltd, Tectonic Resources NL and Iron Road Ltd.

Leonard Math Leonard Math graduated from Edith Cowan University, majoring in Accounting and Information Systems, in 2003
BBus, CA and is a member of the Institute of Chartered Accountants. In 2005 Leonard worked as an Auditor at Deloitte
before joining GDA Corporate as a Senior Accountant.
His public company responsibilities include corporate compliance roles, including extensive liaison with ASX and
ASIC, control and implementation of corporate governance, completion of annual financial reports and auditor
liaison, and shareholder relations with registry and shareholders both retail and institutional.

25
 DIRECTOR’S
REPORT
CONTINUED

PRINCIPAL ACTIVITIES
The Group’s principal activities during the course of the financial year were the development of the Edna May Gold Project near Westonia in Western Australia
and exploration within the wider Westonia Greenstone Belt.

REVIEW OF OPERATIONS
During the year the Group has raised A$106M in debt and equity to advance its Edna May Gold Project at Westonia in Western Australia, with production
expected to commence by second quarter 2010. As part of the debt funding Catalpa has entered into physical gold delivery contracts for 352,317 ounces
of gold at a price of A$1,557.50 per ounce.
Catalpa announced in June 2009 a proposed merger with Lion Selection to bring together Lion Selection’s 30% interest in the Cracow Gold Gold Project in
Queensland with Catalpa’s existing gold mining operations. This merger is subject to shareholder approval and is not expected to be completed until early
December 2009.
The Group recognised a loss after tax for the year of A$6.814M [2008: A$2.292M].

CHANGES IN THE STATE OF AFFAIRS

The Company’s name was changed from Westonia Mines Limited to Catalpa Resources Limited on 29 August 2008 after shareholders’ approval at a General
Meeting on 27 August 2008.
Apart from the above, or as noted elsewhere in this report, no significant changes in the state of affairs of the Group occurred during the financial year.

SUBSEQUENT EVENTS
No matters or circumstances, besides those disclosed at note 30, have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

FUTURE DEVELOPMENTS
Over the next 12 months the Group will be focused on the development of the Edna May Gold Project with gold production expected to commence mid 2010.
Other likely developments in the operations of the Group and the expected results of those operations in future financial years have not been included in this
report as the inclusion of such information is likely to result in unreasonable prejudice to the Group. Accordingly this information has not been disclosed in
this report.

DIVIDENDS
No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.

ENVIRONMENTAL REGULATIONS
The Group is subject to significant environmental regulation in respect to its exploration activities. The Group aims to ensure the appropriate standard of
environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Group are not
aware of any breach of environmental legislation for the year under review.

CATALPA RESOURCES ANNUAL REPORT 2009

DIRECTOR’S
REPORT
CONTINUED

SHARES UNDER OPTION

Details of unissued shares or interests under option as at the date of this report are:

Issuing entity Number of shares Class of shares Exercise price Expiry date
under option of option of options
Catalpa Resources Limited 172,723,065 Ordinary 10 cents 31 Oct 2011
Catalpa Resources Limited 38,302,294 Ordinary 10 cents 30 Jun 2010
Catalpa Resources Limited 200,000 Ordinary 11 cents 22 Nov 2010
Catalpa Resources Limited 100,000 Ordinary 8 cents 29 April 2011
Catalpa Resources Limited 625,000 Ordinary 6 cents 23 Dec 2013
Catalpa Resources Limited 4,375,000 Ordinary 8 cents 23 Dec 2013
Catalpa Resources Limited 4,375,000 Ordinary 10 cents 23 Dec 2013
Catalpa Resources Limited 4,375,000 Ordinary 12 cents 23 Dec 2013
Catalpa Resources Limited 3,750,000 Ordinary 14 cents 23 Dec 2013
Catalpa Resources Limited 1,250,000 Ordinary 6 cents 11 Mar 2014
Catalpa Resources Limited 1,250,000 Ordinary 8 cents 11 Mar 2014
Catalpa Resources Limited 1,250,000 Ordinary 10 cents 11 Mar 2014
Catalpa Resources Limited 1,250,000 Ordinary 12 cents 11 Mar 2014
Catalpa Resources Limited 66,666,666 Ordinary 7.5 cents 25 May 2014

The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of the Company. No options
have been issued subsequent to the year end. No shares have been issued during or since the end of the financial year as a result of exercise of an option.

IMDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company secretaries and all
executive officers of the Company and of any related body corporate against a liability incurred as such a Director, Secretary or Executive Officer to the
extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has entered into a Deed of Indemnity, Insurance and Access with each Director. In summary the Deed provides for:
• Access to corporate records for each Director for a period after ceasing to hold office in the Company,
• The provision of Directors and Officers Liability Insurance, and
• Indemnity for legal costs incurred by Directors in carrying out the business affairs of the Company.
Except for the above the Company has not otherwise, during or since the financial year, except to the amount permitted by law, indemnified or agreed to
indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

DIRECTORS’ MEETINGS
The following table sets out the number of Directors’ meetings and committee meetings held during the financial year and the number of meetings
attended by each Director (while they were a Director or committee member). During the financial period 22 Board meetings and 2 audit committee
meetings were held.

27
 DIRECTOR’S
REPORT
CONTINUED

Board of Directors Audit Committee

Directors Held Attended Held Attended
John Rowe 22 22 2 2
Bruce McFadzean 22 22 - -
Murray Pollock 22 22 2 2
Barry Sullivan 21 18 2 2
Nigel Johnson 21 20 2 2
Chris Melloy 8 6 - -

NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the period by the auditor are outlined in note 28 to the financial
statements.
The Directors are satisfied that the provision of non-audit services during the period by the auditor is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services disclosed in note 28 to the financial statements do not compromise the external auditor’s independence,
based on advice received from the Audit Committee, for the following reasons:
- All non-audit services have been reviewed to ensure they do not impact the integrity and objectivity of the auditor; and
- None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting
in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration is included on page 36 of the financial report.

REMUNERATION REPORT (audited)

This remuneration report, which forms part of the Directors’ Report, sets out information about the remuneration of Catalpa Resources’ Directors and
senior management for the financial year ended 30 June 2009. The prescribed details for each person covered by this report are detailed below under the
following headings:
− Director and senior management details
− remuneration policy
− relationship between the remuneration policy and Company performance
− remuneration of Directors and senior management
− key terms of employment contracts

Director and senior management details

The following persons acted as Directors or senior management during or since the end of the financial year:
John Rowe Non Executive chairman
Bruce McFadzean Managing Director
Murray Pollock Non Executive Director
Barry Sullivan Non Executive Director
Nigel Johnson Non Executive Director (appointed 20 August 2008)
Chris Melloy Non Executive Director (resigned 12 December 2008)

CATALPA RESOURCES ANNUAL REPORT 2009

DIRECTOR’S
REPORT
CONTINUED

The term “senior management” is used in this remuneration report to refer to the following persons. These persons include the five members of senior
management who received the highest remuneration during the year. Except as noted the named persons held their current positions for the whole of the
financial year and since the end of the financial year:
Erik Palmbachs Chief Financial Officer (appointed 20 October 2008)
Stuart Pether General Manager Operations (appointed 12 January 2009)
Graham Anderson Joint Company Secretary

Leonard Math Joint Company Secretary

Remuneration policy
The remuneration policy of Catalpa Resources Limited has been designed to align Director and Executive objectives with shareholder and business objectives
by providing a fixed remuneration component and offering specific long term incentives based on key performance areas affecting the Group’s financial
results. The Board of Catalpa Resources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain high calibre
Executives and Directors to run and manage the Group.
The remuneration policy, setting the terms and conditions for the Executive Directors and other Senior Executives, was developed by the Board. All Executives
receive a base salary (which is based on factors such as length of service and experience) and superannuation. The Board reviews executive packages
annually by reference to the Group’s performance, Executive performance and comparable information from industry sectors and other listed companies in
similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and retain the highest calibre
of Executives and reward them for performance that results in long term growth in shareholder wealth. Executives are also entitled to participate in the
employee share and option arrangements.
Executive Directors and senior management receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not
receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation.
The Board policy is to remunerate Non Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The
Board determines payments to the Non Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non Executive Directors is subject to
approval by shareholders at the Annual General Meeting (currently A$350,000). Fees for Non Executive Directors are not linked to the performance of
the Group. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and are able to
participate in employee option plans.

Relationship between the remuneration policy and company performance

The remuneration policy has been tailored to increase goal congruence between shareholders and Directors and Executives. Currently, this is facilitated
through the issue of options to Directors and employees under the employees and contractors option plan to encourage the alignment of personal and
shareholder interests. Under this plan the options generally vest over a five year period and vesting is subject to persons remaining in employment with the
Group. The Company believes this policy will be effective in increasing shareholder wealth. For details of Directors and senior management interests in
options at year end, refer note 26.
No component of Director or senior management salary is dependent on Company performance. The Group did not have a formal cash incentive or bonus
scheme for the years ending 30 June 2008 or 30 June 2009.

Remuneration of directors and senior management

The Directors and the Company Executives and group Executives received the following amounts as compensation for their services as Directors and
Executives of the Company and/or the Group during the period:

29
 DIRECTOR’S
REPORT
CONTINUED
year ended 30 JUNE 2009
Short-term employee benefits Post- employment
benefits
Name Cash salary Other Non- Super- Equity settled share Total % consisting
and fees services monetary annuation -based payments of options
$ $ $ $ $ $ $
Directors
John Rowe 80,000 30,250 - 7,200 23,228 139,174 16%
Bruce McFadzean 370,000 - 7,346 33,300 116,142 519,266 21%
Murray Pollock 40,000 - - 3,600 11,614 54,462 20%
Barry Sullivan 41,667 - - 3,750 11,614 56,279 19%
Nigel Johnson (i) 34,564 11,375 - 3,111 11,614 59,912 18%
Chris Melloy (ii) (v) 17,934 - - - - 17,934 -

Executives
Erik Palmbachs (iii) 148,077 5,383 13,327 36,586 189,291 12%
Stuart Pether (iv) 123,106 38,077 4,039 11,080 40,425 242,091 27%
Graham Anderson and
Leonard Math (vi) 66,000 - - - - 66,000 -

TOTAL 921,348 79,702 16,768 75,368 251,223 1,344,409

(i) appointed 20 August 2008

(ii) resigned 12 December 2008
(iii) appointed 20 October 2008
(iv) appointed 12 January 2009
(v) These payments were made to Lion Manager, the management Company responsible for the operation of Lion Selection Group, for the services
of Mr Chris Melloy as a Non Executive Director.
(vi) These payments are to GDA Corporate, a Company in which Graham Anderson is a Director and Leonard Math is an employee. The fees include
accounting services provided to Catalpa Resources Limited.

CATALPA RESOURCES ANNUAL REPORT 2009

DIRECTOR’S
REPORT
CONTINUED
year ended 30 JUNE 2008
Short-term employee benefits Post- employment
benefits
Name Cash salary Other Super- Retirement Share-based Total % consisting
and fees services annuation benefits payments options of options
$ $ $ $ $ $ $
Directors
John Rowe 56,666 103,344 5,100 - - 165,110 -
Bruce McFadzean (i) 23,492 - 2,114 - - 25,660 -
Murray Pollock 40,000 - 3,600 - - 43,600 -
Barry Sullivan (ii) 1,667 - 150 - - 1,817 -
Chris Melloy (viii) 40,000 - - - - 40,000 -
Mark Fitzpatrick (iii) 50,000 85,250 4,500 - - 139,750 -
David Hatch (iv) 82,073 - 7,387 110,000 - 199,460 -

Executives
Graham Anderson and
Leonard Math (v) (ix) 56,500 - - - - 56,500 -
John Fitzgerald (vi) 16,000 - 1,440 - - 17,440 -
Rowan Johnston (vii) 57,994 - 5,169 50,000 - 113,163 -

TOTAL 424,392 188,594 29,460 160,000 - 802,446 -

(i) appointed 6 June 2008

(ii) appointed 16 June 2008
(iii) resigned 27 February 2008
(iv) resigned 28 September 2007
(v) appointed 2 August 2007
(vi) resigned 31 July 2007
(vii) resigned 14 September 2007
(viii) These payments were made to Lion Manager, the management company responsible for the operation of Lion Selection Group, for the services
of Mr Chris Melloy as a Non Executive Director.
(ix) These payments are to GDA Corporate, a Company in which Graham Anderson is a Director and Leonard Math is an employee. The fees
include accounting services provided to Catalpa Resources Limited.
No Director or member of senior management appointed during the period received a payment as part of consideration for agreeing to hold the position.

31
 DIRECTOR’S
REPORT
CONTINUED

Share-based payments granted as compensation in the current financial year

Employee share option plan
The Group has an ownership-based compensation scheme for Executives and senior employees of the Group. Each employee share option converts to one
ordinary share of Catalpa Resources Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither
rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry. Refer to “Relationship between the
remuneration policy and Company performance” above for details of the basis for granting options and vesting criteria.
During the financial year the following share-based payment arrangements were in existence:

Option series Grant date Expiry Date Weighted Vesting date

average fair
value at grant
date
$
Nov 05 at 11 cents 22 Nov 2005 22 Nov 2010 0.02 Vested at date of grant
Apr 08 at 8 cents 29 April 2008 29 April 2011 0.02 50% vested at date of grant
50% vest on completion of care and maintenance program

Dec 08 at 6 cents 23 Dec 2008 23 Dec 2013 0.02 Vests at date of grant
Dec 08 at 8 cents 23 Dec 2008 23 Dec 2013 0.02 3.75m vest at date of grant.
0.625m vest on completion of Board endorsed finance and
funding package to commence construction of the Edna
May process plant.

Dec 08 at 10 cents 23 Dec 2008 23 Dec 2013 0.02 3.25m exercisable upon completion of an update of the
feasibility study for the Edna May open pit project.
0.5m exercisable upon achievement of a balanced Board
composition.
0.625m exercisable upon the successful employment of
the finance and accounting team and implementation of
project construction and operating cost managing system.

Dec 08 at 12 cents 23 Dec 2008 23 Dec 2013 0.02 3.75m exercisable upon the completion of financing (both
debt and equity) for the Edna May open project.
0.625m exercisable upon the successful commissioning of
Edna May’s open pit project and the key parameters have
been achieved.

Dec 08 at 14 cents 23 Dec 2008 23 Dec 2013 0.02 Exercisable upon the successful commissioning of Edna
May’s open pit project and the key parameters have been
achieved.
March 09 at 6 cents 11 Mar 2009 11 Mar 2014 0.04 Vests at date of grant
March 09 at 8 cents 11 Mar 2009 11 Mar 2014 0.03 Vest on completion of Board endorsed finance and fund-
ing package to commence construction of the Edna May
process plant.
March 09 at 10 cents 11 Mar 2009 11 Mar 2014 0.03 Exercisable upon the successful employment of the site
operating team and implementation of project construction,
production and cost management system.
March 09 at 12 cents 11 Mar 2009 11 Mar 2014 0.03 Exercisable upon the successful commissioning of Edna
May Gold Project .

Further details of the employee share option plan are contained in note 25 to the financial statements.

CATALPA RESOURCES ANNUAL REPORT 2009

DIRECTOR’S
REPORT
CONTINUED

The following grants of share-based payment compensation to Directors and senior management relate to the current financial year. No options issued during
the year were exercised or lapsed during the period.

Name Option series Number granted Number vested % of grant vested % of grant forfeited
John Rowe
Dec 08 at 8 cents 500,000 500,000 100 -
Dec 08 at 10 cents 500,000 500,000 100 -
Dec 08 at 12 cents 500,000 500,000 100 -
Dec 08 at 14 cents 500,000 - - -
Bruce McFadzean
Dec 08 at 8 cents 2,500,000 2,500,000 100 -
Dec 08 at 10 cents 2,500,000 2,500,000 100 -
Dec 08 at 12 cents 2,500,000 2,500,000 100 -
Dec 08 at 14 cents 2,500,000 - - -
Murray Pollock
Dec 08 at 8 cents 250,000 250,000 100 -
Dec 08 at 10 cents 250,000 250,000 100 -
Dec 08 at 12 cents 250,000 250,000 100 -
Dec 08 at 14 cents 250,000 - - -
Barry Sullivan
Dec 08 at 8 cents 250,000 250,000 100 -
Dec 08 at 10 cents 250,000 250,000 100 -
Dec 08 at 12 cents 250,000 250,000 100 -
Dec 08 at 14 cents 250,000 - - -
Nigel Johnson
Dec 08 at 8 cents 250,000 250,000 100 -
Dec 08 at 10 cents 250,000 250,000 100 -
Dec 08 at 12 cents 250,000 250,000 100 -
Dec 08 at 14 cents 250,000 - - -
Stuart Pether
March 09 at 6 cents 1,250,000 1,250,000 100 -
March 09 at 8 cents 1,250,000 1,250,000 100 -
March 09 at 10 cents 1,250,000 - - -
March 09 at 12 cents 1,250,000 - - -
Erik Palmbachs
Dec 08 at 6 cents 625,000 625,000 100 -
Dec 08 at 8 cents 625,000 625,000 100 -
Dec 08 at 10 cents 625,000 - - -
Dec 08 at 12 cents 625,000 - - -

33
 DIRECTOR’S
REPORT
CONTINUED

Value of options granted Value of options exercised Value of options lapsed

at the grant date at the exercise date at the date of lapse
$ $ $
John Rowe 21,700 - -
Bruce McFadzean 108,500 - -
Murray Pollock 10,850 - -
Barry Sullivan 10,850 - -
Nigel Johnson 10,850 - -
Erik Palmbachs 47,438 - -
Stuart Pether 60,250 - -

The value of options granted during the period is recognised in compensation over the vesting period of the grant, in accordance with Australian
Accounting Standards.

Performance of Catalpa Resources Limited

The table below sets out summary information about the Consolidated Entity’s earnings and movements in shareholder wealth for the last 5 years.

30 June 2009 30 June 2008 30 June 2007 30 June 2006 30 June 2005
$ $ $ $ $
Revenue 364,821 594,905 387,038 427,088 384,031
Net loss before tax (6,981,448) (2,291,738) (9,838,739) (12,622,627) (940,644)
Net loss after tax (6,981,448) (2,291,738) (9,730,197) (12,606,793) (940,644)

30 June 2009 30 June 2008 30 June 2007 30 June 2006 30 June 2005
$ $ $ $ $
Share price at start of year 0.05 0.07 0.19 0.08 0.20
Share price at end of year 0.10 0.05 0.07 0.19 0.08
Dividends - - - - -
Basic and diluted earnings
per share (cents per share) (1.30) (0.67) (3.5) (5.6) (0.9)

CATALPA RESOURCES ANNUAL REPORT 2009

DIRECTOR’S
REPORT
CONTINUED

Key Terms of Employment Contracts

The details of service agreements of the key management personnel of Catalpa Resources Limited and the Group are as follows:

Bruce McFadzean, Managing Director

• Term of agreement – 6 months notice of termination is required
• Base salary, exclusive of statutory superannuation, of $370,000 to be reviewed annually by the Board.
• The Company will fully maintain Mr McFadzean’s motor vehicle. Fringe Benefits Tax associated with this vehicle will be at the
Company’s expense.
• Payment of termination benefit on early termination by the employer, other than for gross misconduct, includes any accrued
long service leave and annual entitlements, superannuation, retiring allowance, superannuation gratuity to the value of which does not
exceed the maximum amount ascertained in accordance with the formula set out in section 200G of the Corporations Act 2001.

Erik Palmbachs, Chief Financial Officer

• Term of agreement – 3 months notice of termination is required
• Base salary, exclusive of statutory superannuation, of $210,000 to be reviewed annually by the Board.
• The Company provides Mr Palmbachs with a motor vehicle. Fringe Benefits Tax associated with this vehicle will be at the
Company’s expense.
• Payment of termination benefit on early termination by the employer, other than for gross misconduct, includes any accrued long
service leave and annual entitlements, superannuation, retiring allowance, superannuation gratuity to the value of which does not
exceed the maximum amount ascertained in accordance with the formula set out in section 200G of the Corporations Act 2001.

Stuart Pether, General Manager - Operations

• Term of agreement – 3 months notice of termination is required
• Base salary, exclusive of statutory superannuation, of $260,000 to be reviewed annually by the Board.
• The Company provides Mr Pether with a motor vehicle. Fringe Benefits Tax associated with this vehicle will be at the
Company’s expense.
• Payment of termination benefit on early termination by the employer, other than for gross misconduct, includes any accrued long
service leave and annual entitlements, superannuation, retiring allowance, superannuation gratuity to the value of which does not
exceed the maximum amount ascertained in accordance with the formula set out in section 200G of the Corporations Act 2001.

Signed in accordance with a resolution of the directors.

Bruce McFadzean
Managing Director
Perth, 23 September 2009

35
 AUDITOR’S
INDEPENDENCE
DECLARATION

CATALPA RESOURCES ANNUAL REPORT 2009

Corporate
Governance
Statement

Catalpa’s Directors are committed to high standards of corporate governance. This statement describes the Company’s corporate governance framework. As
a listed entity, the Company is required to disclose the extent to which it has with the Australian Securities Exchange (“ASX”) Corporate Governance Council
(“CGC”) revised (August 2007) “Principles of Good Corporate Governance and Best Practice Recommendations (2nd Edition)” (the Recommendations),
unless otherwise stated. Details of the Company’s compliance with the Governance Recommendations are set out in the relevant sections of this statement.
The key corporate governance practices of the Company are summarised on Catalpa’s website www.catalparesources.com.au under the ‘Corporate –
Corporate Governance’ tab.

Principle 1: Lay Foundations for Management and Oversight

Primary Role of the Board
The board’s primary role is the protection and enhancement of long term shareholder value.

Board Operation
To ensure the Board is well equipped to discharge its responsibilities, the Board has adopted a Board Charter which details the functions and responsibilities
of the Board and those delegated to management. The Board Charter can be assessed on the Company’s website.
The Board has also established an Audit Committee, Nomination and Remuneration Committee and Risk Management Committee in which the relevant
charters are available on the Company’s website.

Board Processes
The Board is responsible for the overall Corporate Governance of the Company including the strategic direction, establishing goals for executive management
and monitoring the achievement of these goals. The Board has established a framework for the management of the Company and its controlled entities,
a framework which divides the functions of running the Company between the Board, the Managing Director and the Senior Executives. The Board has
put in place a system of internal control, a pro-active business risk management process, and has the task of monitoring financial performance and the
establishment of appropriate ethical standards. The Board packs for the Board meeting are prepared and circulated in advance. Senior Executives are invited
into Board meetings and are regularly involved in Board discussions.

Evaluation of Managing Director and Executive Performance

The Managing Director and the Senior Executives are responsible for the day to day running of the Company. The Board has in place a performance appraisal
and remuneration system for the Managing Director and Senior Executives designed to enhance performance. Management performance is reviewed on an
annual basis. The criterion for the evaluation of the Managing Director and each executive is their performance against key performance indicators.

Principle 2: Structure the Board to Add Value

Board Structure
Details of the Directors in office at the date of this report, including their qualifications and experience are set out in the Directors’ Report. The Board currently
comprises 5 Directors with each Director having their relevant expertise and experience with an emphasis on commercial, exploration, mining and project
development.
Criteria considered when appointing a new Director include:
• quality of the individual;
• background of experience and achievement compatibility with other board members;
• credibility within the company’s scope of activities;
• intellectual ability to contribute; and
• the physical ability to undertake a Director’s duties and responsibilities.
Directors are initially appointed by the full Board subject to election by shareholders at the next general meeting. Under the company’s constitution the tenure
of a Director (other than Managing Director, and only one Managing Director where the position is jointly held) is subject to reappointment by shareholders
not later than the third anniversary following his or her last appointment. There is no maximum age for Directors.
A Managing Director may be appointed for any period and on any terms the Directors think fit and, subject to the terms of any agreement entered into, the
Directors may revoke any appointment.

Director Independence
The Board at least annually, assesses the independence of its Non Executive Directors. This assessment may occur more than once each year if there is a
change in circumstances that may impact upon the independence of a Non Executive Director.
Individual Directors must not participate in assessing their own independence, and must provide to the Board all information relevant to the assessment.
In assessing independence, the Board considers all circumstances relevant to determining whether the Non Executive Director is free from any interest and
any business or other relationship which could, or could reasonably be perceived to materially interfere with that Director’s ability to exercise unfettered and
independent judgment on Company issues.
Directors are required to take into consideration any potential conflicts of interest when accepting appointments to other Boards.

37
 Corporate
Governance
Statement
CONTINUED

As at the date of this report the Board comprised of 5 Directors, 3 of whom are considered to be independent.

Name First Appointed Non-Executive Independent

John Rowe 12 October 2006
(appointed as Non Executive
Chairman 30 January 2008) Yes Yes
Bruce McFadzean 6 June 2008 No No
Murray Pollock 21 October 2000 Yes Yes
Barry Sullivan 16 June 2008 Yes No
Nigel Johnson 20 August 2008 Yes Yes

The Chairman
The Company’s Chairman, Mr John Rowe, is an independent, Non Executive Director. As Chairman, Mr Rowe is responsible for leadership of the Board and
for the efficient organisation, integrity and conduct of the Board.

The Managing Director

The Managing Director is responsible for running the Company on a day to day basis pursuant to authority delegated by the Board and is responsible for the
implementation of Board and corporate policy and planning in accordance with approved programmes and budgets. The Managing Director reports to the
Board regularly and is under an obligation to make sure that all reports which he presents give a true and fair view of the Company’s operational, production
activities, exploration and other activities and its current financial status.
The roles of Chairman and Managing Director are not exercised by the same individual.

Board Committees
The Board has established an Audit Committee comprised of all independent Directors. This committee is designed to consider specific matters and make
recommendations to the Board. The Board considers the materials and the committee recommendations presented to them and make an independent
assessment of the recommendations.
Membership of the audit committee as at the date of this report is set out in the Directors’ Report.
During the reporting period the functions to be performed by a Nomination and Remuneration Committee as suggested by the Governance Recommendations
were performed by the full Board. Having regard to the number of Directors that comprised the Catalpa Board, the Board did not consider it appropriate to
delegate these responsibilities to a committee.
The Board has established a Risk Management Committee comprised of the Managing Director and senior management. This committee is designed to:
• provide a structured risk management framework that will provide senior management and the Board with comfort that the risks
confronting the organisation are identified and managed effectively;
• create an integrated risk management process owned and managed by Company personnel that is both continuous and effective; and
• ensure that the management of risk is integrated into the development of strategic and business plans, and the achievement of the
Company’s vision and values;

Principle 3: Promote Ethical and Responsible Decision Making

Code of Conduct
The Board has adopted a Board Code of Conduct that deals with:
• obligations under legislation;
• personal behaviour;
• conflict of interest;
• remuneration, expenses and other benefits;
• confidentiality, information and records; and
• transactions with Director-related entities.
One of the Board’s key aims is to avoid conflicts of interest (both real and apparent) and to ensure that all Board issues receive proper consideration,

CATALPA RESOURCES ANNUAL REPORT 2009

Corporate
Governance
Statement
CONTINUED

unfettered by outside influences. If a conflict does exist, there are various courses of action available, depending upon the significance of the conflict.
In addition, all employees and contractors of the Company (including Directors) must observe the Company Code of Conduct. These policies provide
guidance as to the standards of behaviour to be observed in pursuing the business objectives of the Company so as to ensure that Catalpa personnel act with
integrity, professionalism and fairness at all times.

Policy on Share Trading

The Company’s policy is that Directors, officers and employees are prohibited from dealing in the Company’s shares when they possess price sensitive
information. The Board is to be notified when trading of shares in the Company by any Director or officer of the Company occurs. The Company Share Trading
Policy can be assessed on the Company’s website.

Principle 4: Safeguard Integrity in Financial Reporting

The Managing Director and Chief Financial Officer have made the following certifications to the Audit Committee and the Board:
• that the Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition
and operational results of the Company and the Group and are in accordance with relevant legislation and accounting standards; and
• that the above statement is founded on a sound system of risk management and internal control and that the system is operating
effectively in all material respects in relation to financial reporting risks.

Audit Committee
Please refer to the Directors’ Report for a list of audit committee members, their qualifications, membership changes and member attendance at the Audit
Committee meetings. The Managing Director, Chief Financial Officer, Company Secretary and external auditors are normally invited to attend each Audit
Committee meeting.
The Audit Committee assists the Board to discharge its responsibilities in the areas of:
• financial reporting;
• external audit;
• internal controls & risks; and
• compliance.
As part of its role in financial reporting, the Audit Committee assesses whether the external reporting is consistent with committee members’ information and
knowledge and is adequate for shareholder needs. Additionally, on an annual basis, the audit committee reviews the performance and independence of the
external auditor.

Principle 5: Make Timely and Balanced Disclosure

Compliance procedures, to ensure timely and balanced disclosure of information in line with ASX Listing Rule disclosure requirements and Continuous
Disclosure Guidelines, have been noted and adopted by the Company to ensure that all necessary steps are taken by the Company to meet its obligations
under the Continuous Disclosure regime.
Directors consider, on an ongoing basis, how management information is presented to them and whether such information is sufficient to enable them to
discharge their duties as Directors of the Company. Such information must be sufficient to enable the directors to determine appropriate operating and
financial strategies from time to time in light of changing circumstances and economic conditions.
The Company’s Continuous Disclosure policy can be assessed on the Company’s website.

Principle 6: Respect the Rights of Shareholders

The Company is committed to complying with the continuous disclosure obligations of the Corporations Act and the ASX Listing Rules.
The Company keeps shareholders and the market regularly informed through the annual, half year and quarterly reports. The releases include production
figures, exploration activity and other required statutory information. The Company discloses material developments to the ASX and the media as required.
From time to time, briefings are arranged to give analysts and others who advise shareholders an understanding of the Company’s activities. In conducting
briefings the Company takes care to ensure that any price sensitive information released is made available to all shareholders (institutional and private) and
the market at the same time. These announcements are lodged with the ASX and then posted on the Company’s website at www.catalparesources.com.au.
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification of the
Company’s strategies and goals. Important issues are presented to shareholders as single resolutions. The Board is responsible to the shareholders and the
shareholders are responsible for voting on the appointment of Directors.
The Company also invites the external auditor to attend its Annual General Meeting and to be available to answer shareholders’ questions about the conduct
of the audit and the preparation and content of the auditor’s report.

39
 Corporate
Governance
Statement
CONTINUED

Principle 7: Internal Control and Risk Management

The Board recognises the importance of managing risk and has established systems and procedures to assess, monitor and manage risk. A copy of the
Company’s Risk Management Policy can be obtained from the Company’s website.
The management has designed a risk management and internal control system that seeks to:
• avoid the likelihood of unacceptable outcomes and costly surprises;
• provide greater openness and transparency in decision making and ongoing management processes;
• provide for a better understanding of issues associated with the Company’s activities;
• comprise an effective reporting framework for meeting corporate governance requirements;
• allow an appropriate assessment of innovative processes to identify risks before they occur and allow informed judgement.
In addition, the Board requires the Managing Director and Cheif Financial Officer to state in writing that:
• the Company’s risk management and internal control system to manage the Company’s material risks are being managed
effectively; and
• the Company’s financial reports are founded on a sound system of risk management and internal control and that system is operating
effectively in all material respects in relation to financial reporting risks.
Whilst high priority is given to the management of risk in the Company, current and potential investors are reminded that they are investors in a Company
engaged in mineral production, exploration and development activities which by their very nature are high risk and where success may give rise to high
rewards.

Principle 8: Remunerate Fairly and Responsibly

The Board is committed to ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to corporate and
individual performance is defined.

Board Remuneration
The total annual remuneration paid to Non Executive Directors may not exceed the limit set by the shareholders at an annual general meeting (currently
$350,000). The remuneration of the Non Executive Directors is fixed rather than variable.

Executive Remuneration
The Nomination and Remuneration Committee provides recommendations and direction for the Company’s remuneration practices. The Committee ensures
that a significant proportion of each executive’s remuneration is linked to his or her performance and the Company’s performance. Reviews on performance
are conducted on an annual basis.
Further details in relation to Director and Executive remuneration are set out in the Remuneration Report in the Director’s Report.

CATALPA RESOURCES ANNUAL REPORT 2009

Income
Statement

YEAR ENDED 30 JUNE 2009 Notes Consolidated Company

2009 2008 2009 2008
$ $ $ $
Revenue 5 263,929 263,321 263,929 263,321
Other income 6 75,287 10,699 75,287 10,699
Depreciation expense (161,982) (142,533) (161,496) (142,533)
Corporate expenses (1,463,455) (439,655) (1,454,437) (439,655)
Occupancy expenses 6 (231,790) (203,183) (231,790) (203,183)
Employee and consultant expenses (1,755,310) (621,649) (1,752,215) (621,649)
Travel and accommodation expenses (139,223) (34,919) (139,223) (34,919)
Exploration, evaluation and development expenditure (3,316,493) (1,360,403) (3,316,364) (1,360,403)
Impairment of non-current assets - (84,301) - (84,301)
Finance costs (110,390) - (110,390) -
LOSS BEFORE TAX (6,839,427) (2,612,623) (6,826,699) (2,612,623)
INCOME TAX BENEFIT 7 25,605 320,885 25,605 320,885
NET LOSS ATTRIBUTABLE TO EQUITY
HOLDERS OF CATALPA RESOURCES LIMITED (6,813,822) (2,291,738) (6,801,094) (2,291,738)

Basic and diluted loss per share (cents per share) 19 (1.27) (0.67)

Notes to the Financial Statements are included on pages 45 to 77.

41
 Balance
Sheet

AT 30 JUNE 2009 Notes Consolidated Company

2009 2008 2009 2008
$ $ $ $
CURRENT ASSETS
Cash and cash equivalents 24 32,296,718 2,799,198 32,296,718 2,799,198
Other receivables 8 838,981 78,004 838,981 78,004
Other financial assets 9 3,532,500 37,884 3,532,500 27,884
Prepayments 10 9,444 - 2,274 -
TOTAL CURRENT ASSETS 36,677,643 2,915,086 36,670,473 2,905,086

NON CURRENT ASSETS

Other financial assets 9 - 386,194 5,371,391 396,196
Property, plant and equipment 11 7,457,212 3,593,990 3,590,124 3,593,990
Exploration, evaluation and development expenditure 12 1,526,218 - - -
Borrowing costs 13 3,662,943 - 3,662,943 -
TOTAL NON CURRENT ASSETS 12,646,373 3,980,184 12,624,458 3,980,184

TOTAL ASSETS 49,324,016 6,895,270 49,294,931 6,895,270

CURRENT LIABILITIES
Trade and other payables 14 4,113,291 158,066 4,074,188 158,068
Borrowings 15 19,534 - 19,534 -
Provisions 16 107,578 55,208 104,868 55,208
TOTAL CURRENT LIABILITIES 4,240,403 213,274 4,198,590 213,274

NON-CURRENT LIABILITIES
Borrowings 15 65,534 - 65,534 -
Provisions 16 407,000 407,000 407,000 407,000
TOTAL NON-CURRENT LIABILITIES 472,534 407,000 472,534 407,000

TOTAL LIABILITIES 4,712,937 620,274 4,671,124 620,274

NET ASSETS 44,611,079 6,274,996 44,623,807 6,274,996

EQUITY
Issued capital 17 74,100,908 32,976,344 74,100,908 32,976,344
Reserves 18(a) 4,525,974 500,633 4,525,974 500,633
Accumulated losses 18(b) (34,015,803) (27,201,981) (34,003,075) (27,201,981)
TOTAL EQUITY 44,611,079 6,274,996 44,623,807 6,274,996

Notes to the Financial Statements are included on pages 45 to 77.

CATALPA RESOURCES ANNUAL REPORT 2009

Statement of
Changes in
Equity

YEAR ENDED 30 JUNE 2009 Notes Issued Capital Reserves Accumulated Losses Total
Consolidated $ $ $ $
AT 1 JULY 2007 30,088,089 498,673 (24,910,243) 5,676,519
Net income recognised directly in equity - - - -
Loss for the year - - (2,291,738) (2,291,738)
Total recognised income and expense - -(2,291,738) (2,291,738)

Issue of shares (net of expenses) 2,888,255 - - 2,888,255

Recognition of share based payments - 1,960 - 1,960

AT 30 JUNE 2008 32,976,344 500,633 (27,201,981) 6,274,996

Net income recognised directly in equity - - - -

Loss for the year 18(b) - - (6,813,822) (6,813,822)
Total recognised income and expense - - (6,813,822) (6,813,822)

Issue of shares (net of expenses) 17 41,124,564 - - 41,124,564

Share based payments 18(a) - 4,025,341 - 4,025,341

AT 30 JUNE 2009 74,100,908 4,525,974 (34,015,803) 44,611,079

Company
AT 1 JULY 2007 30,088,089 498,673 (24,910,243) 5,676,519

Net income recognised directly in equity - - - -

Loss for the year - - (2,291,738) (2,291,738)
Total recognised income and expense - - (2,291,738) (2,291,738)

Issue of shares (net of expenses) 2,888,255 - - 2,888,255

Recognition of share based payments - 1,960 - 1,960

AT 30 JUNE 2008 32,976,344 500,633 (27,201,981) 6,274,996

Net income recognised directly in equity - - - -

Loss for the year 18(b) - - (6,801,094) (6,801,094)
Total recognised income and expense - - (6,801,094) (6,801,094)

Issue of shares (net of expenses) 17 41,124,564 - - 41,124,564

Share based payments 18(a) - 4,025,341 - 4,025,341

AT 30 JUNE 2009 74,100,908 4,525,974 (34,003,075) 44,623,807

Notes to the Financial Statements are included on pages 45 to 77.

43
 Cash Flow
Statement

AT 30 JUNE 2009 Notes Consolidated Company

2009 2008 2009 2008
$ $ $ $
CASH FLOWS FROM OPERATING ACTIVITIES

Research and development grant received 25,605 320,885 25,605 320,885

Receipts from other debtors - 35,904 - 35,904
Payments to suppliers and employees (3,327,522) (3,123,579) (3,359,913) (3,123,579)
Interest received 262,533 264,790 262,523 264,790
NET CASH OUTFLOW FROM OPERATING ACTIVITIES 24(b) (3,039,384) (2,502,000) (3,071,785) (2,502,000)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (3,930,128) (137,743) (62,553) (137,743)

Payment for project development (1,526,218) - -
Transfer to term deposits (3,121,306) - (3,121,306) -
Proceeds received from release of tenement bonds - 1,500,000 - 1,500,000
Payment for option to purchase mining equipment - (25,000) - (25,000)
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (8,577,652) 1,337,257 (3,183,859) 1,337,257

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issues of ordinary shares net of expenses 41,124,564 2,888,255 41,124,564 2,888,255
Payment of loan to subsidiary - - (5,361,391) -
Repayment of borrowings (10,008) - (10,008) -
NET CASH INFLOW FROM FINANCING ACTIVITIES 41,114,556 2,888,255 35,753,164 2,888,255

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 29,497,520 1,723,512 29,497,520 1,723,512
Cash and cash equivalents at the beginning of the financial year 2,799,198 1,075,686 2,799,198 1,075,686

CASH AND CASH EQUIVALENTS AT THE END OF THE

FINANCIAL YEAR 24(a) 32,296,718 2,799,198 32,296,718 2,799,198

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009

1. General information
Catalpa Resources is a listed public company, incorporated and operating in Australia.

2. Significant accounting policies

Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and
Interpretations, and complies with other requirements of the law.
The financial report includes the separate financial statements of the Company and the consolidated financial statements of the Group.
Accounting Standards include Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the
financial statements and notes of the Company and the group comply with International Financial Reporting Standards (IFRS).
The financial statements were authorised for issue by the Directors on 23 September 2009.

Basis of preparation
The financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets.
All amounts are presented in Australian Dollars unless otherwise noted.

Critical accounting judgements and key sources of estimation uncertainty

In the application of AIFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that
are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors
that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future
periods. Refer to Note 3 for a discussion of critical judgements in applying the entity’s accounting policies and key sources of estimation uncertainty.

Adoption of new and revised accounting standards

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2009 reporting periods. The Group’s and the
Company’s assessment of these new standards and interpretations is set out below:

Reference Title Details Application date Impact on the Group Application

of standard date for Group

AASB 8 and Operating Segments New standard replacing AASB 1 January 2009 AASB 8 is a disclosure standard so 1 July 2009
AASB 2007-3 and consequential 114 Segment Reporting, which will have no direct impact on the
amendments to other adopts a management reporting amounts included in the Group’s
Australian Accounting approach to segment reporting. financial statements, although it
Standards may have an impact on the Group’s
segment disclosures.
AASB 123 Borrowing Costs The amendments to AASB 123 1 January 2009 These amendments to AASB 123 1 July 2009
(revised) and and consequential require that all borrowing costs require that all borrowing costs
AASB 2007-6 amendments to other associated with a qualifying asset associated with a qualifying asset
Australian Accounting be capitalised. be capitalised. The Group has no
Standards borrowing costs associated with
qualifying assets and as such the
amendments are not expected to
have any impact on the Group’s
financial report.

45
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

Adoption of new and revised accounting standards (continued)

Reference Title Details Application date Impact on the Group Application

of standard date for Group

AASB 101 Presentation of Introduces a statement of
(revised) and Financial Statements comprehensive income.
AASB 2007-8 and consequential Other revisions include impacts
amendments to other on the presentation of items
Australian Accounting in the statement of changes
Standards in equity, new presentation
requirements for restatements or
reclassifications of items in the
financial statements, changes in
the presentation requirements
for dividends and changes to the
titles of the financial statements.
1 January 2009 These amendments are only 1 July 2009
expected to affect the presentation
of the Group’s financial report and
will not have a direct impact on the
measurement and recognition of
amounts disclosed in the financial
report. The Group has not determined
at this stage whether to present a
single statement of comprehensive
income or two separate statements.

AASB 2008-1 Amendments to The amendments clarify the 1 January 2009 The Group has share-based payment 1 July 2009
Australian Accounting definition of ‘vesting conditions’, arrangements that may be affected
Standard – Share- introducing the term ‘non-vesting by these amendments. However, the
based Payments: conditions’ for conditions other Group has not yet determined the
Vesting Conditions than vesting conditions as extent of the impact, if any.
and Cancellations specifically defined and prescribe
the accounting treatment of an
award that is effectively cancelled
because a non-vesting condition
is not satisfied.
AASB 3 Business The revised standard introduces 1 July 2009 The Group has no current plans to 1 July 2009
(revised) Combinations a number of changes to enter into any business combinations
the accounting for business during the next financial year. The
combinations, the most Group has not yet assessed the
significant of which allows entities impact of early adoption, including
a choice for each business which accounting policy to adopt.
combination entered into – to
measure a non-controlling
interest (formerly a minority
interest) in the acquiree either at
its fair value or at its proportionate
interest in the acquiree’s net
assets. This choice will effectively
result in recognising goodwill
relating to 100% of the business
(applying the fair value option) or
recognising goodwill relating to
the percentage interest acquired.
The changes apply prospectively.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

Adoption of new and revised accounting standards (continued)

Reference Title Details Application date Impact on the Group Application

of standard date for Group

AASB 2008 - 5 Amendments to Makes amendments to 25 different 1 January These amendments are not 1 July 2009
Australian Accounting Standards and is equivalent to the 2009 expected to have a material
Standards arising IASB Standard Improvements to IFRSs impact on the Group’s
from the Annual issued in May 2008. The IASB’s annual financial report.
Improvements improvements project provides a vehicle
Process for making non-urgent but necessary
amendments to Standards. The
amendments to some Standards result
in accounting changes for presentation,
recognition or measurement purposes,
while some amendments that relate to
terminology and editorial changes are
expected to have no or minimal effect on
accounting.
AASB 2008-6 Amendments to This Amending Standard: 1 January The Group has share-based 1 July 2009
Australian Accounting • amends AASB 127 Consolidated and 2009 payment arrangements that
Standards - Cost of Separate Financial Statements to remove may be affected by these
an Investment in a the definition of the ‘cost method’ and to amendments. However,
Subsidiary, Jointly require the separate financial statements the Group has not yet
Controlled Entity or of a new parent formed as the result determined the extent of the
Associate of a specific type of reorganisation to impact, if any.
measure the cost of its investment in
the previous parent at the carrying
amount of its share of the equity items
of the previous parent at the date of the
reorganisation
• removes from AASB 118 Revenue
the requirement to deduct dividends
declared out of pre-acquisition profits
from the cost of an investment in a
subsidiary, jointly controlled entity or
associate. Therefore, all dividends from
a subsidiary, jointly controlled entity or
associate are recognised by the investor
as income
• implements consequential
amendments to AASB 136 Impairment
of Assets, introducing a new indicator
of impairment for investments in
subsidiaries, jointly controlled entities
and associates where a dividend has
been recognised
• allow first-time adopters to use a
deemed cost of either fair value or the
carrying amount under previous GAAP
to measure the initial cost of investments
in subsidiaries, jointly controlled entities
and associates in the separate financial
statements.

47
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

Adoption of new and revised accounting standards (continued)

Reference Title Details Application date Impact on the Group Application

of standard date for Group

Amendments Cost of an Investment The main amendments of 1 January 2009 Recognising all dividends received 1 July 2009
to International in a Subsidiary, Jointly relevance to Australian entities from subsidiaries, jointly controlled
Financial Controlled Entity or are those made to IAS 27 entities and associates as income
Reporting Associate deleting the ‘cost method’ and will likely give rise to greater income
Standards requiring all dividends from a being recognised by the Company
subsidiary, jointly controlled entity after adoption of these amendments.
or associate to be recognised In addition, if the Group enters into
in profit or loss in an entity’s any group reorganisation establishing
separate financial statements new parent entities, an assessment
(i.e., parent company accounts). will need to be made to determine
The distinction between pre- if the reorganisation meets the
and post-acquisition profits is conditions imposed to be effectively
no longer required. However, accounted for on a ‘carry-over basis’
the payment of such dividends rather than at fair value.
requires the entity to consider
whether there is an indicator of
impairment.
AASB 127 has also been
amended to effectively allow
the cost of an investment
in a subsidiary, in limited
reorganisations, to be based on
the previous carrying amount of
the subsidiary (that is, share of
equity) rather than its fair value.

AASB 2008-1 mprovements to The improvements project is 1 January The Group has not yet determined 1 July 2009
IFRSs an annual project that provides 2009 except the extent of the impact of the
a mechanism for making for amend- amendments, if any.
non-urgent, but necessary, ments to IFRS
amendments to IFRSs. The 5, which are
IASB has separated the effective from 1
amendments into two parts: Part July 2009.
1 deals with changes the IASB
identified resulting in accounting
changes; Part II deals with
either terminology or editorial
amendments that the IASB
believes will have minimal impact.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Principles of consolidation

Subsidiaries
The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being
the Company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 ‘Consolidated and Separate Financial Statements’.
Catalpa Resources Limited and its subsidiaries together are referred to in this financial report as the Group or consolidated entity.
Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements. The consolidated financial
statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the
Company ceases to control such entity. In preparing the Consolidated financial statements, all intercompany balances and transactions, and unrealised
profits arising within the Consolidated Entity are eliminated in full.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Catalpa Resources Limited.

(b) Segment reporting

A business segment is identified for a group of assets and operations engaged in providing products or services that are subject to risks and returns
that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particular
economic environment subject to risks and returns that are different from those of segments operating in other economic environments.

(c) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefit will flow to the entity and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised.
Sale of gold
Revenue from sales of gold is recognised when there has been a passing of the significant risks and rewards of ownership, which means the following:
• The product is in a form suitable for delivery and no further processing is required by or on behalf of the consolidated entity;
• The quantity and quality (grade) of the product can be determined with reasonable accuracy;
• The product has been despatched to the customer and is no longer under the physical control of the consolidated entity;
• The selling price can be measured reliably;
• It is probable that the economic benefits associated with the transaction will flow to the consolidated entity; and
• The costs incurred, or expected to be incurred, in respect of the transaction can be measured reliably.
Interest
Revenue is recognised as the interest accrues using the effective interest rate method (which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).

(d) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each
jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected
to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled
entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse
in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

49
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

(e) Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance
leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease
payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is
allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is
depreciated over the shorter of the asset’s useful life and the lease term.
Leases where a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases (note
21). Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis
over the period of the lease.

(f) Impairment of assets

At each reporting date, the Consolidated Entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the
Consolidated Entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-
generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss
immediately.

(g) Cash and cash equivalents

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to insignificant risk of changes in value, and bank overdrafts.

(h)Trade and other receivables

Receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when
collection of the full amount is no longer probable. Bad debts are written-off as incurred.

(i) Investments and other financial assets

Classification
The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity
investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at
each reporting date.
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally
for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are
classified as current assets.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included
in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans
and receivables are included in trade and other receivables in the balance sheet.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

(i) Investments and other financial assets (continued)
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management
has the positive intention and ability to hold to maturity. If the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the
whole category would be tainted and reclassified as available-for-sale. Held-to-maturity financial assets are included in non-current assets, except for those
with maturities less than 12 months from the reporting date, which are classified as current assets.
(iv) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or
not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12
months of the balance sheet date.

Recognition and derecognition

Regular purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset.
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets
carried at fair value through profit or loss is initially recognised at fair value and transaction costs are expensed to the income statement. Financial assets
are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are included in the income statement
as gains and losses from investment securities.

Subsequent measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from
changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within other income
or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income
statement as part of revenue from continuing operations when the Group’s right to receive payments is established.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation
differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences
related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in equity. Changes in the fair
value of other monetary and non-monetary securities classified as available-for-sale are recognised in equity.

Fair value
The fair values of quoted investments are based on last trade prices. If the market for a financial asset is not active (and for unlisted securities), the Group
establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on
entity-specific inputs.

Impairment
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of
equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator
that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed
from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments classified as available-
for-sale are not reversed through the income statement.

(j) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based
on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the last trade price.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.

51
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

(k) Property, plant and equipment
Land is carried at historical cost. All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the income statement during the reporting period in which they are incurred.
Land is not depreciated. Depreciation of plant and equipment is calculated using the straight line method to allocate their cost, net of their residual values,
over their estimated useful lives. The rates vary between 10% and 33% per annum.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. When revalued
assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

(l) Exploration, evaluation and development expenditure

Exploration and evaluation expenditure in relation to its mineral tenements is expensed as incurred. Where the Directors decide to progress the
development in an area of interest all further expenditure incurred relating to the area is capitalised. Projects are advanced to development status and
classified as mining properties when it is expected that further expenditure can be recouped through sale or successful development and exploitation of
the area of interest. Such expenditure is carried forward up to commencement of production at which time it is amortised over the life of the economically
recoverable reserves. All projects are subject to detailed review on an annual basis and accumulated costs written off to the extent that they will not be
recoverable in the future.

(m) Site restoration

In accordance with the consolidated entity’s published environmental policy and applicable legal requirements, a provision for site restoration in respect of
contaminated land is recognised when the land is contaminated.
The provision is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date, based on current
legal requirements and technology. Future restoration costs are reviewed annually and any changes are reflected in the present value of the restoration
provision at the end of the reporting period.
The amount of the provision for future restoration costs is capitalised and is depreciated in accordance with the policy set out in note 1(l). The unwinding
of the effect of discounting on the provision is recognised as a finance cost.

(n) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are
unsecured and are paid on normal commercial terms.

(o) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the
borrowings using the effective interest method. Fess paid on the establishment of loan facilities, which are not an incremental cost relating to the actual
draw-down of the facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between
the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in other income or other expenses.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date.

(p) Borrowing costs

Borrowing costs incurred for the construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the
asset for its intended use or sale. Other borrowing costs are expensed.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

(q) Employee benefits
(i) Wages and salaries, annual leave and other employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages
and salaries, annual leave, and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled within twelve months of the
reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other
employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees
up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds,
which have terms to maturity approximating the terms of the related liability, are used.
(ii) Share-based payments
The consolidated entity has an ‘Employee and Contractor Option Plan’ (“ECOP”) for employees, contractors and Executives (including Executive Directors)
of the company.
The plan permits the Company, at the discretion of the Directors, to grant options over unissued ordinary shares of the Company to eligible Directors,
members of staff and contractors as specified in the plan rules.
The options, issued for nil consideration, are granted in accordance with performance guidelines established by the directors of the Company.
The options are issued for a specified period and each option is convertible into one ordinary share. The exercise price of the options, determined in
accordance with the rules of the plan, is based on the market price of a share on invitation date, grant date, or another specified date after grant close. All
options expire on the earlier of their expiry date or termination of the employee’s employment.
Options do not vest until a specified period after granting and their exercise is conditional on the consolidated entity achieving certain performance hurdles.
There are no voting or dividend rights attached to the options. Voting rights will attach to the ordinary shares when the options have been exercised. The
options cannot be transferred and will not be quoted on the ASX.

(r) Issued capital

Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental
costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the
purchase consideration.

(s) Earnings per share

(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other
than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of
interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares.

(t) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation
authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the
taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or
payable to the taxation authority, are presented as operating cash flow.

53
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

2. Significant accounting policies (continued)

(u) Share based payments
Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by use of the Black & Scholes option pricing
model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based
on the consolidated entity’s estimate of shares that will eventually vest.
For cash-settled share based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined
at each reporting date.

(v) Rounding of amounts

The company is a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of
amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest $1.

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical judgements in applying the Group’s accounting policies
The following are the critical judgments (apart from those involving estimations which are dealt with below) that management has made in the process of
applying the Group’s accounting policies and that have the most significant effects on the amounts recognised in the financial statements.
Determination of mineral resources and ore reserves
The Group estimates its mineral resources and ore reserves in accordance with the Australian Code of Reporting of Exploration Results, Mineral Resources
and Ore Reserves (the “JORC Code”). The information on mineral resources and ore reserves is prepared by or under the supervision of Competent
Persons as defined in the JORC Code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation which
may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may,
ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and amortisation rates, asset carrying values and
provisions for decommissioning and restoration.
Estimation for the provision for rehabilitation and dismantling
Provision for rehabilitation and dismantling property, plant and equipment is estimated taking into consideration facts and circumstances available at the
balance sheet date. This estimate is based on the expenditure required to undertake the rehabilitation and dismantling, taking into consideration time
value of money.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.
Impairment of property, plant and equipment
The Group reviews for impairment of property, plant and equipment, in accordance with its accounting policy. The recoverable amount of these assets
has been determined based on higher of the assets’ fair value less costs to sell and value in use. These calculations require the use of estimates and
judgements.
Impairment of capitalised mine development expenditure
The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved, probable and
inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environment
restoration obligations) and changes to commodity prices.
To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the
period in which this determination is made.

4. SEGMENT INFORMATION
Description of segments
The Group’s operations are in the mining industry in Australia.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

5. REVENUE
Interest revenue 263,929 263,321 263,929 263,321

6.OTHER INCOME AND EXPENSES

(a) Other income:
- Other income 75,287 10,699 75,287 10,699
75,287 10,699 75,287 10,699

(b) Loss before income tax
includes the following
specific expenses:
Rental of premises under
operating lease 231,790 203,183 231,790 203,183
Consulting fees 536,373 151,970 536,373 151,970
Employee benefits:
- Salary and Wages 867,062 198,590 863,965 198,590
- Share based payments 252,059 1,960 252,059 1,960
- Superannuation 99,767 47,582 99,767 47,582

55
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

7.INCOME TAX
(a) Income tax expense/(benefit)
Research & design rebate (25,605) (320,885) (25,605) (320,885)
Deferred tax benefit on origination and
reversal of temporary differences - - - -
Total income tax benefit per income statement (25,605) (320,885) (25,605) (320,885)

(b) Numerical reconciliation of income tax benefit

to prima facie tax payable
Loss from continuing operations before income
tax benefit (6,839,427) (2,291,738) (6,826,699) (2,291,738)
Prima facie tax benefit at the Australian tax
rate of 30% (2008: 30%) (2,051,828) (687,521) (2,048,010 ) (687,521)
Add tax effect of:
Non-deductible expenses 126,343 27,552 126,343 27,552
Effect of current year tax losses not recognised 1,925,485 348,209 1,921,667 348,209
Effect of reversal of temporary differences - 375,216 - 375,216
- 63,456 - 63,456
Less tax effect of:
Tax deductible equity raising costs - (63,456) - (63,456)
Research & design rebate (25,605) (320,885) (25,605) (320,885)
(25,605) (384,341) (25,605) (384,341)
Income tax (benefit) (25,605) (320,885) (25,605) (320,885)

(c) Amounts recognised directly in equity

Relating to equity raising costs - (267,102) - 54,530
Deferred tax expense/(benefit) attributable to
entity recognised in equity - (267,102) - 54,530

(d) Recognised deferred tax assets & liabilities

Consolidated & Company
Assets Liabilities Net
2009 2008 2009 2008 2009 2008
$ $ $ $ $ $
Accruals & provisions 203,785 5,655 - - 203,785 5,655
Mine properties - - (457,805) - (457,805) -
Depreciation - - (979,494) - (979,494) -
Prior year losses now recognised 1,233,996 - - - 1,233,996 -
Other items - - (482) (5,655) (482) (5,655)
1,437,781 5,655 (1,437,781) (5,655) - -

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

7. INCOME TAX (continued)

(e) Movement in temporary differences
recognised during the year
Balance at Recognised in Recognised in Balance at
1 July 2008 income equity 30 June 2009
$ $ $ $
Accruals & provisions 5,655 198,130 - 203,785
Mine properties - (457,805) - (457,805)
Depreciation - (979,494) - (979,494)
Prior year losses now recognised - 1,233,996 - 1,233,996
Other items (5,655) 5,173 - (482)
Net tax assets/(liabilities) - - - -

Balance at Recognised in Recognised in Balance at

1 July 2007 income equity 30 June 2008
$ $ $ $
Accruals & provisions 3,699 1,956 - 5,655
Other items (3,699) (1,956) - (5,655)
Net tax assets/(liabilities) - - - -

(f) Unrecognised deferred tax assets

Consolidated Company
2009 2008 2009 2008
$ $ $ $
Deferred tax assets at 30% have not been
recognised in respect of the following:
Deductible temporary differences - 300,055 - 300,055
Tax losses 7,222,005 5,488,692 7,222,005 5,488,692
Capital losses - 53,831 - 53,831
7,222,005 5,842,578 7,222,005 5,842,578

No income tax is payable by the consolidated entity. The Directors have considered it prudent not to bring to account the future income tax benefit of
income tax losses and exploration deductions until there is virtual certainty of deriving assessable income of a nature and amount to enable such benefit to
be realised.
This future income tax benefit will only be obtained if:
(a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and
(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.

57
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

8. OTHER RECEIVABLES
Government taxes receivable 719,992 56,468 719,992 56,468
Other receivables 118,989 21,536 118,989 21,536
838,981 78,004 838,981 78,004

9 .OTHER FINANCIAL ASSETS

Current
Term deposits - 37,884 - 27,884
Term deposits on tenements and
performance bonds(i) 3,507,500 - 3,507,500
Other deposits 25,000 - 25,000 -
3,532,500 37,884 3,532,500 27,884

Non-current
Shares in unlisted controlled entity – at cost - - 2 2
Loan to controlled entity - - 5,371,387 10,000
Term deposits on tenements and performance bonds - 386,194 - 386,194
- 386,194 5,371,389 396,196

(i) The performance bonds will be replaced with a

bank guarantee subsequent to the year end and
the deposit monies returned to the Group. Up until
the date the bank guarantee is put in place the
Group cannot access these funds until the related
restoration works have been completed

10. PREPAYMENTS
Current
Prepaid expenses 9,444 - 2,274 -

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

11. PROPERTY, PLANT AND EQUIPMENT

Consolidated Freehold Land Plant and Total
Equipment
$ $ $
Gross carrying amount
Balance at 1 July 2007 391,301 8,117,837 8,509,138
Additions - 137,744 137,744
Increase in provision for rehabilitation to the land 83,000 - 83,000
Balance at 30 June 2008 474,301 8,255,581 8,729,882
Additions - 4,025,204 4,025,204
Balance at 30 June 2009 474,301 12,280,785 12,755,086

Accumulated depreciation, amortisation and impairment

Balance at 1 July 2007 - (4,909,058) (4,909,058)
Depreciation charge - (142,533) (142,533)
Impairment loss (84,301) - (84,301)
Balance at 30 June 2008 (84,301) (5,051,591) (5,135,892)
Depreciation charge - (161,982) (161,982)
Balance at 30 June 2009 (84,301) (5,213,573) (5,297,874)

Net book value

As at 30 June 2008 390,000 3,203,990 3,593,990
As at 30 June 2009 390,000 7,067,212 7,457,212

(i) During the previous year the Company carried out a valuation of the land. Based on an independent appraisal, concluded that the fair value for the land
was $390,000, causing an impairment expense of $84,301 for the year after an additional $83,000 required to be provided to rehabilitate the land.
(ii) Mine machinery includes the Big Bell Mill which had a carrying value at the beginning of the previous year of $2,850,000. During the previous year
the Company carried out an impairment assessment of the Big Bell Mill. Based on an independent appraisal, the carrying value of the Big Bell Mill of
$2,850,000 was appropriate. This impairment has not been reversed in the current year, as there is no objective evidence to support that the factors that
lead to the impairment have reversed at year end.
(iii) Management have considered the existence of any impairment triggers that would require a review of the carrying value of cash generating units as
required by AASB 136. No impairment triggers were noted.

59
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Parent Freehold Land Plant and Total
Equipment
$ $ $
Gross carrying amount
Balance at 1 July 2007 391,301 8,117,837 8,509,138
Additions - 137,744 137,744
Increase in provision for rehabilitation to the land 83,000 - 83,000
Balance at 30 June 2008 474,301 8,255,581 8,729,882
Additions - 157,630 157,630
Balance at 30 June 2009 474,301 8,413,211 8,887,512

Accumulated depreciation, amortisation and impairment

Balance at 1 July 2007 - (4,909,058) (4,909,058)
Depreciation charge - (142,533) (142,533)
Impairment loss (84,301) - (84,301)
Balance at 30 June 2008 (84,301) (5,051,591) (5,135,892)
Depreciation charge - (161,496) (161,496)
Balance at 30 June 2009 (84,301) (5,213,087) (5,297,388)

Net book value

As at 30 June 2008 390,000 3,203,990 3,593,990
As at 30 June 2009 390,000 3,200,124 3,590,124

Consolidated Company
2009 2008 2009 2008
$ $ $ $

12 .EXPLORATION, EVALUATION AND

DEVELOPMENT EXPENDITURE
Evaluation and development costs carried forward in
respect of mining areas of interest
Opening net book amount - - - -
Incurred during the year 1,526,218 - - -
Closing net book amount 1,526,218 - - -

13. BORROWING COSTS

Prepaid borrowing costs 3,662,943 - 3,662,943 -

Prepaid borrowing costs were paid to Macquarie Bank Limited as a fee for arranging finance for the Edna May Operations. The financing facility was
executed after the year end (refer to note 30). In the year ending 30 June 2010, these costs will be reclassified against the loan, following the initial drawn
down against this facility. The costs will be amortised over the life of the loan in accordance with the Company’s accounting policies (refer to note 2).

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

14.TRADE AND OTHER PAYABLES

Trade payables 3,865,176 105,363 3,865,176 105,363
Other payables and accruals 248,115 52,703 209,012 52,705
4,113,291 158,066 4,074,188 158,068

15. BORROWINGS
Secured at amortised cost
Current
Finance lease liabilities 19,534 - 19,534 -

Non-current
Finance lease liabilities 65,534 - 65,534 -

Secured by assets leased. The borrowings are
fixed interest rate debt with repayment periods not
exceeding 5 years. The current weighted average
effective interest rate on the finance lease liabilities
is 6.6%.

16. PROVISIONS
Current
Employee benefits 107,578 55,208 104,868 55,208

Non-current
Site restoration 407,000 407,000 407,000 407,000

Movements in provision for site restoration
Consolidated Company
$ $
Non-current
Carrying amount at start of year 407,000 407,000
Provisions made during the year -
Provisions used during the year -
Carrying amount at end of year 407,000 407,000

Site restoration
The provision includes the rehabilitation of the evaporative ponds at the Edna May Gold Project. Under certain conditions, Newmont Mining Corporation
Ltd is responsible for some rehabilitation of mining tenements M77/88 and M77/110.

61
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

17. ISSUED CAPITAL

(a) Share capital
2009 2008
Number of shares $ Number of shares $
Ordinary shares fully paid 1,171,777,896 74,100,908 345,377,313 32,976,344

(b) Movements in ordinary share capital

2009 2008
Number of shares $ Number of shares $
Beginning of the financial year 345,377,313 32,976,344 307,002,051 30,088,089
Issued during the year:
− Issue of shares for drilling services 3,426,014 181,755 - -
− First tranche of capital raising 74,229,332 4,453,760 - -
− Second tranche of capital raising 450,194,007 27,011,640 - -
− Placement of shares 172,723,071 3,454,462 38,375,256 3,070,020
− Issued on exercise of options 72,926 7,293 6 1
− Issued under share purchase plan 125,755,233 7,545,314 - -
Less transaction costs - (1,529,660) - (181,766)
End of the financial year 1,171,777,896 74,100,908 345,377,313 32,976,344

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of
and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each
share is entitled to one vote.

(c) Options on issue Number of options

2009 2008
Listed:
− Exercisable at 10 cents, on or before 31 October 2011 172,723,065 -
− Exercisable at 10 cents, on or before 30 June 2010 38,302,294 38,375,250
Unlisted:
− Exercisable at 11 cents, on or before 22 Nov 2010 200,000 200,000
− Exercisable at 8 cents, on or before 29 April 2011 100,000 100,000
− Exercisable at 8 cents, on or before 23 December 2013 4,375,000 -
− Exercisable at 10 cents, on or before 23 December 2013 4,375,000 -
− Exercisable at 6 cents, on or before 23 December 2013 625,000 -
− Exercisable at 12 cents, on or before 23 December 2013 4,375,000 -
− Exercisable at 14 cents, on or before 23 December 2013 3,750,000-
− Exercisable at 6 cents, on or before 11 March 2014 1,250,000 -
− Exercisable at 8 cents, on or before 11 March 2014 1,250,000 -
− Exercisable at 10 cents, on or before 11 March 2014 1,250,00 -
− Exercisable at 12 cents, on or before 11 March 2014 1,250,000 -
− Exercisable at 7.5 cents, on or before 31 March 2014 66,666,666 -
Total options on issue at year end 300,492,025 38,675,250

Share options carry no rights to dividends and no voting rights. Further details of the employees and contractors share option plan are contained in note 26
to the financial statements

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

18.RESERVES AND
ACCUMULATED LOSSES
(a) Reserves
Share-based payments reserve
Balance at beginning of year 500,633 498,673 500,633 498,673
Borrowing costs 3,773,333 - 3,773,333 -
Employee share options 252,008 1,960 252,008 1,960
Balance at end of year 4,525,974 500,633 4,525,974 500,633

(b) Accumulated losses

Balance at beginning of year (27,201,981) (24,910,243) (27,201,981) (24,910,243)
Net loss for the year (6,813,822) (2,291,738) (6,801,094) (2,291,738)
Balance at end of year (34,015,803) (27,201,981) (34,003,075) (27,201,

(c) Nature and purpose of reserves

Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options issued.

19. LOSS PER SHARE

Consolidated
2009 2008
$ $
(a) Reconciliation of earnings used in
calculating loss per share
Loss attributable to the ordinary
equity holders of the Company used in
calculating basic and diluted loss per share (6,813,822) (2,291,738)

Number of Number of
shares shares
(b) Weighted average number of shares used
as the denominator
Weighted average number of ordinary shares used
as the denominator in calculating basic and
diluted loss per share 537,659,736 343,699,704

(c) Information on the classification of options

As the Group has made a loss for the year 30 June 2009,all options on issue are considered antidilutive and have not been included in the calculation of
diluted loss per share. The options could potentially dilute basic loss per share in the future.

20. DIVIDENDS
No dividends were paid during the financial year.

63
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

21.COMMITMENTS
(a) Exploration commitments
Within one year 693,100 579,200 693,100 579,200
Longer than 1 year, not longer than 5 years - - - -
693,100 579,200 693,100 579,200

All of the company’s tenements are situated in the state of Western Australia.
In order to maintain an interest in the mining and exploration tenements in which the Company is involved, the Company is committed to meet the
conditions under which the tenements were granted and the obligations of any joint venture agreements. The timing and amount of exploration
expenditure commitments and obligations of the Company are subject to the minimum expenditure commitments required as per the Mining Act, as
amended, and may vary significantly from the forecast based upon the results of the work performed which will determine the prospectivity of the relevant
area of interest. These obligations are not provided for in the financial report.
No estimate has been given of expenditure commitments beyond 12 months as this is dependent on the Directors’ ongoing assessment of operations and,
in certain circumstances, native title negotiations.

Consolidated Company
2009 2008 2009 2008
$ $ $ $
(b) Lease commitments: Group as lessee
Operating leases (non cancellable):
Minimum lease payments
within one year 136,013 88,000 136,013 88,000
later than one year but not later than five years 55,527 113,520 55,527 113,520
Greater than five years 42,260 - 42,260 -
233,800 201,520 233,800 201,520

The property lease is a non-cancellable lease with a two-year term expiring on 30 September 2010, with rent payable monthly in advance. Contingent
rental provisions within the lease agreement require the minimum lease payments to be increased by fixed amounts on the annual anniversary dates. The
lease allows for subletting of all lease areas.

(c) Physical gold delivery commitment

Gold for physical delivery Contracted gold sale price Value of committed sales
Consolidated ounces $ $
Within one year 19,624 1,557.50 30,564,380
later than one year but not later than five years 295,453 1,557.50 460,168,048
Greater than five years 37,240 1,557.50 58,001,300
352,317 1,557.50 548,733,728

The counterparty to the physical gold delivery contracts is Macquarie Bank Limited (“MBL”). The contracts are settled on a quarterly basis by physical
delivery of gold per MBL’s instructions. The contracts are accounted for as sale contracts with revenue recognised once the gold has been delivered to
MBL or its agent. The Chief Financial Officer is responsible for monitoring gold production to assess if the physical delivery commitments will be met in
any given quarter and reports the results of his review to the Managing Director on at least a monthly basis.
The physical gold delivery contract is considered a contract to sell a non-financial item, and is therefore out of the scope of AASB 139. As a result, no
derivatives are required to be recognised.
The Company has no other gold sale commitments.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

21. COMMITMENTS (continued)

(d) Capital expenditure commitments
Plant and equipment
Within one year 52,200,000 - - -
Longer than 1 year, not longer than 5 years - - - -
52,200,000 - - -

Capital expenditure commitments relate to a contract the Group has entered into for the construction of the Edna May Gold Treatment Plant. The total
cost of the project is estimated to be $52.2M which includes a guaranteed maximum price component of $46M. Should the actual cost of the guaranteed
maximum price component of the project be less, there is an under-run sharing arrangement between the Company and the contractor. An arrangement
has been entered into to pay the contractor for work completed to date if the contract is terminated prior to completion. This commitment is fully funded
by a loan facility with Macquarie Bank Limited (refer to note 30)

22. CONTINGENCIES
There are no material contingent liabilities or contingent assets of the Group at balance date.

23. SUBSIDIARIES
Name Country of Incorporation Ownership Interest
2009 2008
Westonia Mines Minerals Pty Ltd Australia 100% 100%
Edna May Operations Pty Ltd Australia 100% -

Edna May Operations Pty Ltd was incorporated on 31 March 2009.

65
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

Consolidated Company
2009 2008 2009 2008
$ $ $ $

24. CASH FLOW STATEMENT

(a) Reconciliation of cash and cash equivalents
Cash and cash equivalents as shown in the balance
sheets and the statements of cash flows 32,296,718 2,799,198 32,296,718 2,799,198

(b) Reconciliation of loss for the year to net cash
outflow from operating activities
Loss for the year (6,813,822) (2,291,738) (6,801,094) (2,291,738)
Non Cash Items:
Depreciation of non current assets 161,982 142,533 161,496 142,533
Share based payments 362,449 1,960 362,449 1,960
Exploration expenditure written off - - - -
Impairment loss on assets - 84,301 - 84,301
(Increase)/decrease in assets:
(Increase)/decrease in other receivables (748,093) 216,572 (758,093) 216,572
(Increase)/decrease in prepayments (9,444) 9,017 (2,274) 9,017
(Increase)/decrease in value of assets - (83,000) - (83,000)
Increase/(decrease) in liabilities:
(Decrease)/increase in trade and other payables 3,955,175 (638,275) 3,916,072 (638,275)
(Decrease)/increase in provisions 52,370 56,630 49,660 56,630
Net cash outflow from operating activities (3,039,383) (2,502,000) (3,071,784) (2,502,000)

(c) Financing facilities

There were no financing facilities in place at 30 Jun 2009.

(d) Non-cash investing and financing activities

Except for vehicles acquired under finance lease (refer note 15), there were no non-cash investing and financing activities during the financial year.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

25. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives
The Group and the Parent are exposed to financial risk through the normal course of their business operations. The key risks impacting the Group and the
Parent’s financial instruments are considered to be interest rate risk and credit risk. The Group’s financial instruments exposed to these risks are cash and
short term deposits, receivables and trade payables.
The consolidated entity’s Managing Director and chief financial officer monitor the Group’s and the Company’s risks on an ongoing basis and report to
the Board.

(b) Categories of financial instruments

The Group and the Company hold the following financial instruments
Consolidated Parent
2009 2008 2009 2008
Financial assets
Cash and cash equivalents 32,296,718 2,799,198 32,296,718 2,799,198
Other receivables 838,981 78,004 838,981 78,004
Other financial assets 3,532,500 424,078 8,903,891 424,078
36,668,199 3,301,280 42,039,590 3,301,282

Financial liabilities
Trade and other payables 4,113,291 158,066 4,074,188 158,068
Borrowings 85,068 - 85,068 -
4,198,359 158,066 4,159,256 158,068

(c) Capital risk management

The Group and the Company’s objectives when managing capital are to safeguard the Group and the Company’s ability to continue as a going concern
in order to provide future returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital. The management of the Group and the Company’s capital is performed by the Board.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development
of the business. The Board of Directors monitors the return on capital, which the consolidated entity defines as net operating income divided by total
shareholders’ equity.
There were no changes in the consolidated entity’s approach to capital management during the year.
The Group and the Company operate primarily in Australia. The Group is not subject to any externally imposed capital requirements.

(d) Interest rate risk management

The Group and the Parent are exposed to interest rate risk as entities in the Group deposit funds at both short-term fixed and floating rates of interest and
have fixed interest rate borrowings.
The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place
at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease represents management’s
assessment of the possible change in interest rates.
At reporting date, had interest rates been 50 basis points higher or lower and all other variables were held constant, the Group’s net loss would decrease
by $161,484 and reserves increase by $161,484 (2008: nil). This is mainly attributable to the Group’s exposure to interest rates on its variable rate
deposits.
The Group’s sensitivity to interest rates has increased during the current period due to the increase in variable rate deposits.

67
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

25. FINANCIAL INSTRUMENTS (continued)

(e) Liquidity risk management
Prudent liquidity risk management implies maintaining sufficient cash and term deposits, the availability of funding through an adequate amount of
committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and liabilities.
Maturities of financial assets and liabilities
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.
The tables below have been drawn up based on the undiscounted cash flows (including both interest and principal cash flows expected) using contractual
maturities of financial assets and the earliest date on which the Group and the Company can be required to pay financial liabilities. Amounts for financial
assets include interest earned on those assets except where it is anticipated the cash flow will occur in a different period.

Consolidated Weighted average Less than 1 1 to 3 3 months to 1 to 5

effective interest rate month months 1 year years 5+ years
% $ $ $ $ $
2009
Financial assets
Variable interest rate instruments 5.5 32,296,718 - 3,507,500 - -
Non-interest bearing - 838,981 - 25,000 - -
33,135,699 - 3,532,500 - -

Financial liabilities
Fixed interest rate instruments 10.37 1,484 3,047 15,003 65,534 -
Non-interest bearing 4,113,240 - - - -
4,114,724 3,047 15,003 65,534 -

2008
Financial assets
Variable interest rate instruments 7.12 2,799,198 - - - -
Fixed interest rate instruments 6.16 - - 35,000 386,194 -
Non-interest bearing - 78,004 - 2,884 - -
2,877,202 - 37,884 386,194 -

Financial liabilities
Non-interest bearing - 158,066 - - -
158,066 - - -

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

25. FINANCIAL INSTRUMENTS (continued)

Company Weighted average Less than 1 1 to 3 3 months to 1 to 5
effective interest rate month months 1 year years 5+ years
% $ $ $ $ $
2009
Financial assets
Variable interest rate instruments 2.9 32,296,718 - 3,507,500 - -
Non-interest bearing - 838,981 - 25,000 - -
33,135,699 - 3,532,500 - -

Financial liabilities
Variable interest rate instruments 10.37 1,484 3,047 15,003 65,534
Non-interest bearing 4,074,137 - - - -
4,075,621 3,047 15,003 65,534 -

2008
Financial assets
Variable interest rate instruments 7.12 2,799,198 - - - -
Fixed interest rate instruments 6.16 - - 35,000 386,194 -
Non-interest bearing - 78,004 - 2,884 - -
2,877,202 - 37,884 386,194 -

Financial liabilities
Non-interest bearing - 158,066 - - - -
158,066 - - - -

(d) Commodity price risk

The Group’s future revenues are exposed to movements in the gold price. To address this risk the Group has put in place physical gold delivery contracts
covering sales of 352,317ozs of gold at a price of $1,577.50 per ounce to be delivered over a period of approximately 6 years (refer to note 21). This
represents approximately 24% of the Edna May resource.

(e) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company or the Group. The
Group’s potential concentration of credit risk consists mainly of cash deposits with banks. The Group’s short term cash surpluses are placed with banks
that have investment grade ratings. The maximum credit risk exposure relating to the financial assets is represented by the carrying value as at the balance
sheet date. The Company and the Group considers the credit standing of counterparties when making deposits to manage the credit risk.
Considering the nature of the business at current, the Group believes that the credit risk is not material to the Group’s or Company’s operations.

(f) Fair value

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which
revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the
financial statements.
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined
in accordance with the accounting policies disclosed in note 2 to the financial statements.

69
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

26. SHARE-BASED PAYMENTS

Employees and Contractors Option Plan (“ECOP”)
An Employees and Contractors Option Plan (“ECOP”) has been established, approved by the Board on 18 April 2002 and at the Annual General Meeting
on 5 June 2002. The plan permits the Company, at the discretion of the Directors, to grant options over unissued ordinary shares of the Company to
eligible Directors, members of staff and contractors as specified in the plan rules.
The options, issued for nil consideration, are granted in accordance with performance guidelines established by the Directors of the Company. In
exercising their discretion under the rules, the Directors will take into account matters such as the position of the eligible person, the role they play in the
Company group, the nature or terms of their employment or contract and the contribution they make to the Company group as a whole.
The options are issued for a specified period and each option is convertible into one ordinary share. The exercise price of the options, determined in
accordance with the rules of the plan, is based on the market price of a share on invitation date, grant date, or another specified date after grant close. All
options expire on the earlier of their expiry date or termination of the employee’s employment. Options do not vest until a specified period after granting
and their exercise is conditional on the achievement of certain performance hurdles.
There are no voting or dividend rights attached to the options. Voting rights will attach to the ordinary shares when the options have been exercised. The
options cannot be transferred and will not be quoted on the ASX.
Set out below are summaries of the options granted:

Option series Number Grant date Expiry Date Exercise Weighted average fair value
Price value at grant date
cents cents
Issued under the ECOP
Mar 06 at 11 cents 200,000 Mar 06 22 Nov 10 11 2
Apr 08 at 8 cents 100,000 Apr 08 29 Apr 11 8 2
Dec 08 at 6 cents 625,000 Dec 08 23 Dec 13 6 2
Dec 08 at 8 cents 625,000 Dec 08 23 Dec 13 8 2
Dec 08 at 10 cents 4,375,000 Dec 08 23 Dec 13 10 2
Dec 08 at 12 cents 4,375,000 Dec 08 23 Dec 13 12 2
Dec 08 at 14 cents 3,750,000 Dec 08 23 Dec 13 14 2
Mar 09 at 6 cents 1,250,000 Jan 09 11 Mar 14 6 4
Mar 09 at 8 cents 1,250,000 Jan 09 11 Mar 14 8 3
Mar 09 at 10 cents 1,250,000 Jan 09 11 Mar 14 10 3
Mar 09 at 12 cents 1,250,000 Jan 09 11 Mar 14 12 3

Issued outside the ECOP

Dec 08 at 8 cents 3,750,000 Dec 08 23 Dec 13 8 2
May 09 at 7.5 cents 66,666,666 May 09 31 Mar 14 7.5 8

The weighted average remaining contractual life of share options issued as share-based payments and outstanding at the end of the financial year was 4.7
years (2008: 2.7 years), with exercise prices ranging from 6 to 14 cents.

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

26. SHARE-BASED PAYMENTS (continued)

The weighted average fair value of the options granted during the year as share-based payments was 4.9 cents (2008: 3.3 cents). Where relevant, the
expected life used in the model has been adjusted based on management’s best estimate for the effects of non-transferability and exercise restrictions.
Expected volatility is based on the historical share price volatility of Catalpa Resources Limited. The price was calculated by using the Black-Scholes Euro-
pean Option Pricing Model applying the following inputs:

Inputs into the model

Option series Mar 06 at Apr 08 at Dec 08 at Dec 08 at Dec 08 at Dec 08 at Dec 08 at
11 cents 8 cents 6 cents 8 cents 10 cents 12 cents 14 cents
Grant date share price
Exercise price (cents) 11 8 6 8 10 12 14
Expected volatility (%) 80 80 80 80 80 80 80
Option life (years) 5 5 5 5 5 5 5
Dividend yield - - - - - - -
Risk-free interest rate (%) 4.25 4.25 4.25 4.25 4.25 4.25 4.25

Inputs into the model

Option series Dec 08 at Dec 08 at Dec 08 at Dec 08 at May 09 at
6 cents 8 cents 10 cents 12 cents 7.5 cents
Grant date share price
Exercise price (cents) 11 8 6 8 10
Expected volatility (%) 80 80 80 80 80
Option life (years) 5 5 5 5 5
Dividend yield - - - - -
Risk-free interest rate (%) 4.25 4.25 4.25 4.25 4.25

71
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

26. SHARE-BASED PAYMENTS (continued)

The following reconciles the outstanding share options granted under the employee share option plan at the beginning and end of the financial year.

2009 2008
Number of options Weighted average Number of options Weighted average
exercise price exercise price
cents cents
Outstanding at the beginning of the year 300,000 10.0 4,100,000 17.6
Granted 18,750,000 10.8 100,000 8.0
Exercised - 10.0 - -
Lapsed - - (3,900,000) 17.6
Expired - - - -
Outstanding at year-end 19,050,000 10.8 300,000 10.0
Exercisable at year-end 15,167,188 10.8 - 10.0

Options issued as share-based payments

outside of the employee share option plan

Outstanding at the beginning of the year - - - -

Granted 70,416,666 7.5 - -
Exercised - - - -
Lapsed - - - -
Expired - - - -
Outstanding at year-end 70,416,666 7.5 - -
Exercisable at year-end 70,416,666 7.5 - -

27. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Details of key management personnel
(i) Directors
The following persons were directors of Catalpa Resources Limited during the financial year:
John Rowe Non Executive Chairman
Bruce McFadzean Managing Director
Murray Pollock Non Executive Director
Barry Sullivan Non Executive Director
Nigel Johnson Non Executive Director (appointed 20 August 2008)
Chris Melloy Non Executive Director (resigned 12 December 2008)

(ii) Other Key Management Personnel

The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during
the financial year:
Erik Palmbachs Chief Financial Officer (appointed 20 October 2008)
Stuart Pether General Manager – Operations (appointed 12 January 2009)
Graham Anderson Company Secretary
Leonard Math Company Secretary

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

27. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

(b) Key management personnel compensation

Consolidated Company
2009 2008 2009 2008
$ $ $ $
Short-term benefits 1,017,818 612,986 1,017,818 612,986
Post employment benefits 75,368 29,460 75,368 29,460
Termination benefits - 160,000 - 160,000
Share-based payments 252,059 - 252,059 -
1,345,245 802,446 1,345,245 802,446

(c) Equity interests in related parties

Equity interests in subsidiaries
Details of the percentage ownership of subsidiaries are disclosed in note 23 to the financial statements.

(d) Transactions with key management personnel

Key management personnel compensation
Details of key management personnel compensation are provided in the Remuneration Report of the Directors’ Report designated as audited.

Loans to key management personnel

There were no loans to key management personnel during the period.

73
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

28. RELATED PARTY TRANSACTIONS

(a) Key management personnel equity holdings
(i) Fully paid ordinary shares of Catalpa Resources Limited

Received on Balance at end

Balance at start Granted as exercise of Net other of period or date
of period compensation options change of resignation
No No No No No
2009
Directors
John Rowe - - - 1,000,000 1,000,000
Bruce McFadzean 345,000 - - 672,500 1,017,500
Murray Pollock 15,725,802 - - 2,545,360 18,271,162
Barry Sullivan - - - - -
Nigel Johnson (i) - - - 1,500,000 1,500,000
Chris Melloy (ii) 1,504,688 - - - 1,504,688

Executives
Erik Palmbachs (iii) - - - 83,333 83,333
Stuart Pether (iv) - - - 1,666,666 1,666,666
Graham Anderson - - - - -
Leonard Math - - - - -

2008
Directors
John Rowe - - - - -
Bruce McFadzean(v) - - - 345,000 345,000
Murray Pollock 14,790,054 - - 935,748 15,725,802
Barry Sullivan (vi) - - - - -
Chris Melloy 1,337,500 - - 167,188 1,504,688
Mark Fitzpatrick (vii) 812,500 - - - 812,500
David Hatch (viii) 559,168 - - 69,897 629,065

Executives
Graham Anderson (ix) - - - - -
Leonard Math (ix) - - - - -
John Fitzgerald (x) - - - - -
Rowan Johnston (xi) - - - - -

(i) appointed 20 August 2008 (vi) appointed 16 June 2008

(ii) resigned 12 December 2008
(iii) appointed 20 October 2008
(iv) appointed 12 January 2009
(v) appointed 9 June 2008
(vii) resigned 27 February 2008
(viii) resigned 28 September 2007
(ix) appointed 2 August 2008
(x) resigned 31 July 2007
(xi) resigned 14 September 2007

CATALPA RESOURCES ANNUAL REPORT 2009

Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

28. RELATED PARTY TRANSACTIONS (continued)

(ii) Options
The numbers of options over ordinary shares in the Company held during the financial year by each Director of Catalpa Resources Limited and
other key management personnel of the Group, including their personally related parties, are set out below:

At end of period
Balance at end Vested Vested Options
Balance at Granted as Net other of period or date Balance but not and vested during
of period compensation exercised change of resignation vested exercisable exercisable period
No No No No No No No No No
2009
Directors
John Rowe - 2,000,000 - - 2,000,000 1,500,000 - 1,500,000 1,500,000
Bruce McFadzean - 10,000,000 - 172,500 10,172,500 7,672,500 - 7,672,500 7,500,000
Murray Pollock 935,748 1,000,000 - 2,317,054 4,252,802 3,067,054 - 3,067,054 750,000
Barry Sullivan - 1,000,000 - - 1,000,000 750,000 - 750,000 750,000
Nigel Johnson (i) - 1,000,000 - - 1,000,000 750,000 - 750,000 750,000
Chris Melloy (ii) 167,188 - - - 167,188 167,188 - 167,188 -

Executives
Erik Palmbachs (iii) - 2,500,000 - - 2,500,000 1,250,000 - 1,250,000 1,250,000
Stuart Pether (iv) - 5,000,000 - - 5,000,000 2,500,000 - 2,500,000 2,500,000
Graham Anderson - - - - - - - - -
Leonard Math - - - - - - - - -

2008
Directors
John Rowe - - - - - - - - -
Bruce McFadzean (v) - - - - - - - - -
Murray Pollock - - - 935,748 935,748 935,748 - 935,748 935,748
Barry Sullivan (vi) - - - - - - - - -
Chris Melloy - - - 167,188 167,188 167,188 - 167,188 167,188
Mark Fitzpatrick (vii) - - - - - - - - -
David Hatch (viii) 2,600,000 - - 69,897 2,669,897 n/a n/a n/a n/a

Executives
Graham Anderson (ix) - - - - - - - - -
Leonard Math (ix) - - - - - - - - -
John Fitzgerald (x) 1,000,000 - - - 1,000,000 n/a n/a n/a n/a
Rowan Johnston (xi) 250,000 - - - 250,000 n/a n/a n/a n/a

(i) appointed 20 August 2008 (v) appointed 9 June 2008 (ix) appointed 2 August 2008
(ii) resigned 12 December 2008 (vi) appointed 16 June 2008 (x) resigned 31 July 2007
(iii) appointed 20 October 2008 (vii) resigned 27 February 2008 (xi) resigned 14 September 2007
(iv) appointed 12 January 2009 (viii) resigned 28 September 2007
All options issued to key management personnel were made in accordance with the provisions of the employee share option plan. Further details of the
employee share option plan and of share options granted during the period are contained in notes 25 and 26.

75
 Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

28. RELATED PARTY TRANSACTIONS (continued)

Transactions with other related parties
Lion Manager
The Company paid $17,934 (2008: $40,000) in lieu of Directors fees, and expense reimbursements totalling $nil (2008: $12,952), to Lion Manager, the
management company responsible for the operation of Lion Selection Group Ltd, for the services of Mr Chris Melloy as a Non Executive Director. Mr Melloy
is an Executive Director of Lion Manager. Lion Selection Group Ltd is a substantial shareholder in Catalpa Resources Limited. An amount of $ nil (2008:
$10,000) was owing to Lion Manager at year end, included in trade and other payables.
Payments were made at commercial rates.

GDA Corporate
GDA Corporate, a company of which Mr Graham Anderson is a Director and Leonard Math is an employee, provided Company Secretarial, accounting and
other corporate services to Catalpa Resources Limited during the year. The amount paid for the year was $66,000 (2008:$56,500).
John Rowe and Associates
John Rowe and Associates, a company of which Mr John Rowe is a Director, provided external consultant services to Catalpa Resources Limited during the
year based on commercial rates and on an arm’s length basis. Total consultant fees paid to John Rowe and Associates is $30,250 (2008:$103,344). An
amount of $11,000 (2008: $10,227) was owing to John Rowe and Associates at year end, included in trade and other payables.
Holmesdale Holdings Pty Ltd
Holmesdale Holdings Pty Ltd, a company of which Mr Mark Fitzpatrick is a Director, provided external consultant services to Catalpa Resources Limited
during the previous year based on commercial rates and on an arm’s length basis. Total consultant fees paid to Holmesdale Holdings Pty Ltd is $nil
(2008:$85,250).
Glen Lorne Pty Ltd
Glen Lorne Pty Ltd, a company of which Mr Nigel Johnson is a Director, provided external consultant services to Catalpa Resources Limited during the year
based on commercial rates and on an arm’s length basis. Total consultant fees paid to Glen Lorne Pty Ltd is $11,375 (2008:$nil).

Parent entity
The ultimate parent entity within the Group is Catalpa Resources Limited.

Consolidated Company
2009 2008 2009 2008
$ $ $ $

29. REMUNERATION OF AUDITORS

During the year the following fees were paid or
payable for services provided by the auditor of the
Company, its related practices and non-related
audit firms:
Audit services
Audit or review of financial reports 61,632 31,000 61,632 31,000
Tax advice and due diligence in relation to t
he proposed merger with Lion Selection 142,865 - 142,865 -
204,497 31,000 204,497 31,000

CATALPA RESOURCES ANNUAL REPORT 2009



Notes to the
Financial
Statements
30 JUNE 2009
CONTINUED

30. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

The following significant events have occurred subsequent to year end:
• Construction of the Edna May Gold Project continued and as at the date of this report:
− the contract to construct the gold processing plant had been signed and preliminary works commenced;
− construction of the mining village had been completed; and
− earthworks for the gold processing plant had been completed.
• Catalpa Resources Limited (Catalpa) and Lion Selection Limited (Lion) announced on 24 June 2009 the proposed merger of Catalpa
and Lion’s gold assets. While the processing of the documentation associated with the merger is taking longer than anticipated, both
Catalpa and Lion Selection remain committed to the successful conclusion of the merger process in Q4 2009. There is no change in any
of the terms of the proposed merger, the demerger of Lion Selection Group, the 10¢ per share cash distribution by Lion or the termination
of Lion Manager. The merger has the unanimous support of the directors of both Catalpa and Lion.
• In July 2009 Catalpa was successful in obtaining credit approved project finance facility for the Edna May Gold Project with Macquarie
Bank. Along with funds raised via equity raisings prior to 30 June 2009 the Edna May Gold Project is fully funded. The facility consists of:
1. A$55M secured project loan facility;
2. up to A$10M mezzanine facility;
3. A$3.5M performance bond facility; and
4. gold hedging facility.
The merger of Lion Selection with Catalpa will result in a change in control of Catalpa which triggers a review event under the Macquarie
Bank facility. Macquarie Bank has agreed to waive the review event subject to, and conditional upon, certain amendments being made
to the syndicated facility agreement. The amendments are minor in nature and do not materially change the terms of the facility. As at
the date of this financial report, the amendments have been agreed to.
No other matter or circumstance has arisen since 30 June 2009, which has significantly affected, or may significantly affect the operations of the Group,
the result of those operations, or the state of affairs of the Group in subsequent financial years.

77
 Directors’
Declaration

In the Directors’ opinion:

(a) the financial statements and notes set out on pages 41 to 77 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
and
(ii) giving a true and fair view of the Company’s and the consolidated entity’s financial position as at 30 June 2009 and of their
performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and
(c) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2
(d) the audited remuneration disclosures set out on pages 5 to 10 of the Directors’ report comply with Accounting Standards AASB 124
Related Party Disclosures and the Corporations Regulations 2001.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act
2001.
This declaration is made in accordance with a resolution of the directors.

Bruce McFadzean
Managing Director
Perth, 23 September 2009

CATALPA RESOURCES ANNUAL REPORT 2009

Independent
Auditor’s
Report

79
 Directors’
Declaration

28 to 34

CATALPA RESOURCES ANNUAL REPORT 2009

ASX
Additional
Information

Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at
30 September 2009.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:

Ordinary shares Listed Options (CAHO) Listed Options (CAHOB)

Number of holders Number of holders Number of holders
1 1,000 130 40 4
1,001 5,000 213 130 46
5,001 10,000 451 78 57
10,001 100,000 1,844 161 285
100,001 and over 773 40 101
3,411 449 493

The number of shareholders holding less than a marketable parcel of shares is 195 with 183,649 shares.

(b) Twenty largest shareholders

The names of the twenty largest holders of quoted ordinary shares are:

Listed ordinary shares

Number of shares Percentage of ordinary shares
1 Lion Selection Group Ltd 549,149,732 46.86%
2 HSBC Custody Nominees Australia Ltd 82,826,137 7.07%
3 ANZ Nom Ltd 40,167,260 3.43%
4 National Nominees Ltd 39,700,113 3.39%
5 Reneagle Pty Ltd 19,027,682 1.62%
6 Goldrich Holdings Pty Ltd 16,000,000 1.37%
7 Nefco Nominees Pty Ltd 13,400,000 1.14%
8 Bennett Robert W & D G 10,755,677 0.92%
9 Springtide Cap Pty Ltd 10,000,000 0.85%
10 Prospect Cust Ltd 9,085,624 0.78%
11 Yandal Investments Pty Ltd 8,859,375 0.76%
12 Merrill Lynch Australia Nominees Pty Ltd 6,015,000 0.51%
13 Drummond Shay Margaret 5,533,572 0.47%
14 Geddes Angus William S 4,651,786 0.40%
15 Charlemagne Investments Pty Ltd 4,395,345 0.38%
16 Turner Philip S & J W 4,116,668 0.35%
17 Paul C & Melloy A C 3,632,970 0.31%
18 Centreline Drilling Pty Ltd 3,509,348 0.30%
19 Parkrange Nominees Pty Ltd 3,000,000 0.26%
20 Greenslade Holdings Pty Ltd 2,609,034 0.22%
836,435,323 71.39%

Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

81
 ASX
Additional
Information
CONTINUED

(c) Substantial shareholders

The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:
Number of Shares
Lion Selection Group Ltd 549,149,732

(d) Twenty largest option holders (CAHO) exercisable at $0.10 expiring 30 June 2010
The names of the twenty largest holders of quoted options are:
Listed Options
Number of options Percentage of ordinary shares
1 Lion Selection Group Ltd 16,899,589 44.12%
2 Rubiton Pty Ltd 1,810,885 4.73%
3 HSBC Custody Nominees Australia Ltd 1,031,250 2.69%
4 Fortis Clearing Nominees Pty Ltd 1,018,432 2.66%
5 Evans Simon Robert 994,288 2.60%
6 Yandal Investments Pty Ltd 984,375 2.57%
7 Goldrich Holdings Pty Ltd 879,648 2.30%
8 Robert Macfadyen Pty Ltd 696,875 1.82%
9 Matchett Shane A & M A 639,863 1.67%
10 David E Perks & Assocs Pty Ltd 500,000 1.31%
11 Recht Alex & Helen 500,000 1.31%
12 Strange Kevin & Bonsu I 375,000 0.98%
13 Dalla Bosca John & J 367,341 0.96%
14 Bosch Katrina Alison 350,000 0.91%
15 Thorne Thomas S & C M 330,114 0.86%
16 Laguna Bay Cap Pty Ltd 304,757 0.80%
17 Rohde Beverley Megan 300,000 0.78%
18 Option Opportunity Fund Pty Ltd 280,000 0.73%
19 Cohen Seymour Bentley 268,250 0.70%
20 Parker Roger A A & M D 260,500 0.68%
28,791,167 75.18%

CATALPA RESOURCES ANNUAL REPORT 2009

ASX
Additional
Information
CONTINUED

(e) Twenty largest option holders (CAHOB) exercisable at $0.10 expiring 31 October 2011
The names of the twenty largest holders of quoted options are:
Listed Options
Number of options Percentage of ordinary shares
1 Lion Selection Group Ltd 112,407,597 65.08%
2 Calliton Pty Ltd 4,905,250 2.84%
3 Parkrange Nominees Pty Ltd 3,500,000 2.03%
4 Goffacan Pty Ltd 3,000,000 1.74%
5 Rubiton Pty Ltd 2,296,687 1.33%
6 Drummond Shay Margaret 2,011,396 1.16%
7 Goldrich Holdings PL 2,000,000 1.16%
8 Geddes Angus William S 1,717,262 0.99%
9 Super 1136 Pty Ltd 1,500,000 0.87%
10 Goffacan Pty Ltd 1,500,000 0.87%
11 Reneagle Pty Ltd 1,425,894 0.83%
12 Custodial Services Ltd 1,100,000 0.64%
13 Burford Matthew 1,050,000 0.61%
14 Charlemagne Investments Pty Ltd 1,000,000 0.58%
15 Waldron Mark Andrew 698,164 0.40%
16 Sheard Kenneth 680,485 0.39%
17 Burg Brian 669,753 0.39%
18 Kwort Joseph & Fokas K A 600,000 0.35%
19 Little Gray William 525,000 0.30%
20 Resnik Mark 483,000 0.28%
143,070,488 82.84%

83
 ASX
Additional
Information
CONTINUED

(f) Schedule of interests in mining tenements

Location Tenement Percentage held / earning

WESTERN AUSTRALIA
BODALIN
Bodalin SW E77/1165 Granted 100%
BODALIN SOUTH
Kent Road E77/1452 Granted 100%
JILBADGIE
Jilbadgie East E77/1132 65%
MINE
Paddock M77/110 Granted 100%
Golden Point East M77/124 Granted 100%
Mine M77/88 Granted 100%
SANDFORD ROCKS
Sandford Rocks M77/1494 Application 100%
WESTONIA
Begley E77/1069 Granted 100%
Westonia N.E. E77/1324 Granted 100%
Westonia Belt E77/516 Granted 100%
Westonia West E77/990 Granted 100%
Westonia L77/18 Granted 100%
Westonia NW P77/3712 Plainted 100%
West Westonia P77/3713 Granted 100%
Westonia NE P77/3714 Plainted 100%
Bodalin P77/3875 Granted 100%
Corsini Road P77/3876 Granted 100%
Hitching Road P77/3877 Granted 100%
Stoneman Road P77/3878 Granted 100%
Kaolin Street P77/3879 Granted 100%

CATALPA RESOURCES ANNUAL REPORT 2009

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