CRACOW GOLD PROJECT

Overview
The Cracow mine is located in central Queensland, Australia, approximately 4 kilometres from the township of Cracow and approximately 500 kilometres northwest of the city of Brisbane.

The Mine commenced operations in November 2004 and has consistently produced around 100,000 ounces per annum for the last five years. Ore throughput capacity exceeds 400,000 tonnes per annum with ore currently being sourced from the Royal, Sovereign, Klondyke and Crown mineralised zones. The gold mineralization occurs in steeply dipping low sulphidation epithermal fissure quartz veins developed at the intersection of major structures.

The Cracow Gold Mine is operated by Newcrest (70%) on behalf of the Cracow Mining Joint Venture. Catalpa’s 30% share of gold produced at the Cracow Gold Mine for the twelve months to 31 December 2009 was 31,233 ounces at cash cost of $500/ounce. The 30% share of Cracow is unhedged and unleveraged and continues to be fully exposed to the currently high A$ gold price providing a strong cashflow stream.

Ore Reserves of the project at 30 June 2009 were 0.23 million ounces at 7.2g/t gold, compared with a Mineral Resource of 0.84 million ounces at 8.2g/t gold. These figures reflect 0.49 million ounces of Inferred Resource that cannot yet be converted to Reserve. Exploration success has led to the delineation of the 225,000 ounce Kilkenny Inferred Resource and identification of the Phoenix mineralised structure. Recent drilling on the Kilkenny structure has intersected further gold mineralisation to the south of the Resource and this may extend the known mineralisation envelope, adding further potential for mine life extension.

The Cracow Gold Mine is a developed underground operation with a high quality management team.  Cracow produces 95,000 – 105,000 ounces of gold annually and has outstanding potential to add substantially to the mine life through exploration success.

Geology
The gold mineralization occurs in steeply dipping low sulphidation epithermal fissure quartz veins. High-grade gold mineralization defined in the project resources occurs within five deposits (Royal Shoot, Crown Shoot, Sovereign Shoot, Klondike North and Kilkenny Shoot), each developed at the intersection of major structures. The Royal extends over a strike length of approximately 350 metres, the Crown is approximately 300 metres in strike length and the Sovereign has a strike length of 150 metres. The ore bodies average approximately 5 metres in width.

Mining
The underground orebodies are accessed from a decline and the open stoping mining method is used with concurrent waste backfilling. A small Newcrest mining team manages the contract mining operation.

Processing
Ore is processed by cyanide leach extraction in a conventional carbon-in-pulp processing circuit comprising leaching, adsorption, stripping and electrowinning to produce gold/silver doré bars.

Future Developments
Exploration around the project tenements indicates that additional mineralized vein structures exist in close proximity to the mine. The Phoenix, Empire, Stirling, Kilkenny, Klondyke and Rose's Pride structures provide opportunities for additional resources to extend the mine life. All of these structures have yielded drilling intercept grades in excess of 10g/t of gold.