Catalpa starts Edna May construction

West Perth-based Catalpa Resources has started construction on its $92 million Edna May gold project, just days after it announced a merger with its largest shareholder, Lion Selection.

The gold company announced today it had secured works approval from the Department of Environment and Conservation to start construction of its project near Westonia.

The approval comes a week after the company finalised the appointment of major site-works contractor GR Engineering Services, which have set up offices and communications on site.

GR will work on preliminary plant earthworks and the refurbishment of the 2.8 million tonne per annum processing plant.

"We remain very focused on advancing Edna May to production by mid 2010," managing director Bruce McFadzean said.

"Construction of Edna May's 88-man accommodation village in Westonia is 75% complete, and we are making excellent progress with the appointment of key personnel."

Last month, Catalpa announced it will merge through a scheme of arrangement with 47 per cent shareholder Lion Selection to create a mid-tier gold producer.

Under the scheme, Lion shareholders will receive one Catalpa share for every Lion share they hold after Catalpa undertakes a one-for-11 share consolidation.

Lion Selection will emerge with 61 per cent of the enlarged entity, which will retain the Catalpa Resources name and will remain listed on the Australian stock exchange.