TORONTO, ONTARIO — (Marketwire) — 08/14/12 — Caledonia Mining Corporation (the „Company“) (TSX: CAL)(OTCQX: CALVF)(AIM: CMCL) is pleased to announce its operating and financial results for the second quarter 2012 („Q2“ or the „Quarter“), which are reported below in Canadian dollars unless otherwise indicated.
Operational Highlights
Financial Highlights
Nama Base Metals Project, Zambia
A News Release issued on August 9, 2012 sets out a summary of the drilling programme that has been completed which confirms the existence of the mineralised zone that was identified in 2011 and describes the further drilling work which has already commenced.
Indigenisation
Caledonia and Blanket have made considerable progress in implementing the Memorandum of Understanding („MoU“) which was signed with the Government of Zimbabwe in February 2012 pursuant to which Indigenous Zimbabweans will acquire an effective 51% ownership of the Blanket Mine for a paid transactional value of US$30.09 million. The various transaction documents have been signed and Blanket has now received its Certificate of Compliance from the Government of Zimbabwe. Completion of the agreements is subject to a pending condition precedent being the approval of the Reserve Bank of Zimbabwe for the transactions contemplated in the MoU, underlying agreements and related transactions to give effect to the Indigenisation programme.
Commenting on Caledonia-s performance, Stefan Hayden, President and CEO, said: „The second quarter of 2012 showed a substantial improvement in gold production at the Blanket Mine in Zimbabwe. Gold production in the quarter was 11,560 ounces – 26% higher than the preceding quarter and 41% higher than the second quarter of 2011. Increased gold production, further improvements in gold recoveries and continued close attention to costs contributed to a reduction in average operating costs from US$648 per ounce of gold produced in the preceding quarter to US$547 per ounce of gold produced. Higher production and lower costs contributed to the increase in gross profits. Gross profit for the Quarter was $10,067,000 compared to $8,996,000 in the preceding quarter, notwithstanding a 5% fall in the average realised price per ounce of gold sold.
The strong operating performance is a testament to the hard work of the management and employees at Blanket and shows the benefits of Caledonia-s recent investments in the Blanket Mine.
Caledonia and Blanket have made good progress on implementing indigenisation at Blanket Mine. All of the transaction documents have been signed; we await only the final approval from the Reserve Bank of Zimbabwe so that all of the transactions can become unconditional. Once indigenisation has been fully implemented, Blanket, as a profitable and cash-generative gold producer, will be well-positioned to take advantage of opportunities that exist for further growth.
Work at the Nama base metals project in Zambia has continued and our ongoing drilling programme has identified a substantial new copper-bearing mineralised zone. Further work has already commenced to identify the scale of this body. Caledonia has sufficient cash resources on hand to continue this work as quickly as possible.“
Caution Regarding Forward Looking Statements:
Information included in this release constitutes forward-looking statements. There can be no assurance that future exploration will identify mineralisation that will prove to be economic, that anticipated metallurgical recoveries will be achieved, that future evaluation work will confirm the viability of deposits that may be identified or that required regulatory approvals will be obtained.
Caledonia management will host a conference call starting at 10.00 (EDT), 15.00 (GMT+1) on August 15, 2012. Please dial-in 10 minutes beforehand and quote Caledonia as the conference call password.
Canadian Toll-free Number(i): + 1 800 608 0547
USA Toll-free Number(i): + 1 866 966 5335
UK Toll-free Number(i): +44 (0)808 109 0700
International Access Number: +44 (0)20 3003 2666
(i)If you are calling from a mobile phone your provider may charge you when connected to the toll-free numbers.
Further information regarding Caledonia-s exploration activities and operations along with its latest financials and Management Discussion and Analysis may be found at .
Contacts: Caledonia Mining Corporation Mark Learmonth + 27 11 447 2499
Canaccord Genuity Limited John Prior / Sebastian Jones + 44 20 7523 8350
Newgate Threadneedle Beth Harris / Josh Royston +44 20 7653 9850
CHF Investor Relations Stephanie Fitzgerald +1 416 868 1079 x 222
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