Caledonia Mining Corporation (CMCL)

[NYBob]

Caledonia Mining Announces the Commissioning of the No. 4 Shaft Project
TORONTO, ONTARIO, Oct. 21, 2010 (Marketwire) --

Caledonia Mining Corporation
("Caledonia") (TSX:CAL)(OTCBB:CALVF)(AIM:CMCL) is pleased
to announce the commissioning of the underground installations
relating to the No. 4 Shaft Project at
the Blanket Gold Mine
in Zimbabwe ("Blanket").

The underground crushing station and automated shaft-bottom loading system have been successfully commissioned.
The commissioning of the shaft-bottom loading system removes the need to multiple-handle ore prior to it being hauled to surface, with a resultant improvement in efficiency and reduction in costs.

Blanket has now commenced the ramp-up in production to a target
rate of 1,000 tonnes per day which is expected to yield
approximately 40,000 ounces of gold per annum.

This ramp-up is planned to be completed by the end of
December 2010, but gold production will remain subject to
the availability of sufficient electrical power which is
essential if the metallurgical plant is to process
this volume of ore.

Blanket has already installed and commissioned the additional
rod-milling capacity to handle production at 1,000 tonnes per day.

In order to overcome the problem of power interruptions Blanket intends to install three more 2,500 kVA diesel-powered standby generators before the end of the year which will allow all underground and surface operations to continue during interruptions of the electricity supply.

Commenting on the culmination of this phase of the Project, Stefan Hayden, President and CEO, said "This is a very important milestone in the development of the Blanket Mine which was designed and completed in-house and within budget, thanks to the excellent work by the management teams and staff at both Caledonia and Blanket. I now look forward to Blanket achieving its target rate of production of 40,000 ounces of gold per annum before the end of the year."

Further information regarding Caledonia's exploration activities and operations along with its latest financials may be found at www.caledoniamining.com.

Caledonia Mining [phone] [e-mail]
www.caledoniamining.com
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