Caledonia Mining Corporation (CMCL)

[NYBob]

Caledonia ramps up gold output -
Monday, 30 May 2011 11:27
www.financialgazette.co.zw
Staff Reporter.


Toronto-listed Caledo-nia Mining Corporation, which owns a gold
mining asset in Zimbabwe, Blanket Mine, had reported a gold
production increase of 17 percent to 7,322 ounces during
the first quarter of 2011, compared to 6,235 ounces
in the fourth quarter 2010 (Q1 2010: 3,129 ounces).

Gold production in April 2011 was 2,737 ounces.
The average cash cost per ounce of gold produced decreased
by 18 percent to US$648 compared to
the fourth quarter 2010
(Q1 2010: US$807).

Average achieved price per ounce of gold was US$1,397
(Q1 2010: US$1,1 07) and gross profit for the quarter -
before depreciation, amortisation and administrative expenses -
nearly doubled to US$5,248,000 compared
to US$2,815,000 in the fourth quarter 2010
(Q1 2010: US$449,000).

At March 31, 2011, the company had net cash
and cash equivalents of US$1,406,000
(December 31, 2010:US$398,000).

"During the quarter Cale-donia made considerable progress
in removing the remaining constraints to Blanket achieving
the targeted annual production rate.

The 2011 drilling program commenced in March 2011 at the Konkola
West area of the Nama base metals project in Zambia,"
the company reported.

Stefan Hayden, president and chief executive officer, said:
"I am very pleased to report a strong first quarter
performance for 2011.
The increased production coupled with the continued strength
in the gold price and a reduction in Blanket's cash cost
resulted in a substantial improvement in Caledonia's
profitability and cash generation.

"We have made significant progress during the current quarter
to address the remaining constraints which, once solved,
should enable us to reach our target of 10 000 ounces per
quarter.

A new ore pass was raise-bored and commissioned on May 13, 2011.
"The commissioning of the complete standby generating system
commenced on May 16, 2011 and is expected to be completed
by the end of May, after which Blanket will be able to maintain
full operations during any interruption to
the normal power supply.
I am confident that Blanket will achieve its targeted quarterly
production from the third quarter of 2011.

"The drilling programme at the Nama base metals project
in Zambia commenced in March 2011 to identify typical
copper-belt type mineralisation.
This drilling programme is expected to be completed by
the third quarter 2011."

Blanket mine is wholly owned and operated by Caledonia Mining
Corpo-ration, who acquired the mine from
Kinross Gold Corpor-ation with effect from April 2006.

Blanket mine is a well-established Zimbabwean gold mine,
which operates at a depth of approximately 800 metres below
surface and currently has a production capacity of 40 000 ounces
of gold per annum.
Blanket also holds significant brownfield exploration and
development projects both on the existing mine area and
on its satellite properties which are within trucking distance
of the Blanket metallurgical recovery plant.

The Blanket Mine is located in the south-west of Zimbabwe
approximately 15km west of Gwanda, the provincial capital
of Mata-beleland South.

Gwanda is 150 km south east of Bulawayo the country's
second largest city and 196 km northwest of the Beit Bridge
Border post with South Africa, and 560km from Harare,
Zimbabwe's capital city.

Access to the mine is by an all-weather tarred road from Gwanda,
which is linked from Beit Bridge to Bulawayo and Harare
by a national highway.

The mine is Caledonia's producing gold mining asset.

The group's other mining assets are a platinum project in
South Africa and cobalt and copper projects in Zam-bia.

http://www.financialgazette.co.zw/companies-a-markets/8397-caledonia-ramps-up-gold-output.html

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=63731500

http://www.caledoniamining.com/nam1.php

http://www.caledoniamining.com/blanket.php

http://www.caledoniamining.com/rooi1.php