Caledonia Mining Corporation (TSE:CAL)

[NYBob]

Caledonia Mining (CALVF:NASDAQ, LON:CMCL, TSE:CAL,), which released sparkling
second quarter/first half results this morning, is worth
15 pence (C$0.23) a share, according to company
research boutique Edison.

http://www.proactiveinvestors.co.uk/companies/news/31882/caledonia-mining-is-worth-15-pence-a-share-according-to-edison-31882.html

Gold production in Q2 was 141 percent higher than the 3,408 ounces of gold produced in the second quarter of 2010.

Higher gold prices underpinned the performance, with the average
price per ounce sold during the quarter coming in at US$1,512
compared to US$1,192 in the second quarter of last year.

Gross profit before depreciation, amortisation and administrative
expenses totalled C$6.23 million, over 300 percent higher
than
the $1.53 million achieved in the second quarter of 2010.

Net profit before tax totalled C$3.84 million,
more than 800 percent higher than the C$413,000 achieved last time.

On a further encouraging note, cash operating costs at
Blanket during the quarter were US$585 per ounce of gold
produced, compared to US$648 per ounce in the first quarter
of 2011 and US$816 per ounce in the second quarter of 2010.
In a note, Edison said that its valuation of C$0.23 per share
was based on valuing Blanket at around 40,000 ounces of gold per
annum production rate for 10 years from 2012.

But it added: "With much of the detail surrounding the proposed
policy of indigenisation still unknown, we also provide a
second scenario whereby 51 percent is relinquished by 2015 to
an indigenisation partner (for zero consideration) and
Caledonia also undertakes a programme of capital expenditures
to expand production to around 70,000 ounces per annum."

"On this basis we value Blanket at C$0.28," it said.

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