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[NYBob]

China refines its role in global gold market Feb 27th, 2012 -
08:35 by News 26-Feb (LA Times) —

A bit player only a decade ago, China has emerged as one of
the most important forces in the global gold market,
helping fuel the rising value of the precious metal.

Already the world’s largest producer — it overtook South Africa in 2007 —
China is now bedecking itself in bling.

It’s on track to become the globe’s largest consumer of gold
as early as this year, knocking off India — whose elaborate
wedding dowries kept it on top for years.

Some of China’s gold is going to its central bank as
the government quietly boosts reserves.

But the biggest driver is Chinese consumers.
They’re snapping up jewelry, coins and bars as a hedge
against inflation and to flaunt their rising wealth.

…Chinese demand reached nearly 770 metric tons last year,
up 20% from the year before, according to the World Gold
Council in London.

Desire for the yellow metal is so strong that China is buying
record amounts from abroad because its mines can’t keep pace.

China imported more gold than India in the fourth quarter of 2011.

http://www.latimes.com/business/la-fi-china-gold-20120227,0,5890215,full.story

China's government is suspected of quietly stockpiling more gold
to diversify its $3.2-trillion holdings of foreign reserves
and reduce its reliance on the U.S. dollar.

China rarely discloses its purchases. But it's assumed the
central bank holds a little more than 1,000 metric tons of gold
— still a small fraction of government holdings in
the U.S. and Eurozone.

Add in strong demand from gold-crazy consumers and "it's safe to
say demand still has a long way to go in China," said Clark
at Casey Research.

That's created a huge opportunity for retailers. Hong Kong's Chow Tai Fook plans to open 2,000 stores in China. The luxury brand already boasts revenue greater than Tiffany & Co. and raised $2 billion in an initial stock offering in Hong Kong in December.

But no gold merchant is better known in Beijing than Caishikou,
whose core customers are working-class Chinese.

Formerly a traditional department store selling clothes and
other goods, Caishikou now specializes in gold.
It sells a dazzling array of ornaments and jewelry at prices
that range from $63 chains to an elaborately detailed $135,000
dragon encased in glass. Everything is 24 karat,
a prerequisite for Chinese buyers.

Fighting her way through the aisles recently was Li Jinfeng,
a 45-year-old chicken farmer who had traveled from neighboring
Hebei province to buy jewelry for her daughter's dowry.
Business has been good, and Li didn't think twice about
tapping her savings.

"In the old days, only the rich people in my village could have
gold," said Li, whose pierced ears were adorned with
flower-shaped gold earrings.

Nearby, Li Lei, a 49-year-old retiree, was picking out a pair
of bright gold rings to give her parents on their
50th wedding anniversary.

"I feel obliged to buy something nice for them," Li said.
"Money may lose its value, but gold will not."

Caledonia signs Memorandum of Understanding with the Government
of Zimbabwe relating to the Indigenisation of
the Blanket Mine -




TORONTO, Feb. 20, 2012 /CNW Telbec/ -

Caledonia Mining Corporation -
("Caledonia") (TSX: CAL) (NASDAQ-OTCQX: CALVF) (AIM: CMCL)
announces it has signed a Memorandum of Understanding ("MoU")
with the Minister of Youth, Development, Indigenisation and
Empowerment of the Government of Zimbabwe (the "Government
of Zimbabwe") pursuant to which Caledonia has agreed to sell
51% of the Blanket Mine in Zimbabwe ("Blanket") to Indigenous
Zimbabweans for a paid transactional value of
US$30.09 million on the following basis:

16% will be sold to the National Indigenisation and Economic
Empowerment Fund;
10% will be sold to a Management and Employee Trust for the
benefit of the present and future managers and employees of
Blanket;
15% will be sold to identified Indigenous Zimbabweans;
and
10% will be donated to the Blanket Gwanda Community Trust.

Caledonia will also make a non-refundable donation of US$1.0
million to the Trust as soon as it has been established.
Caledonia will facilitate the vendor funding of these
transactions which will be repaid by way of future dividends
from Blanket.
Caledonia expects to redeploy the sale consideration in its
projects.

Caledonia has undertaken to complete the implementation of all
the components of the indigenisation transaction as soon
as possible.

The Government of Zimbabwe has agreed that implementation of
the terms of the MoU will constitute full compliance by
Blanket and Caledonia with the requirements of
the Indigenisation Act.

Further details of the MoU are subject to a confidentiality
agreement, and further announcements will be made when
appropriate.

Blanket's unaudited revenues and profit after tax for the year
to December 31, 2011 were US$56.6 million and US$19.2 million
respectively.

Mr Stefan Hayden, Caledonia's President and Chief Executive
officer said:
"I am pleased we have signed a MoU which, when fully
implemented, will represent the conclusion of the
indigenisation requirements for Blanket.

The transaction will be concluded for a value which is close
to Caledonia's current market capitalisation.

( Note
CALVF Total Current Market Cap: $55,060,421.--

[A subsidiary company;
Blanket Gold Mine 51% = US$30.09 million on the above
following basis:]
http://tmx.quotemedia.com/quote.php?qm_symbol=CAL ?)

This is a significant achievement in the current environment
and the transaction is neither an expropriation nor a partial
nationalisation.

Excellent progress has been made at Blanket in recent years:
gold production has increased by over 300% from 3,148oz in
the first quarter of 2010 to 10,533oz in the fourth quarter
of 2011 and cash operating costs fell by 27% from $804/oz
in the first quarter of 2010 to $583/oz in the third quarter
of 2011.

I hope that Blanket and Caledonia can now build on this track
record of success.
The indigenisation agreement, when fully implemented, will
introduce new shareholders to Blanket and I am confident
that their participation will enhance Blanket's further
growth and development.

We look forward to working with our new shareholders in
further progressing operations at Blanket for the benefit
of all stakeholders."

Caledonia Mining Corporation
Mark Learmonth
Tel: + 27 11 447 2499
[e-mail]

Renmark Financial Communications Inc.
John Boidman: [e-mail]
Nadia Marks: [e-mail]
Tel.: [phone] or [phone]
www.renmarkfinancial.com

Newgate Threadneedle Communications
Laurence Read, tel [phone]
Beth Harris, tel [phone]
Terry Garrett, tel [phone]

Collins Stewart Europe Limited
John Prior / Sebastian Jones
Tel: + 44 20 7523 8350

Collins Stewart LLC
Dan Mintz
Tel: [phone]
[e-mail]

Further information regarding Caledonia's exploration activities
and operations along with its latest financials and Management
Discussion and Analysis may be found at

http://www.caledoniamining.com

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72413720

http://www.caledoniamining.com/photos/4boxes.jpg

http://tmx.quotemedia.com/article.php?newsid=48600192&qm_symbol=CAL

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God Bless