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Friday, 08/17/2012 8:37:32 PM

Friday, August 17, 2012 8:37:32 PM

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Caledonia's Nama Base Metal Project, Zambia: Project Update
TORONTO, ONTARIO--(Marketwire - Aug. 9, 2012) -

Caledonia Mining Corporation
(the "Company") (TSX:CAL)(OTCQX:CALVF)(AIM:CMCL) is pleased
to provide an update on the progress at its
Nama Base Metal Project in Zambia.

The first phase of the 2012 drilling programme at
the Nama base metals project in Zambia - which was described in
a News Release dated March 12, 2012 -
commenced in March 2012 on
the Konkola East target area.

This phase comprised six holes and approximately 2,400 metres of
diamond drilling and had the objective of finding an upward
extension, closer to surface of the mineralised zone identified
in the 2011 drilling programme.

This drilling programme has now been extended into Phase 2 and
a total of 12 holes and approximately 4,970 metres of
drilling have been completed.

13 of the 18 holes drilled intersected
meaningful mineralisation.

The identified zone was intersected at depths ranging from
80 metres to 580 metres below surface and
the distance between the drill holes was between 100 metres and
500 metres.
The results from the drilling completed to date confirm the
existence of a mineralised zone which has the following

estimated weighted average copper grade of samples of 0.52%;
an estimated mineralised thickness of 10 to 27 metres;
the mineralisation extends from surface to a depth of
at least 580 metres;
a strike length of at least 1,300 metres and
a dip extent of 900 metres; and
this mineralised zone remains open at depth and to the west.

Further work, which is estimated to entail 10 holes and
approximately 2,100 metres of drilling, has already commenced
with the objectives of identifying a possible westerly
extension to the mineralised zone and improving the confidence
level of the resource data.
This work will take approximately five months to complete,
subject to the onset of rains in the last two months of the

Dr. Pearton, BSc. Eng. (Mining Geology), PhD (Geology), and
the Fellow of the Geological Society of South Africa,
is Caledonia's VP Exploration and its "Qualified Person"
for the Nama project and has reviewed the information in
this update.

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.

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

Phase 1 programme results.
The costs of these drilling programmes will be fully funded
from current cash resources.

Commenting on these exploration results, Stefan Hayden,
Caledonia's Chief Executive Officer and President said:
"The 2011 drilling programme at Nama identified a new and very
exciting aspect to Nama.

What we have found differs markedly in mineralisation style to
other properties in the region in that the zone we have
identified occurs in an atypical Copperbelt setting and
occurs in rocks overlying the Ore Shale.

This zone of mineralisation occurs at relatively shallow depth
relative to the depth of the Ore Shale in the area and possibly
extends to surface.

A sufficiently large, near-surface resource depth may therefore
provide the basis for a future open-pit mining operation.

"The 2012 exploration programme will commence as soon as the rains and ground condition allow during the second quarter. The results should allow us to confirm and further refine our model of Nama's geology and copper resources potential. Caledonia has sufficient cash to complete the 2012 exploration programme and intends to manage its cash resources so that it can undertake further work at Nama without raising new equity."

Background to the Nama Project

Caledonia holds four, contiguous large scale mining licences
covering approximately 800 square kilometres on
the Zambian Copperbelt.

The northern boundary of Caledonia's licenced area is the
DRC border and the eastern boundary abuts the licence area
that is held by a joint venture between Vale and
African Rainbow Minerals where a new copper mine is
currently under construction.

Prior to the 2011 programme, exploration activities had defined
three main styles of mineralization in the Nama Licence area:

a) "A-type" cobalt oxide mineralisation;

b) "D-type' iron oxide bodies which are mostly enriched in Cobalt; and

c) Copper dominated ore shale hosted copper-cobalt
mineralisation, commonly observed elsewhere in
the Copperbelt and which is being exploited by neighbouring
mines to the east and south of the Nama Licence Areas.

NAMA = its huge, very rich and massive copper resource smile

God Bless

My opinions are my own and and DD I post should be confirmed as unbiased

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