Caledonia Mining Corporation provided an update on its strategic objective to increase gold production from current NI 43-101 compliant resources at the Blanket Mine in Zimbabwe ("Blanket") to approximately 76,000 ounces of gold per annum (oz pa) by 2016, a 90% increase on Blanket's targeted gold production for 2013 of approximately 40,000oz. As a fully indigenised entity, Blanket can now develop and implement its long term growth strategy. Blanket's newly re-constituted Board of Directors, which includes representatives of the Indigenous Zimbabwean shareholders, has approved a budget for 2013 and strategic plan which covers the period 2013 to 2017.

Blanket's highly efficient metallurgical plant has considerable surplus capacity: Blanket can process substantial volumes of additional ore with only a modest investment required to upgrade the existing crushing and milling circuits; Development of the existing ore resources above and below the current lowest mining level (750m) at Blanket has started and is planned to produce an additional 36,000oz pa of gold by 2016; Increased production is also expected to come from the first three of Blanket's portfolio of 18 satellite properties which are expected to commence production in fourth quarter of 2013. The eventual rate of production from these properties will be determined by the success of on-going exploration and mining development work. Production from these properties has not been included in the 76,000oz gold target as the resources are undefined at present; Blanket's total capital investment between 2013 and 2017 is anticipated to be approximately $37 million; Subject to achieving successful exploration results at Blanket below 750m and the sequential development of Blanket's remaining satellite properties a longer term potential exists for further increases in gold production.