Caledonia Min Regulatory News (CMCL)

17 Jan 2007 14:05

Caledonia Mining Corporation17 January 2007 CALEDONIA MINING CORPORATION UPDATE JANUARY 2007 Toronto, Ontario - Wednesday January 17, 2007: Caledonia Mining Corporation("Caledonia") (TSX:CAL, NASDAQ-OTCBB: CALVF and AIM:CMCL) wishes to adviseshareholders that at a meeting of the Board of Directors it was decided that theBarbrook Mine in South Africa would remain on care and maintenance and would notre-open after the illegal industrial action that was announced in Caledonia'spress release on 10 November, 2006. A claim for R7.5 million (+/- C$1.23 million) has been lodged against the labourbroker whose employees caused the damage to the Barbrook Mine. The Board also mandated management to engage ABSA Capital to act as financialadvisor to Caledonia in negotiations with potential purchasers for both theBarbrook Mine and the Eersteling Gold Mine which has been on care andmaintenance since 1997. The sale of these two mines will enable management'sfocus to be concentrated primarily on the Blanket Mine in Zimbabwe and the NamaCobalt project in Zambia. The Rooipoort Platinum Project, which is presently owned by Eersteling, does notform part of the Eersteling assets being considered for sale, and Caledonia willcontinue to proceed with the further development of this asset. Caledonia expects to report an operating profit in the fourth quarter 2006. The Blanket Mine is now Caledonia's only gold producer and operations at Blanketcontinue on target. The Blanket Mine shaft expansion to increase production to40,000 oz per year has been delayed by a shortage of foreign exchange inZimbabwe. Completion is now projected for the third quarter 2007. The independent consulting company preparing the Nama NI 43-101 report hasindicated that it will now have the report completed by mid February 2007.Caledonia confirms that it has signed Letters of Intent ("LOI") with refineriesand companies regarding their long term purchase of cobalt production from Nama,and discussions are underway with other interested refiners. Once the furthermetallurgical and process test work currently underway has been completed,Caledonia will proceed to negotiate and finalise the long term purchasecontracts envisaged in the LOI's. For more information, please contact: Stefan Hayden Alex Buck or Nick BiasPresident & CEO, Caledonia Mining Corporation buck-biasTel: +27 11 447 2499 Tel: +44 7932 740 452 Further information regarding Caledonia's exploration activities and operationsalong with its latest financials may be found at www.caledoniamining.com. Certain statements included herein are "forward-looking statements". Managementcautions that forward-looking statements are not guarantees and that actualresult could differ materially from those expressed or implied in theforward-looking statements. Important factors that could cause the actualresults of operations, exploration or development programs, or the financialcondition of the Company, to differ include, but are not necessarily limited to,the risks and uncertainties discussed in documents filed by the Company with thevarious regulatory authorities having jurisdiction. This information is provided by RNS The company news service from the London Stock Exchange