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CALEDONIA MINING CORP ORD
Symbol U : CALV
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Caledonia Mining Corporation: Q1 2013 Results and Confirmation of Annual General Meeting Date

2013-05-13 02:00 ET - News Release

TORONTO, ONTARIO -- (Marketwired) -- 05/13/13

Caledonia Mining Corporation ("Caledonia" or the "Company") (TSX:CAL)(OTCQX:CALVD)(AIM:CMCL) is pleased to announce its operating and financial results for the first quarter 2013 ("Q1" or the "Quarter"). All results are reported in Canadian dollars unless otherwise indicated. Caledonia owns 49% of the Blanket Mine in Zimbabwe. Operational and financial information set out below is on a 100% basis unless indicated otherwise.

Operating Highlights - Blanket Mine, Zimbabwe


--  Gold produced in Q1 was 10,472 ounces (Q4 2012 11,821 ounces; Q1 2012
    9,164 ounces) and was ahead of the planned target. 
    
    --  Gold production in the Quarter was restrained by the short
        accounting period for the Quarter which had only 84 working days up
        to cut-off on 26th March (due to the early incidence of Easter).  
        
--  Gold production for the second quarter has started well: production in
    April 2013 was approximately 4,385 ounces. Management believes that
    Blanket is on course to deliver its targeted production of 40,000 ounces
    for 2013.  
    
--  Blanket's cash operating cost per ounce of gold produced in the Quarter
    increased to US$669 from US$605 in the preceding quarter. 
    
    --  The overall cash cost of production in the Quarter fell to U$$7.0
        million compared to US$7.2 million the preceding quarter but the
        cash cost per ounce of gold produced increased due to the lower gold
        production during the Quarter. 

Financial Highlights


--  Gold sales during the Quarter were 11,964 ounces at an average sales
    price of $1,601 per ounce of gold. 
    
--  Gross Profit (i.e. after depreciation and amortization but before
    administrative expenses) was $9.0 million (Q4 2012, $9.3 million; Q1
    2012, $9.0 million). 
    
--  Net profit after tax for the Quarter attributable to Caledonia
    shareholders was $4.6 million (Q4 2012, $3.4 million; Q1 2012, $7.1
    million). 
    
    --  Net profit for the Quarter was after non-recurring tax charges
        totalling approximately $2 million. 
        
--  Basic earnings per share for the Quarter were 0.9 cents per share, (Q4
    2012, 0.6 cents; Q1 2012, 1.4 cents). The earnings per share numbers do
    not reflect the share consolidation which took place after the end of
    the Quarter. 
    
--  At March 31, 2013 Caledonia had cash and cash equivalents of $25.2
    million (December 31, 2012 $27.9 million; March 31, 2012 $16. 3
    million). 
    
    --  The reduction in net cash was due to the payment by Caledonia of its
        initial dividend of $2.5 million, working capital movements, high
        tax payments and capital investment. 

Exploration Highlights


--  The deep level exploration drilling at the Blanket Mine below 750m Level
    has commenced. The first exploration hole into the Blanket Ore Body was
    completed and intersected mineralisation with a grade of 3.57g/t over
    4.70m at a depth of 940 meters. A second hole is now in progress. An
    additional drilling machine is being refurbished and will be
    commissioned shortly.  
    
--  Blanket has appointed four new exploration geologists to increase the
    capacity of its exploration team.  
    
--  Exploration at Blanket's satellite projects has continued. 
    
    --  At the GG Project the shaft sinking has reached a depth of 100m
        below surface. Diamond drilling on the 60m level continued in the
        Quarter and of the five holes drilled so far, four have intersected
        mineralisation. Further drilling and tunnel development is in
        progress to allow for a better understanding of the geometry of the
        identified zones. A total of 3,000m of diamond drilling is planned
        during 2013.  
        
    --  At Mascot, underground development towards the North Parallel Zone
        appears to be entering the identified mineralised zone. Further
        development work will continue once the rock handling systems have
        been installed to allow payable development material to be hoisted
        to surface. Development towards the South Zone also continues. If
        the gold grades of the exposed mineralised zones prove to be
        economic, ore from Mascot would be delivered to the main Blanket
        plant from late 2013.  
        
--  At the Nama Copper Project further diamond drilling is being carried out
    on additional zones of mineralisation that have been identified to the
    immediate west and south of the mineralised zone that could extend the
    copper resource at depth and define an additional zone of copper
    enrichment near surface. 
    
--  Caledonia's OTCQX ticker changed temporarily from CALVF to CALVD
    following the implementation of the share consolidation on 12 April
    2013. It is anticipated that the ticker will revert to CALVF shortly. 

Commenting on the 2013 Q1 results, Stefan Hayden, Caledonia President and Chief Executive Officer said: "The first Quarter of 2013 represented a further quarter of solid performance; with the daily production rate ahead of expectations and a resulting Gross Profit of $9.0 million. The increase in cost per ounce was largely due to lower production, which means that Blanket's fixed costs were spread over fewer ounces of gold. As production increases from 2014 onwards, I expect that our average cost per ounce of gold produced should reduce somewhat.

"Supported by the Company's strong cash position, development and exploration activity at Blanket continues at pace and we are moving towards achieving our targeted increase in production. Production is expected to increase to approximately 48,000 ounces in 2014 with further increases to the target of 76,000 ounces of gold from 2016 onwards.

"Exploration at Blanket's satellite projects also continues and we are encouraged by the results evaluated so far. Exploration work at GG continues to identify mineralisation and by the end of 2013 we hope to start transporting stockpiled ore from Mascot to Blanket for processing.

"As a low-cost producer with a robust balance sheet, Caledonia is well-positioned to continue to implement its growth strategy, notwithstanding the current volatility in the gold price."

The full Report & Accounts, including the Management Discussion and Analysis for the quarter ended 31 March, 2013 are available from the Company's website www.caledoniamining.com and from SEDAR.

Annual General Meeting

The Notice of Annual Meeting, Management Information Circular, Proxy Form, Voting Instruction Form and the Annual Report to Shareholders have been mailed to the registered shareholders of the Company. Shareholders of record on April 19, 2013 will be entitled to receive notice of the meeting and to vote at the Annual Meeting. These documents are also available on the Company's website at www.caledoniamining.com. The Annual Meeting will be held at the office of the Company's Toronto Solicitors (Borden Ladner Gervais LLP) 44th Floor, Scotia Plaza, 40 King Street West, Toronto, Ontario, on Friday, May 31, 2013 commencing at 10:00 a.m.


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Condensed Consolidated Statement of Comprehensive Income (unaudited)        
                                                                            
(in thousands of Canadian dollars except per share amounts)                 
                                                       Three months ended   
                                                            March 31        
                                                           2013        2012 
                                                              $           $ 
Revenue                                                  19,218      17,503 
Royalty                                                  (1,349)     (1,227)
Production costs                                         (8,019)     (6,444)
Depreciation                                               (803)       (836)
                                                     -----------------------
Gross profit                                              9,047       8,996 
Administrative Expenses                                  (1,175)       (801)
Foreign exchange loss                                         -         (18)
                                                     -----------------------
Results from operating activities                         7,872       8,177 
Net finance income/(expense)                                (64)        (46)
                                                     -----------------------
Profit before income tax                                  7,808       8,131 
Income Tax expense                                       (2,278)     (1,020)
                                                     -----------------------
Profit for the period                                     5,530       7,111 
Loss on foreign currency translation                        827        (815)
                                                     -----------------------
Total comprehensive income for the period                 6,357       6,296 
                                                     -----------------------
                                                                            
Earnings per share (cents)                                                  
  Basic                                                     0.9         1.4 
  Diluted                                                   0.9         1.4 
                                                                            
Weighted average number of common shares outstanding                        
 (thousands) at March 31                                                    
  Basic                                                 516,419     500,169 
  Diluted                                               520,945     542,709 
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Condensed Consolidated statements of Financial Position (unaudited)         
(In thousands of Canadian dollars)         As at   March 31,    December 31,
                                                        2013            2012
                                                           $               $
Total non-current assets                              37,950          36,533
Inventories                                            4,893           5,508
Prepayments                                              146             126
Trade and other receivables                            5,206           1,718
Cash and cash equivalents                             25,189          27,942
                                                ----------------------------
Total assets                                          73,384          71,827
                                                ----------------------------
                                                ----------------------------
Total non-current liabilities                          6,953           6,928
Trade and other payables                               5,456           5,775
Zimbabwe advance dividend accrual                      1,018           1,987
Income taxes payable                                     633           1,518
                                                ----------------------------
Total liabilities                                     14,060          16,208
Capital and reserves                                  59,324          55,619
                                                ----------------------------
Total equity and liabilities                          73,384          71,827
------------------------------------------------============================
                                                                            
                                                                            
----------------------------------------------------------------------------
Condensed Consolidated Statement of Cash Flows (unaudited)                  
(In thousands of Canadian dollars)                                          
                                                     For the 3 months ended 
                                                            March 31        
                                                           2013        2012 
                                                              $           $ 
Cash flows from operating activities                                        
Profit for the period                                     5,530       7,111 
Adjustments to reconcile net cash from operations         3,117       1,535 
Changes in non-cash working capital                      (3,212)        405 
Tax paid                                                 (3,163)       (875)
Net finance income/(expense)                                (64)        (46)
                                                     -----------------------
Net cash from operating activities                        2,208       8,130 
                                                                            
Cash flows from investing activities                                        
Property, plant and equipment additions                  (1,340)     (1,098)
                                                                            
Cash flows from financing activities                                        
Bank overdraft increase/(decrease)                            -        (430)
Dividend paid                                            (2,834)          - 
Advance dividend paid                                      (969)          - 
Proceeds from the exercise of options                       182             
                                                     -----------------------
Net cash used in financing activities                    (3,371)       (430)
Net increase/(decrease) in cash and cash equivalents     (2,753)      6,602 
Cash and cash equivalents at the beginning of the                           
 period                                                  27,942       9,686 
                                                     -----------------------
Cash and cash equivalents at the end of the period       25,189      16,288 
----------------------------------------------------------------------------

Contacts:
Caledonia Mining Corporation
Mark Learmonth
+27 11 447 2499
marklearmonth@caledoniamining.com
www.caledoniamining.com

Newgate Threadneedle
Beth Harris/Adam Lloyd
+44 20 7653 9850

CHF Investor Relations
Jeremy Hill
+1 416 868 1079 x 238
jeremy@chfir.com

Numis
John Prior/Jamie Loughborough/James Black
+44 20 7260 1000

WH Ireland
Adrian Hadden/Nick Field
+44 20 7220 1751

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