Mr. Mark Learmonth reports

EXERCISE OF OPTIONS AND DIRECTORS' DEALINGS

Caledonia Mining Corp. received notice on April 14, 2012, that, on the same day, directors of the company exercised options over a total of 5.5 million ordinary shares of no par value in the company in accordance with the rules of the company's share option plan.

                                                                
                                                                Number of      
                  Number of                                      ordinary      % of
                    options                        Exercise   shares held     share
Director          exercised      Date of grant        price  postexercise   capital

S.E. Hayden       4,000,000     April 24, 2002    $    0.07     4,380,000    0.866%
F.C. Harvey       1,000,000     April 24, 2002    $    0.07     1,204,300    0.238%
C.R. Jonsson        500,000     April 24, 2002    $    0.07       559,469    0.111%
Total             5,500,000

The proceeds received, totalling $385,000, will be added to the company's operating capital. Pursuant to the exercise of these options, the company has made application to the London Stock Exchange for 5.5 million new ordinary shares to be admitted to trading on AIM. It is expected that admission will become effective on April 25, 2012.

Following this notification, the company has 506,049,303 ordinary shares in issue.