3rd Quarter Results

Caledonia Mining Corporation
15 November 2006


                          Caledonia Mining Corporation

                            3rd Quarter Results 2006

Toronto, Ontario - November 14, 2006: Caledonia Mining Corporation ('Caledonia')
(TSX: CAL, NASDAQ-OTCBB: CALVF and AIM:CMCL) is pleased to announce its key
financial and operating results for the third quarter ended September 30, 2006.

Operational Highlights

Barbrook Gold Mine - South Africa

•    Gold production totaled 1,548 ounces during the quarter (Q3 2005:1,497 ounces).
•    Plant throughput rose steadily during July (13,292 tonnes) and August 
     (12,500 tonnes) until production was disrupted in September by a legal
     strike between contract labourers and the labour broker resulting in total of
     29,092 tonnes (Q3 2005: 20,451 tonnes) for the quarter.
•    Industrial action at the mine during October impacts on gold production, 
     with only 88 ounces produced, culminating in illegal activities which 
     severely damaged the offices and security buildings. The mine has now been
     placed on 'care and maintenance' until further notice, whilst a compensation
     claim is being pursued against the mine's labour broker.

Blanket Gold Mine - Zimbabwe

•    Gold production for the third quarter totaled 6,475 ounces.


Corporate/Financial

•    Consideration given for the Blanket Mine purchase was a payment of 
     US$1 million and the issue of 20,000,000 Caledonia shares to Kinross.
•    Completed a private placement in July 2006 and raised $2.160 million
     after expenses through the issue of 17,000,000 common shares and 17,000,000
     share purchase warrants.

For the quarter ended September 30, 2006 Caledonia recorded a net loss of $3.074
million ($0.007 per share) compared to a net loss of $2.564 million ($0.008 per
share) during the same period in 2005. The loss in 2006 results from ongoing
exploration costs, operations at Barbrook, and the normal administration
expenses during the quarter. Included in the loss for the quarter is an
unrealized foreign exchange loss of $1.659 million (profit of $125,000 in
quarter ended June 30, 2006 and a profit of $104,000 for the quarter ended March
30, 2006) of which Blanket Mine contributed a loss a $1.595 million due to the
devaluation of the Zimbabwe dollar in August 2006.

At an operating profit level, Caledonia recorded a profit of $1.524 million for
the period ended September 30, 2006 (loss of $1.309 million for the same period
in 2005) and a year to date operating loss of $1.982 million in 2006 (loss of $
4.004 million for the same period in 2005).

Reviewing the quarter, Stefan Hayden, President and CEO, said 'The group's gold
production for the quarter began well, with the Barbrook plant nearing the
planned throughput target of 15,000 tonnes a month and on target to match the
second quarter's production. However an industrial dispute between the contract
labourers and the labour broker impacted on Barbrook's production in September
and unfortunately continued into October. Furthermore the dispute resulted in
illegal activities in late October which led to the mine being placed on 'care
and maintenance' in November. We are, of course, pursuing a claim for
compensation against the labour broker.

The Blanket Mine in Zimbabwe has had a good quarter, with gold production up by
400 ounces and net sales of $4.538 million. The mine is on track to meet the
fourth quarter target. The expansion project, at shaft 4, is progressing and due
for completion in Q3 2007. This will almost double gold production to 40,000
ounces.

At the Nama cobalt deposit in Zambia, work is progressing well towards producing
a NI 43-101 statement on anomalies 'A', 'C' & 'D' which is expected to be
available during December 2006.'

Caledonia Management's Discussion and Analysis was published on November 14,
2006 and is available on the company's website: www.caledoniamining.com.

For more information, please contact:

Stefan Hayden                                     Alex Buck / Nick Bias
President and CEO, Caledonia Mining               buck-bias
Tel: [phone]                              Tel: [phone]

Further information regarding Caledonia's exploration activities and operations
along with its latest financials may be found at www.caledoniamining.com.

Certain statements included herein are 'forward-looking statements'.  Management
cautions that forward-looking statements are not guarantees and that actual
result could differ materially from those expressed or implied in the
forward-looking statements.  Important factors that could cause the actual
results of operations, exploration or development programs, or the financial
condition of the Company, to differ include, but are not necessarily limited to,
the risks and uncertainties discussed in documents filed by the Company with the
various regulatory authorities having jurisdiction.

                          CALEDONIA MINING CORPORATION
                  REPORT FOR QUARTER ENDED SEPTEMBER 30, 2006

HIGHLIGHTS FOR THE QUARTER ENDED SEPTEMBER 30, 2006 (Q3)


Barbrook Gold Mine - South Africa

•    Following the completion of the plant expansion in late January from
     a capacity of 6,000 tonnes per month to a projection of 15,000 tonnes per 
     month, plant throughput has increased steadily reaching 12,397 tonnes in 
     June, 13,292 tonnes in July, 12,500 tonnes in August but only 3,300 tonnes 
     in September. Production was disrupted during September when contract 
     labourers embarked on a legal strike over a wage dispute with the labour 
     broker who supplies labour to the mine. As a result 29,092 tonnes (32,133 
     tonnes in quarter ended June 30th, 2006) were treated in the plant during 
     the quarter.
•    Gold production totaled 1,548 ounces (1,749 ounces in quarter ended June 
     30th 2006) during the quarter and only 88 ounces in October due to the
     industrial action at the mine.
•    In October workers embarked on illegal activities that resulted in severe 
     damage to the offices and security buildings at Barbrook. No damage was
     caused to the metallurgical plant or underground workings, the Barbrook
     operations have now been placed on 'care and maintenance'.


Blanket Gold Mine - Zimbabwe

•    Acquired a 100% interest in the Blanket Gold Mine in Zimbabwe from Kinross 
     Gold Corporation of Toronto with effect from 1 April 2006.
•    Gold production during the three months ending June 30, 2006 totaled
     6,045 ounces, 6,475 ounces were produced in the 3 months ended September 30,
     2006 and 2,109 ounces in October, 2006.


Corporate/Financial

•    Consideration given for the Blanket Mine purchase was a payment of
     US$1 million and the issue of 20,000,000 Caledonia shares.
•    Completed a private placement in July 2006 and raised $2,160,000 after 
     expenses through the issue of 17,000,000 common shares and 17,000,000
     share purchase warrants.

2006 OBJECTIVES

•    Subsequent to the industrial action at Barbrook Mine and the extent of the
     damaged caused to certain buildings a decision around the future of Barbrook
     Mine must be taken. On the assumption that Barbrook continues in operation:
       - Improve safety awareness at Barbrook Mine and further develop necessary 
         programs to ensure a safe operation.
       - Optimise gold production at Barbrook Mine in South Africa by treating
         at least 15,000 tonnes per month.
       - Continue developing additional reserves/resources at Barbrook Mine.
       - Complete metallurgical studies to confirm viability of economic gold
         recovery from Daylight & Victory zones at Barbrook Mine.
•    Continue with negotiations to conclude agreements with cobalt refiners to 
     purchase cobalt concentrate produced at Nama and/or form strategic
     alliances to achieve this objective.
•    Seek a joint-venture partner to commence an exploration program at the 
     Kadola copper/cobalt and the Eureka copper/gold properties in Zambia.
•    Further explore the polymetallic resource on the Rooipoort and Grasvally 
     properties which form the Rooipoort PGE/Ni/Cu Exploration Project in
     South Africa.
•    Increase the land holdings around the Rooipoort Exploration property.
•    Drill identified extensions to the known ore zones on the Eersteling and 
     Zandrivier Mining Licence areas.
•    Pursue possible acquisitions and/or strategic partnerships to expand 
     Caledonia's portfolio of properties.
•    Expand the Board of Directors to address ongoing Corporate Governance 
     requirements.
•    Implement succession plans for senior executive and operational staff.
•    Strengthen the Investor Relations and Public Relations functions within 
     Caledonia.
•    Conclude necessary agreements to satisfy the South African Black Economic 
     Empowerment ('BEE') requirements.
•    Arrange necessary financing to support the activities required to meet 
     these objectives.
•    Expedite the Number 4 shaft expansion project at the newly acquired Blanket
     Gold Mine to increase gold production to 50,000 ounces per annum.

PRESIDENT'S MESSAGE

The acquisition of the Blanket Gold Mine in Zimbabwe is a significant step
towards Caledonia's goal of developing the asset base into a significant
diversified international mining company. Gold has been mined in the Blanket
area for close to 100 years. As of 2005 Blanket's reported historic life-time
gold production exceeded one million ounces. With the reported proven and
probable ore reserves exceeding 3 million tonnes Blanket should continue to
produce gold for many years to come. I am delighted to welcome the Blanket
management team and staff to Caledonia where I am sure they will make a
significant positive impact on Caledonia's future revenue.

The Number 4 shaft expansion project at Blanket is currently well underway and
should be completed by third quarter 2007 (originally second quarter 2007) due
to delays beyond Blanket's control. The new shaft should allow Blanket to
progressively increase gold production to 40,000 ounces per year. The latest
monetary policy in Zimbabwe allows mines to retain 67.5% of their foreign
exchange proceeds (increased from 40%) - which will have a positive impact on
Blanket together with the cost cutting program which is rapidly being
implemented. The metallurgical tests proposed by Caledonia have been completed
and the circuit changes are being finalized. These should result in increased
gold recoveries, lower reagent consumption and costs.

The accompanying Highlights and 3rd quarter MD&A contain information with
respect to the Barbrook Mine. Further samples from the 'A' anomally on the Nama
property in Zambia were taken and shipped to China for confirmatory testwork.
Samples where also sent for furnance testing in South Africa. Negotiations
regarding long term cobalt sales agreements with a number of large cobalt
refiners are advancing. Technical and economic studies related to the production
of saleable cobalt carbonates and hydroxides at Nama are presently underway in
South Africa and China.

S. E. Hayden
President and Chief Executive Officer

CALEDONIA MINING CORPORATION                                 November 14th, 2006
Management's Discussion and Analysis

This Interim MD & A covers the Company's third fiscal quarter from July 1, 2006
to September 30, 2006 - and the period thereafter to November 6, 2006. It is to
be read in conjunction with the Company's Annual Management Discussion and
Analysis for the fiscal year ended December 31, 2005, the audited financial
statements of the Company prepared to December 31, 2005, the Company's 2005
Annual Report and with the Interim MD&As and unaudited financial statements
contained in the Interim Quartely Reports for the first and second quarters. All
of these documents have been filed on SEDAR and are available at www.sedar.com
or on the Corporation's website at www.caledoniamining.com.

Note that all currency references in this document are to Canadian dollars.

1. OPERATIONAL REVIEW, OVERALL PERFORMANCE AND RESULTS OF OPERATIONS

(a) Barbrook Mine South Africa

Barbrook Mine is temporarily on 'care and maintenance'.

In early August metallurgical testing by Mintek of South Africa identified
operating parameters which successfully reduced the previously unexplained gold
losses in the oxidation circuit in the laboratory. Efforts were commenced to
modify the plant to duplicate these parameters in the full scale operation, but
before these changes could be fully tested during continuous operations the
contractor's labour commenced a legal strike on August 28th . Some replacement
workers were supplied by the contractor but due to intimidation there was a high
turnover, which when coupled with necessary safety training, adversely affected
productivity.

The strike was terminated on October 13th and employees were requested to return
to work on October 16th. However, following a re-organisation and reduction of
the workforce there were significant disruptions on site and several surface
buildings and facilities were destroyed. All facilities at Barbrook are
uninsured and a claim has been lodged against the labour contractor in terms of
the contract with them.

The reduction in Gold Sales Revenue for the quarter compared with that in the
second quarter is due to the lack of production in September resulting from the
labour strike.

Underground work continued in the Taylors, French Bob and Twalas zones to
develop additional resources in these zones, but was stopped in late August when
limited manpower was redeployed in production areas.

                    Barbrook Mine - 2006 Production Results

                          1st Qtr        2nd Qtr        3rd Qtr        October
                          1 Jan -        1 Apr -        1 Jul -        1 Oct - 
                          31 Mar         30 Jun         30 Sept        31 Oct

Ore Mined    Tonnes        27,565        29,886         30,134             0
Development
Advance      Meters           795           737            378             0
Ore Milled   Tonnes        19,357        32,133         29,092         1,700
Grade        
Milled       g/t             3.78          3.37           3.79          3.20
Gold         
Recovered    Ounces           902         1,749          1,548            88

The table below summarizes the Reserve and Resource data as at September 30,
2006.

                                MINERAL RESERVES

Classification                 Mineral        Grade       Content       Content
                              (Tonnes)         Au            kg         Ounces
Proven Ore                     256,500        5.88         1,508        48,490
Probable Ore                    53,000        6.11           324        10,410
TOTAL PROVEN & PROBABLE ORE    309,500        5.92         1,832        58,900

                              MINERAL RESOURCES *

Measured                       495,000        2.96         1,465        47,100
Indicated                    1,196,000        5.29         6,330       203,400
Inferred                     2,400,000        5.91            **            **
* The mineral resources figures are not included in the mineral reserve figures.
** In keeping with the requirements of NI 43-101 Inferred Resources are reported
without estimates of metal quantities.

Dr Trevor Pearton, PhD, FGSSA. Technical Director of Barbrook, is Caledonia's 
'Qualified Person' with respect to the Barbrook Mine property for the purposes 
of National Instrument 43-101 and has approved this property description. The 
above Reserve and Resource data is compiled using Caledonia's internal standards
and National Instrument 43-101 compliant Reserve and Resource data will be made
available as soon as practicable.

(b) Blanket Mine Zimbabwe

In July 2006 Caledonia completed the purchase of the Blanket Gold Mine in
Zimbabwe - the purchase being effective as of April 1, 2006. The Blanket mine is
an underground gold mine which currently mines and processes approximately 550
tonnes per day. Recent average gold production has been approximately 2,100
ounces per month.

A variety of mining methods are employed to suit the changing ore zones at
Blanket. Methods used include underhand stoping, shrinkage stoping and long-hole
stoping.

The ROM (run-of-mine underground ore) metallurgical process consists of three
stage crushing with a feed size of 350mm producing a final product of 80%
passing 8mm. This product is fed into an open circuit Rod mill at a rate of 24
metric tph. From the Rod mill the discharge combines with the regrind mill
product and is pumped to the Knelson Concentrators. Three different sized mills
operating in closed circuit with a hydro cyclone and two 30' CD Knelson
Concentrators comprise the regrind circuit. Knelson concentrates are further
treated on the Gemini table to produce a much cleaner concentrate, which is
calcined before smelting on-site.

Dewatering of the hydro cyclone overflow to 50% solids is undertaken before
feeding it into the CIL head tank. Six contact tanks make up the CIL.

Tailings from the CIL stream are pumped to the tailings dam with the effluent
recycled to the plant. These tailings are partially treated to reduce the free
cyanide levels before pumping to the tailings deposition area.

Production results for the Blanket Mine from April 1, 2006 - the effective date
of the acquisition - are given in the table below.

Blanket Mine - 2006 Production Results since the April 1, 2006 acquisition date
                     Information
                     only
                          1st Qtr        2nd Qtr        3rd Qtr       October

                         1 Jan - 31     1 Apr - 30     1 Jul - 30     1 Oct - 31
                             Mar            Jun           Sept           Oct
                                            Not
                                        Consolidated
Ore Mined
and        
Hoisted     Tonnes         54,100         50,700         52,146        15,713
Development
Advance     Meters            395            772            903           300
Ore         
Milled      Tonnes         47,800         51,500         53,375        17,789
Grade       
Milled      g/t              4.10           4.10           4.15          3.86
Gold        
Recovered   Ounces          5,653          6,045          6,475         2,109


As announced in June, a US$2.5 million project to complete the new #4 shaft and
increase the milling throughput to 1000 tpd and gold production to 40,000 ounces
per year is underway and is proposed to be completed during Q3 2007. The slyping
of the shaft from the 630 meter level to the 750 meter level, the blind sinking
to the 810 meter level, the establishment of the bin loading arrangements on 780
meter level, and the equipping of the shaft with steel ladders and platforms
from the 630 meter level to the 810 meter level have all been completed. The
mining of the ore and waste bins from 765 meter level to 750 meter level and the
crusher chamber are in progress.

The table below summarizes the Reserve and Resource data as at June 30, 2006.

                                MINERAL RESERVES
Classification                Mineral         Grade       Content      Content
                              (Tonnes)         Au           kg         Ounces
Proven Ore                    1,310,400       3.82         5,002       160,820
Probable Ore                  2,326,000       4.10         9,540       306,700
TOTAL PROVEN & PROBABLE ORE   3,636,400       4.00        14,542       467,500

                              MINERAL RESOURCES *
Indicated                       380,000       4.12         1,600        51,000
Inferred                      2,400,000       5.91            **            **
* The mineral resources figures are not included in the mineral reserve figures.
** In keeping with the requirements of NI 43-101 Inferred Resources are reported
without estimates of metal quantities.

A Report on the Blanket Mine, dated August 4th, 2006 as required by National
Instrument 43-101 was prepared by Applied Geology Services cc of South Africa.
Mr. David Grant, Pr.Sci.Nat. is the Independent Qualified Person responsible for
the report. The Technical Report has been filed on SEDAR and is available at
www.sedar.com or on the Corporation's website at www.caledoniamining.com. The
Reserve and Resource information above has been taken from that NI 43-101
compliant report.

(c) Nama Cobalt Project, Zambia

During the quarter work continued on the preparation of a NI 43-101 statement on
anomalies 'A', 'C' & 'D' which is expected to be available during December 2006.
A detailed geological interpretation has revealed a hitherto unknown geological
structure and has facilitated the interpretation of the mineralisation model and
likely areas of extension. A follow-up drilling program is planned for the first
half of 2007 dependant on the access to the sites as permitted by the rainy
season.

Follow-up geochemical work is being carried out across the Nama 'A' anomaly in
order to test continuity of potentially mineralized zones in the lower soil
profile.

The results of the further two stage Wet High Intensity Magnetic Separation
(WHIMS) test work show cobalt recoveries of over 70% and the amenability of the
cobalt mineralization to further concentration by flotation has been confirmed,
despite previous test work findings.

Further samples were collected from the same bulk sample site and screened to
+5mm and -5mm fraction sizes on site. The samples were then shipped for
metallurgical testing in South Africa and in China. The weight of the combined
sample was 2 tonnes. Results of this testwork are expected before year end.

Current and immediate future funding is provided from available working capital.

Caledonia has been granted an extension to its exploration licences at Nama in
the form of a 'Retention Licence'.

(d) Financing

In July 2006 the company completed a private placement to raise additional
funds. This placement of
17 million units, each consisting of one common share and one share purchase
warrant, was completed in July 2006 and raised $2.16 million after expenses.

2. SUMMARY OF QUARTERLY RESULTS The following information is provided for each
of the eight most recently completed quarters of the company - ending on the
dates specified - in thousands of Canadian dollars and using the same principles
as used to produce the annual financial statements.


C$000's       Sept     June      Mar     Dec      Sept     June     Mar       Dec 
             30/06    30/06     31/06   31/05    30/05    30/05    31/05     31/04      
                                                                  
--------    -------- -------- -------- -------- -------- --------  ------- --------
--------    -------- -------- -------- -------- -------- --------  ------- --------
Net Sales
or
Total        $5,637   $1,304     $418     $453     $743     $965     $481     $469
Revenues
--------    -------- --------  -------  -------  -------  -------  -------  -------
Net (loss)

- total     ($3,074) ($2,893) ($2,266) ($2,054) ($2,564) ($3,276) ($1,786) ($4,569)

- per       ($0.007) ($0.007) ($0.006) ($0,006) ($0.008) ($0.011) ($0.007) ($0,015)
share
undiluted
- per       ($0.007) ($0.007) ($0.006) ($0,006) ($0.008) ($0.011) ($0.007) ($0,015)
share
diluted
--------    -------- --------  -------  -------  -------  -------  -------  -------

Note: As there are no extraordinary items the disclosed net losses per share are
identical to the total loss before extraordinary items.

For the period ended September 30, 2006 Caledonia had a net loss of $3.074
million ($0.007 per share) compared to a net loss of $2.564 million ($0.008 per
share) during the same period in 2005 and a net loss of $2.25 million ($0.008
per share) in the same period 2004.

At an operating profit level Caledonia had a profit of $1.524 million for the
period ended September 30, 2006 ( loss of $1.309 million in 2005 and loss of
$1.852 million in 2004) and a year to date operating loss of $1.982 million in
2006 ( loss $4.004 million in 2005 and loss $4.393 million in 2004)

The results for the quarter ended September 30 , 2006 are affected by the
inclusion of Blanket Mine results, and the lower results for Barbrook Mine due
to the industrial action that took place during the quarter. Net sales for
Barbrook Mine for the quarter ended September 30 , 2006 were $1.098 million
($1.303 million quarter ended June 30th and $417 for quarter ended Mar 31st).
Net sales for Blanket Mine for the quarter ended September 30 , 2006 were $4.538
million.

Included in the loss for the quarter is an unrealized exchange loss of $1.659
million (profit of $125 in quarter ended June 30 , 2006 and profit of $104 in
quarter ended March 31 , 2006) of which Blanket Mine's contribution to this loss
amounted to $1.595 million due to the devaluation of the Zimbabwe dollar in
August 2006.

Also included in the loss for the quarter is an amortization charge of $1.846
million ($965 quarter ended June 30, 2006 and $181 for quarter ended March 31,
2006 ). The amortization charge has increased as the Barbrook Mine plant
expansion started to be amortised during quarter ended June 30, 2006 and the
amortization rate at Barbrook has increased from 13% pa to 16,5% pa based on
life of mine calculations.

The loss in 2006 results from mining operations at Barbrook and Blanket, the
normal administration expenses and ongoing exploration costs during the quarter.

3. LIQUIDITY

Blanket Mine is financially self sufficient relating to working capital
resources and the costs of the #4 shaft expansion project. The future of
Barbrook Mine will determine the future cash needs of Caledonia. Settlement of
current working capital liabilities will continue to be funded via the receipt
of funds from shareholders as and when necessary.

4. CAPITAL RESOURCES

The only commitments towards capital expenditure are related to the completion
of #4 shaft expansion project at Blanket Mine. This project will continue to be
internally funded by Blanket Mine.There are no other capital projects associated
with any Caledonia operations that require funding.

5. CRITICAL ACCOUNTING ESTIMATES

There are no critical accounting estimates made by Caledonia that would
materially affect the financial condition or results of the company if the basis
of the estimate was changed.

6. ADDITIONAL INFORMATION

(a) As at October 31, 2006 the following securities of the Company were
    outstanding:
    - 457,981,021 common shares.

    - 17,238,000 common share purchase options at an average price of $0.21 
      maturing at various dates until May 11, 2016.

    - 17,850,000 common share purchase warrants exercisable at a price of $0.20 
      per share until December 28, 2007

    - 10,000,000 common share purchase warrants exercisable at a price of $0.20
      per share until January 31, 2008

    - 5,437,626 common share purchase warrants exercisable at a price of $0.20 
      per share until February 3, 2008.

    - 22,890,000 share purchase warrants exercisable at a price of $0.15 per 
      share until April 28, 2007.

    - 9,748,259 share purchase warrants exercisable at a price of $0.15 per 
      share until May 12, 2007.

    - 2,190,000 share purchase warrants exercisable at a price of $0.18 per 
      share until May 12, 2007.

    - 17,000,000 share purchase warrants exercisable at a price of $0.16 per 
      share until July 27, 2007.

(b) For further information about Caledonia reference is also made to its 2005
    20F Annual Registration Statement dated March 31, 2006 filed with the U.S.
    Securities and Exchange Commission on its EDGAR .



Management's Responsibility for Financial Reporting

To the Shareholders of Caledonia Mining Corporation:

The accompanying unaudited consolidated financial statements of Caledonia were
prepared by management in accordance with accounting principles generally
accepted in Canada, consistently applied and within the framework of the summary
of significant accounting policies in these consolidated financial statements.
Management is responsible for all information in the quarterly report. All
financial and operating data in the quarterly report is consistent, where
appropriate, with that contained in the consolidated financial statements.

The Board of Directors discharges its responsibilities for the consolidated
financial statements primarily through the activities of its Audit Committee
composed of three directors, two of whom are not members of management. This
Committee meets with management to assure that it is performing its
responsibility to maintain financial controls and systems and to approve the
quarterly consolidated financial statements of Caledonia.

The consolidated financial statements have not been reviewed by Caledonia's
auditors.

S. E. Hayden                          S.R. Curtis
President and                         Vice-President Finance
Chief Executive Officer               and Chief Financial Officer

Consolidated Balance Sheets
(in thousands of Canadian Dollars)

                                        
                                    September 30,   December 31,  September 30,                           
(Unaudited)                                 2006           2005           2005
Assets

Current Assets
Cash and short term deposits                 906          1,076             94
Accounts Receivable                        2,514            768            361
Inventories                                2,306             90            621
Prepaid expenses                             302            330            168
                                        __________     __________     __________
                                           6,028          2,264          1,244

Investment at cost                            79             79             79
Capital assets                             8,427          9,156          6,897
Mineral properties                        13,087         10,839         11,452
                                        __________     __________     __________
                                          21,593         20,074         18,428
                                        __________     __________     __________
Total assets                              27,621         22,338         19,672
                                        __________     __________     __________

Liabilities and Shareholder
Equity

Current Liabilities
Bank overdraft                                 -            197              -
Accounts payable                           4,768          2,392          1,066

Long term debt                                45
Prov for site restoration                  1,043            377            407
                                        __________     __________     __________
                                           5,856          2,966          1,473

Shareholders equity
Share capital                            190,626        180,053        176,539
Contributed surplus                          975            923            742
Compensation warrants                                                      468
Deficit                                 (169,837)      (161,604)      (159,550)
                                        __________     __________     __________
                                          21,765         19,372         18,199
                                        __________     __________     __________
Total Capital and liabilities             27,621         22,338         19,672
                                        __________     __________     __________



Consolidated Statement of Deficit
(in thousands of Canadian Dollars)

                        Three month period ended         Nine month period ended
                        September 30,                    September 30,
(Unaudited)             2006       2005       2004       2006       2005       2004
-------------------    -------    -------    -------   --------    -------    -------
Deficit,
beginning           (166,763)  (156,986)  (145,180)  (161,604)  (151,924)  (141,945)
Net(loss) for
the period            (3,074)    (2,564)    (2,250)    (8,233)    (7,626)    (5,485)
  -----------------   --------   --------   --------   --------   --------   --------
Deficit, end
of period           (169,837)  (159,550)  (147,430)  (169,837)  (159,550)  (147,430)

Consolidated Statement of Operations
(in thousands of Canadian Dollars)

                       Three month period ended      Nine month period ended
                       September 30,                 September 30,
(Unaudited)            2006      2005      2004      2006      2005      2004
-------------------   -------   -------  --------   -------   ------- ---------
Revenue and
operating costs
Revenue from
sales                 5,637       743       202     7,359     2,189       372
Operating
costs                 4,114     2,052     2,054     9,342     6,193     4,765
                      -------   -------  --------   -------   ------- ---------
Operating
profit (loss)         1,524    (1,309)   (1,852)   (1,982)   (4,004)   (4,393)
                      -------   -------  --------   -------   ------- ---------

Costs and
expenses
Gen and admin           987       341       365     1,719     1,565     1,324
Interest                 (3)        4       (10)        1         9        53
Unrealised
forex
loss(gain)            1,659       284         -     1,433       979       334
Other expenses
(income)              1,955       626        43     3,098     1,069      (681)
                      -------   -------  --------   -------   ------- ---------
                      4,597     1,255       398     6,250     3,622     1,030
                      -------   -------  --------   -------   ------- ---------

(Loss) before
non
controlling
interest             (3,074)   (2,564)   (2,250)   (8,233)   (7,626)   (5,423)
non
controlling
interest                                                                  (13)
-------------------   -------   -------  --------   -------   ------- ---------
Net (loss) for
the period           (3,074)   (2,564)   (2,250)   (8,233)   (7,626)   (5,410)

-------------------   -------   -------  --------   -------   ------- ---------

Operating
profit/(loss)
per share           $0.0033   ($0.004)  ($0.006)  ($0.005)  ($0.013)  ($0.015)
            

Basic and fully
diluted

Net (loss) per
share               ($0.007)  ($0.008)  ($0.008)  ($0.020)  ($0.024)  ($0.019)

Basic and fully
diluted


Consolidated Statement of Cashflows
(in thousands of Canadian Dollars)

                   Three month period ended         Nine month period ended
                   September 30,                    September 30,
(Unaudited)        2006       2005       2004       2006       2005       2004
Cash provided
by (used in)

Operating
activities
Operating
gain/(loss)
for the period    1,523     (1,309)    (1,852)    (1,982)    (4,004)    (4,393)

Other costs
and expenses
and
non-controlling
interests        (4,597)    (1,255)      (398)    (6,250)    (3,622)    (1,017)

Adjustments to
reconcile net
cash from
operations
                    373        690        162      1,558      1,208       (430)

Changes in
non-cash
working
capital
balances 
                  1,175        107       (203)    (1,513)      (135)      (360)
               ________   ________   ________   ________   ________   ________
                 (1,527)    (1,767)    (2,291)    (8,188)    (6,553)    (6,200)
               ________   ________   ________   ________   ________   ________
Investing
activities
Capital
expenditure        (518)       (79)      (451)    (1,305)      (335)    (1,565)
Expenditures
on mineral
properties         (523)      (611)      (563)    (1,053)    (2,723)    (1,242)
               ________   ________   ________   ________   ________   ________
                 (1,041)      (690)    (1,014)    (2,358)    (3,058)    (2,807)
Financing
activities
Reduction of
overdraft                                           (197)
Issue of share
capital net of
costs             2,160         69          -     10,573      3,235     14,167
               ________   ________   ________   ________   ________   ________
                  2,160         69          -     10,376      3,235     14,167
               ________   ________   ________   ________   ________   ________

Increase(decre
ase) in cash
for the period     (408)    (2,388)    (3,305)      (170)    (6,376)     5,160
Cash beginning
period            1,314      2,482     12,644      1,076      6,470      4,179
               ________   ________   ________   ________   ________   ________
Net Cash end
period              906         94      9,339        906         94      9,339
               ________   ________   ________   ________   ________   ________






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