Acquisition of Gold Mine

Caledonia Mining Corporation
20 June 2006


                          Caledonia Mining Corporation
                                        
                    Caledonia Mining Purchases Blanket Mine

Toronto, Ontario - June 20, 2006: Caledonia Mining Corporation ('Caledonia')
(TSX: CAL, NASDAQ-OTCBB: CALVF and LSE AIM: CMCL) is pleased to announce that it
has purchased the Blanket Mine in Zimbabwe from Kinross Gold Corporation
('Kinross') of Toronto. The conditions of the agreement which required that the
transaction be approved by the Reserve Bank of Zimbabwe have now been fulfilled.
Although the agreement was signed May 12, 2006 the transaction is effective as
at April 1, 2006. The consideration for the purchase was the payment to Kinross
of $1,000,000 (U.S.) and the issue of 20,000,000 Caledonia shares.

The Blanket Mine is located in the southwest of Zimbabwe and was acquired by
Kinross from Falconbridge Gold Corporation in 1993. The mine is 560km from
Harare the capital city, and 150km from Bulawayo, Zimbabwe's second largest
city. The town of Gwanda, the provincial capital of Matabeleland South, the
province in which Blanket Mine is located, is 16 kilometres from the mine.

The mine has been producing gold since the time of the ancients. Notable
production commenced at the beginning of the 20th century. Total historical
production of gold from the Blanket Mine reportedly passed 1,000,000 ounces in
2005.

Blanket Mine currently mills 600 tonnes per day of underground ore at an average
grade of 4.1 grams per tonne and currently produces an average of 2,100 ounces
of gold per month. A US$2.5 million project to complete the new No. 4 shaft and
increase milling throughput to 1,000 tonnes per day and gold production to over
40,000 ounces per year, is proposed to be completed by mid 2007.

The Reserve and Resource data reported to Canadian standards by the mine staff
as at the end of December 2005 are:

Mineral Reserves

Classification                 Reserves        Gold       Content      Content
                               (Tonnes)        Grade      Kgs          Ounces

Proven Ore                     1,118,000       4.19        4,684      150,700
Probable Ore                   2,105,000       4.27        8,988      288,900
Total Proven and Probable Ore  3,223,000       4.24       13,673      439,600

Mineral Resources

                               Resources       Gold       Content      Content
                               (Tonnes)        Grade      Kgs          Ounces

Indicated                        431,000       4.06        1,750       56,200
Inferred                       2,064,000       6.31

*The mineral resources figures are not included in the mineral reserve figures.
Dr Trevor Pearton, PhD, FGSSA., Caledonia's Geological Consultant, is 
Caledonia's 'Qualified Person' with respect to the Blanket Mine property for 
the purposes of Canadian National Instrument 43-101.

Commenting on this transaction, Stefan Hayden, President and CEO of Caledonia,
said 'This acquisition is an important step in reaching Caledonia's objective of
developing its asset base into a significant diversified international mining
company through profitable gold production. The acquisition of this high class
low cost gold producing asset, the development of our Nama cobalt property, and
our successful PGE, nickel and copper exploration activities underline our focus
on Southern Africa and should rapidly begin to add shareholder value. The
greenstone gold deposits found in Zimbabwe are our specialty, and provide
considerable opportunity for the further expansion of our gold mining and
production interests.

I am delighted that we are able to retain the current management team, in
particular Mr Caxton Mangezi who has been appointed as our General Manager -
Zimbabwe, and Mr Peter Dell who has been appointed CFO - Zimbabwe. Together with
the highly skilled and motivated Blanket management team they will continue to
ensure the Blanket operations run, as they have in past, with great efficiency,
and provide Caledonia with a solid management basis for the expansion of Blanket
and our interests. This transaction will benefit both the employees of Blanket
and the local communities around the mine, and Caledonia welcomes Kinross as a
shareholder in our growing African mining company.'

Caledonia Mining Corporation will make application to AIM for the admission of
20,000,000 new common shares and their admission to AIM is expected to become
effective on 26 June 2006.

For more information, please contact:

Stefan Hayden                                     Nick Bias
President and CEO, Caledonia Mining Corp.         BuckBias
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.


                      This information is provided by RNS
            The company news service from the London Stock Exchange