Caledonia Mining Corporation: Update on Indigen...

FOR:  CALEDONIA MINING CORPORATION

TSX SYMBOL:  CAL
OTC Bulletin Board SYMBOL:  CALVF
AIM SYMBOL:  CMCL

August 19, 2011

Caledonia Mining Corporation: Update on Indigenisation at the Blanket Mine in Zimbabwe

TORONTO, ONTARIO--(Marketwire - Aug. 19, 2011) - Caledonia Mining Corporation ("Caledonia")
(TSX:CAL)(OTCBB:CALVF)(AIM:CMCL) provides the following update regarding indigenisation at the Blanket Gold
Mine ("Blanket"), in Zimbabwe.

Caledonia submitted a comprehensive indigenisation proposal (the "proposal") to the Minister for Indigenisation
on May 9, 2011. Since then, neither Blanket nor Caledonia have received any formal notification that the
proposal is deficient or that it should be revised within any specified timescale. Caledonia has, however,
received a copy of a letter sent from the Minister for Indigenisation to the Minister of Mines, in which he
requests that the Minister of Mines cancels Blanket's operating licence on the grounds that Caledonia's
proposal does not meet the legislated indigenisation requirements.

It is understood that a number of other mining companies, banks and other businesses have been instructed to
revise their indigenisation proposals or risk the loss of their operating licences.

Caledonia believes the Minister for Indigenisation has exceeded his legal powers both in terms of his
assessment of Caledonia's proposal and his request to the Minister of Mines. Caledonia is seeking urgent
clarification from the relevant ministers, and is also consulting with its legal advisers regarding appropriate
legal action.

Blanket's operations continue as normal and further information will be made available on this matter as
appropriate.

FOR FURTHER INFORMATION PLEASE CONTACT:

Caledonia Mining
Mark Learmonth
+ 27 11 447 2499
[e-mail]
www.caledoniamining.com

OR

Buck Bias
Alex Buck
+ 44 7932 740 452

OR

Collins Stewart Europe Limited
John Prior/Sebastian Jones
+ 44 20 7523 8350

OR

Renmark Financial Communications Inc
John Boidman
[e-mail]

OR

Dustin Buenaventura:
[phone] or [phone]
[e-mail]
www.renmarkfinancial.com

Caledonia Mining Corp