Underground operations resume

Caledonia Mining Corporation
14 August 2007


                          Caledonia Mining Corporation

CALEDONIA'S BLANKET MINE RESUMES UNDERGROUND OPERATIONS AFTER SHAFT EXPANSION IS
                                  COMMISSIONED

August 14, 2007: Caledonia Mining Corporation ('Caledonia') (TSX: CAL,
NASDAQ-OTCBB: CALVF, AIM: CMCL) is pleased to announce that underground mining
operations resumed at its Blanket Mine in Zimbabwe on July 26, 2007. Although
the facilities have a capacity of 600 metric tons per day only 380 - 400 tpd are
being produced for the time being due to power outages and shortages.

The Blanket Mine planned a shutdown of 90% of its underground operations on
February 15, 2007 to allow for stripping and re-equipping of the No. 4 shaft
(main production shaft) in order to complete the shaft re-equipment from 6 level
down to 24 level. This was anticipated to have taken 90 days with
re-commissioning planned for June. However this programme was delayed due to the
challenging operating environment in Zimbabwe.

During the shutdown period tailings sands were transported to the mine for
further gold recovery. This project was stopped in late June as the high grade
tailings had been exhausted and recoveries from other lower grade tailings had
become marginal due to high costs of transportation caused by excessive
inflation in Zimbabwe.

Ceasing production in late June reduced the operational losses incurred by
Blanket Mine during this period of low gold production.

By the end of June the shaft equipping had reached 18 level and as this was
below the mid-shaft loading bins, a decision was taken to re-activate 14 level
loading chute so the mine could get back to its 600 metric tons per day
production level. The further shaft equipping down to 24 level is continuing and
should enable Blanket Mine to reach its production goal of 1,000 metric tons per
day by the end of 2007.

For more information, please contact:

Stefan Hayden, President & CEO   Alex Buck                Jonathan Wright
Caledonia Mining                 Buck-bias                Seymour Pierce
Tel: [phone]             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.




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