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Caledon Resources (CDN)

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Monday 24 January, 2005

Caledon Resources

Drilling Report

Caledon Resources PLC
24 January 2005





               18 Upper Brook Street. • London W1K 7PU • England
         Telephone +44 (0) 20 7318 5780 Facsimile +44 (0) 20 7318 5781

                                 Press Release

                                                                January 24, 2005

               Caledon Resources plc ("Caledon" or "the Company")
         Extensive Widths of Economic Gold Grades Intercepted at Mojiang

   • Drilling demonstrates exceptional continuity and consistency of gold
     grades over widths of up to 72 metres
   • Higher grade subsections of gold include 16 metres grading 4.3 g/t, 4
     metres grading 8.56 g/t, 20 metres grading 4.34 g/t
   • Several holes bottomed in grades in excess of 1 g/t
   • Open-ended strike length of over 650 metres identified in current drilling 
     operations

Caledon is pleased to announce results from its on-going drill programme at its
Mojiang gold project, situated in Yunnan province. These results are in respect
of the first 7 drill holes completed to date on the 16 hole - 1006 metre reverse
circulation (RC) programme at Mojiang. Notwithstanding the fact that the initial
phase of drilling was performed for reconnaissance purposes, all seven of the
initial holes successfully intersected the targeted zones of gold
mineralisation.

All holes reported consistent economic gold mineralisation over widths ranging
from 16 metres to a maximum of 72 metres, highlighting stacked, sub-horizontally
orientated gold mineralised zones associated with low sulphidation epithermal
style quartz veins and related breccias. The widely spaced holes assayed to date
cover a surface strike length of over 650 metres near the crest of Mojiang Hill.

Of further importance is the fact that three of the seven holes managed to
bottom in economic gold mineralisation, reporting grades of 1 g/t or better in
the very last four metre wide sample of each hole. In these instances, the
depths obtained in the RC drilling of these holes reached the maximum depth of
penetration and performance limit of the rig itself.

The following is a table of assay results obtained from the first seven of
sixteen drill holes.

    Hole Id          from         to                 Intersection

    MJRC001             0         54               54 m @ 1.11 g/t
    MJRC002             0         20               20 m @ 0.91 g/t
    MJRC003             0         72               72 m @ 1.92 g/t
   including            0         16               16 m @ 4.30 g/t
   including           12         16               4 m @ 8.56 g/t
    MJRC004             0         38               38 m @ 1.58 g/t
    MJRC005             0         16               16 m @ 1.25 g/t
   including           28         64               36 m @ 1.01 g/t
    MJRC006             0         48               48 m @ 1.28 g/t
    MJRC007             0         20               20 m @ 4.34 g/t


In summary, the results further illustrate the wide and coherent nature of the
Mojiang epithermal gold deposit and are consistent with results obtained in past
mapping and sampling conducted by the Company in 2004. In addition to being
step-outs on known gold mineralisation, these holes also helped to verify the
results obtained from past drilling conducted in the vicinity by Caledon's
Chinese partners.

Three of the remaining nine un-assayed holes were re-drills of holes that did
not get through to the targeted mineralisation owing to poor ground conditions.
The results for the remaining 6 holes are expected out within the next few
weeks.

Mojiang Drill Results: Significance

Caledon's drilling has been conducted in proximity to areas which have been
mined in the past or are currently being mined on a small scale by our Chinese
partners, the Mojiang Mining Limited Company ("MMLC").

Since a significant number of drill holes assayed to date have bottomed in ore
grade rock, the true thickness of the stacked, sub horizontally orientated
epithermal quartz reefs is not yet known but very likely greater than that
intersected in the current drilling. It is noteworthy that the average zone
thickness intercepted by Caledon in the first seven holes is 43.4 metres with
the lower limits of the zones yet to be tested due to depth performance
limitations on the reverse circulation rig.

The apparent vertical extent of the sub-horizontally stacked quartz reefs
measured from the top of the upper most open pit workings on Mojiang Hill, down
to the lowest underground mine workings and adits day-lighting in the valley
below is over 150 metres (vertical).

To our knowledge Mojiang has never been studied as a potential large scale
open-cut mine, oriented along the crest and western flank of Mojiang Hill. In
light of the geometries intercepted in the recent drilling, such a study may be
warranted in the future.

With respect to the gold metallurgy at Mojiang, Caledon has yet to carry out
preliminary test work on its samples, such as standard bottle roll testing and
column leaching. However, MMLC has historically mined and processed free-milling
non-refractory gold ore, from surface and at depth, using conventional
Carbon-in-Pulp technology. This type of conventional technology permits the bulk
processing of low grade ore material at relatively low cost, compared to
refractory ore treatment. This treatment methodology is employed on a much
larger scale at several well known and profitable Western mining operations
around the world.

Deal Structure

In December 2004 Caledon, through its wholly owned subsidiary Blackwatch
Resources Limited, converted a LOI into a joint venture ("JV") agreement with
the Mojiang Mining Limited Company, this JV allows Caledon to earn a 70% stake
in the Mojiang mine concession (7.2 km2) and new tenements within Mojiang County
on an exploration spend, the details of which were announced on 17 December
2004.

Mojiang Geology

The Mojiang project and mine site area is situated 240kms South West of Kunming,
the capital of Yunnan. Mojiang can be easily accessed via a new major highway
from Kunming, which is approximately a four hours drive. The main target area is
the Mojiang mine, an active gold mine producing gold from a number of small
open-pit and underground operations.

Mojiang has produced approximately 300,000 ounces over the last ten years. At
present, the majority of the gold mining operation is focused on gold production
from open pits. The Mojiang gold zone occurs over a strike length of 3,100
metres and ranges in width from 50 metres to 200 metres.

The near surface mineralisation at Mojiang is hosted in a thick zone of breccia
formed at the thrusted contact between serpentinised ultramafics (Cambrian age)
and siltstone and sandstone (Triassic age). Near surface, epithermal veins occur
within this zone but make up a small percentage of the overall
volume. Individual veins displaying classic "crack-seal" and colloform
epithermal textures have been mined from underground, 100 to 200 metres below
the surface.

Ore zones associated with low-sulphidation epithermal deposits are typically
localised in structures, but may also occur in permeable lithologies.
Upward-flaring ore zones centered on structurally controlled hydrothermal
conduits are typical. Large (> 1 m wide and hundreds of metres in strike length)
to small veins and stockworks are common with lesser disseminations and
replacements. Vein systems can be laterally extensive with high-grade ores
commonly found in dilational zones in faults at flexures and splays.

Commentary

George Salamis, Managing Director, reports "We are pleased with these initial
results from our reconnaissance drilling at Mojiang" and adds; "In light of the
extent of continuous and apparently non-refractory gold mineralisation which was
intersected in our drill sections, in addition a strike extent encountered of
well over 650 metres, we are eager to return to Mojiang for a second round of
drilling. We expect to resume drilling at Mojiang following the end of Chinese
New Year holidays in late February."

On behalf of the board:

Stephen R Dattels                George Salamis
Executive Chairman               Managing Director


For further information, please visit our website at www.caledonresources.com or
                                    contact:

                               Stephen R Dattels
                         sdattels@caledonresources.com

                                 George Salamis
                         gsalamis@caledonresources.com

                       Donal Douglas, Investor Relations
                         ddouglas@caledonresources.com

Caledon Resources Plc is a junior precious metals explorer quoted on the
Alternative Investment Market Stock Exchange (AIM: "CDN"). The company has
amassed a portfolio of four advanced stage gold exploration projects situated in
Southern China's "Golden Triangle" region. All sites are actively being mined by
the company's Chinese partners on a small scale, in geological settings
typically associated with disseminated, multi-million ounce ore bodies.
Management believes that the potential for discovery remains high in the
immediate vicinity of the small scale mining, through the application of Western
exploration techniques and philosophies.





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