Caledonia Mining Corporation
OTC Bulletin Board : CALVF
TSX : CAL
AIM : CMCL

Caledonia Mining Corporation

November 12, 2010 07:01 ET

Caledonia Mining Announces Third Quarter 2010 Results

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2010) - Caledonia Mining Corporation ("Caledonia") (TSX:CAL)(OTCBB:CALVF)(AIM:CMCL) is pleased to announce its third quarter 2010 operating and financial results. These are available on the Company's website www.caledoniamining.com and are also filed on www.sedar.com. The financial results below are reported in thousands of Canadian dollars, except where otherwise stated.

Financial highlights for the Quarter and the nine months ended September 30

  Three months
ended
September 30
Nine months
ended
September 30
 
(C$ 000's) 2010 2009 2010 2009  
Sales from continuing operations 6,331 4,932 14,975 7,295  
Operating costs 3,453 3,130 9,598 5,700  
Gross profit from continuing operations 2,878 1,802 5,377 1,595  
General & Administrative expenses 869 499 1,825 1,644  
Other costs 337 441 869 51  
Profit/(loss) after tax before discontinued operations 1,671 862 2,680 (100 )
           
Net profit/(loss) for the period after discontinued operations 1,647 826 2,600 (213 )
Net profit/(loss) per share before discontinued operations, basic and fully diluted $0.003 $0.002 $0.005 ($0.0002 )

For the quarter ended September 30, 2010 Caledonia generated revenue of $6.331 million from the sale of 4,934 ounces of gold at an average sale price of US$1,241 per ounce and a cash cost of US$651 per ounce, realizing a gross profit of $2.878 million and a net profit of $1.647 million. 

Commenting on the quarter's performance, Stefan Hayden, President and CEO said: "I am pleased to report that gold production at the Blanket mine was 45% higher than in the previous quarter. This was an outstanding and highly commendable performance by the Blanket and Caledonia management teams. This increase in production was also due to the implementation of a revised mine plan, improved recoveries from the metallurgical plant and the installation of the first standby generator in late June. The generator has allowed underground operations to continue during interruptions to the normal electricity supply. 

Blanket's cash costs decreased significantly from US$816 per ounce in the second quarter to US$651 per ounce in the third quarter. We expect that Blanket's cash costs will continue to decrease as production increases to an annualized level of approximately 40,000 ounces of gold per annum by the end of 2010, following the commissioning of the No. 4 Shaft Expansion Project at the end of third quarter. 

Provided a satisfactory investment climate is created in Zimbabwe and the Zimbabwean indigenization requirements and obligations are finally clarified and economically viable, Caledonia intends to make the significant capital investments in Blanket, which are required to sustain gold production at 40,000 ounces per annum.

At the Nama base metals exploration project in Zambia, the ongoing field work supports our current understanding of the geological structure and the possible continuation into the Nama Project area of the Copperbelt style mineralization that exists on neighboring properties. Tenders have been called for an initial multi-hole, deep-level diamond drilling program to explore for Copperbelt style mineralization. This program is expected to commence in 2011 as soon as the ground conditions permit after the rainy season. 

Discussions with the South African Department of Mineral Resources continue regarding the extension of the period of the exploration plan previously submitted in respect of the Company's exploration projects at Rooipoort and Mapochsgronde."

Further information is included in this quarter's MD&A which is available on the Company's website www.caledoniamining.com and is also filed on www.sedar.com

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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