20th Jun 2006 13:00
Caledonia Mining Corporation20 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 ithas purchased the Blanket Mine in Zimbabwe from Kinross Gold Corporation("Kinross") of Toronto. The conditions of the agreement which required that thetransaction be approved by the Reserve Bank of Zimbabwe have now been fulfilled.Although the agreement was signed May 12, 2006 the transaction is effective asat April 1, 2006. The consideration for the purchase was the payment to Kinrossof $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 byKinross from Falconbridge Gold Corporation in 1993. The mine is 560km fromHarare the capital city, and 150km from Bulawayo, Zimbabwe's second largestcity. The town of Gwanda, the provincial capital of Matabeleland South, theprovince in which Blanket Mine is located, is 16 kilometres from the mine. The mine has been producing gold since the time of the ancients. Notableproduction commenced at the beginning of the 20th century. Total historicalproduction of gold from the Blanket Mine reportedly passed 1,000,000 ounces in2005. Blanket Mine currently mills 600 tonnes per day of underground ore at an averagegrade of 4.1 grams per tonne and currently produces an average of 2,100 ouncesof gold per month. A US$2.5 million project to complete the new No. 4 shaft andincrease milling throughput to 1,000 tonnes per day and gold production to over40,000 ounces per year, is proposed to be completed by mid 2007. The Reserve and Resource data reported to Canadian standards by the mine staffas 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 4,684 150,700Probable Ore 2,105,000 4.27 8,988 288,900Total 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 56,200Inferred 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 ofdeveloping its asset base into a significant diversified international miningcompany through profitable gold production. The acquisition of this high classlow cost gold producing asset, the development of our Nama cobalt property, andour successful PGE, nickel and copper exploration activities underline our focuson Southern Africa and should rapidly begin to add shareholder value. Thegreenstone gold deposits found in Zimbabwe are our specialty, and provideconsiderable opportunity for the further expansion of our gold mining andproduction interests. I am delighted that we are able to retain the current management team, inparticular Mr Caxton Mangezi who has been appointed as our General Manager -Zimbabwe, and Mr Peter Dell who has been appointed CFO - Zimbabwe. Together withthe highly skilled and motivated Blanket management team they will continue toensure the Blanket operations run, as they have in past, with great efficiency,and provide Caledonia with a solid management basis for the expansion of Blanketand our interests. This transaction will benefit both the employees of Blanketand the local communities around the mine, and Caledonia welcomes Kinross as ashareholder in our growing African mining company." Caledonia Mining Corporation will make application to AIM for the admission of20,000,000 new common shares and their admission to AIM is expected to becomeeffective on 26 June 2006. For more information, please contact: Stefan Hayden Nick BiasPresident and CEO, Caledonia Mining Corp. BuckBiasTel: +27 (0)11 447 2499 Tel: +44 (0)7887 920 530 Further information regarding Caledonia's exploration activities and operationsalong with its latest financials may be found at www.caledoniamining.com. Certain statements included herein are "forward-looking statements". Managementcautions that forward-looking statements are not guarantees and that actualresult could differ materially from those expressed or implied in theforward-looking statements. Important factors that could cause the actualresults of operations, exploration or development programs, or the financialcondition of the Company, to differ include, but are not necessarily limited to,the risks and uncertainties discussed in documents filed by the Company with thevarious regulatory authorities having jurisdiction. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Caledonia Min