Caledonia Mining Corporation: Q3 2013 Results

TORONTO, ONTARIO--(Marketwired - Nov 13, 2013) - Caledonia Mining Corp. ("Caledonia" or the "Company") (TSX:CAL)(OTCQX:CALVF)(AIM:CMCL) is pleased to announce its operating and financial results for the third quarter of 2013 ("Q3" or the "Quarter") and the nine months to September 30, 2013. All results are reported in Canadian dollars unless otherwise indicated. Caledonia owns 49% of the Blanket Mine in Zimbabwe. Operational and financial information set out below is on a 100% basis unless indicated otherwise.

Commenting on the Q3 results, Stefan Hayden, Caledonia President and Chief Executive Officer said: "The third quarter of 2013 presented continued challenges due to the prevailing lower gold price. In response to the lower gold price, Caledonia, working with Blanket management, has introduced measures to increase mine production from approximately 1,030 tonnes per day ("tpd") in Q1 2013, to approximately 1,075 tpd in the second quarter and to 1,110 tpd in the third quarter.

Gold production in the third quarter also benefitted from an improvement in the realised grade. The average realised grade in Q3 was 4.03 grams per tonne ("g/t"), higher than the 3.82 g/t achieved in the previous quarter but lower than the 4.16 g/t achieved in 2012. Gold recovery also improved in the Quarter, metallurgical recoveries in the Quarter increased to 93.6% from 93.2% in the preceding quarter and were virtually unchanged from the 93.7% achieved in 2012. Blanket's metallurgical plant has considerable surplus capacity and is one of the most efficient in the industry, which reflects our recent investments and the skills of Blanket's management and employees.

The adverse effect of the lower gold price on profitability was also mitigated somewhat by lower costs. Blanket's on-mine cost per ounce, all-in sustaining cost per ounce and all-in cost per ounce were all lower in Q3 2013 than in the preceding quarter and in 2012. Blanket retains its position as one of the lowest cost gold producers in Africa.

Supported by the Company's strong cash position and continued cash generation at the operational level, development and exploration activity at Blanket has accelerated. We continue to move towards achieving our targeted increase in production. In light of the increased rate of production, in August 2013 we increased our production guidance for 2013 from 40,000 ounces to 44,000 ounces. As previously advised, production is expected to increase to 48,000 ounces in 2014 and 52,000 ounces in 2015.

Exploration at Blanket below 750 m and at Blanket's satellite projects continues and we continue to be encouraged by the results evaluated so far. Development and exploration work at GG and Mascot continues to identify mineralisation.

Regrettably an accident occurred at Blanket in the Quarter as a result of which one Blanket employee was fatally injured and two employees were injured. Following this accident, Blanket management has increased its measures to ensure that the prescribed safe-working practices are strictly adhered to. The Directors and Management of Caledonia express their sincere condolences to the family and colleagues of the deceased employee.

As a low-cost producer with a robust balance sheet, Caledonia is well-positioned to continue to implement its growth strategy, notwithstanding the current volatility in the gold price."

The full Report & Accounts, including the Management Discussion and Analysis for the quarter ended September 30, 2013 are available from the Company's website www.caledoniamining.com and from SEDAR.