Caledonia Mining Corporation: Exercise of Options

TORONTO, ONTARIO -- (Marketwire) -- 01/23/13 -- Caledonia Mining Corporation (the "Company") (TSX: CAL)(OTCQX: CALVF)(AIM: CMCL), received notice today that:

--  James Johnstone, a Director of the Company, exercised options over an
    aggregate 100,000 ordinary shares in the Company ("Ordinary Shares") at
    an exercise price of Cdn$0.07 per share. Following this transaction,
    James Johnstone has an interest in 100,000 Ordinary Shares representing
    approximately 0.02% of the Company's issued ordinary share capital, all
    of which are held beneficially.

--  Steven Curtis, a Director, Officer and Person Disclosing Management
    Responsibility of the Company, exercised options over an aggregate
    2,300,000 Ordinary Shares at any exercise price of Cdn $0.07 per share.
    Following this transaction Steven Curtis has an interest in 2,700,000
    Ordinary Shares representing approximately 0.52% of the Company's issued
    ordinary share capital, all of which are held beneficially.

The Company has applied for the 2,400,000 new Ordinary Shares to be admitted to trading on AIM and admission is expected to take place on January 28, 2013.

Following this notification, the Company has 517,061,780 Ordinary Shares in issue.

Contacts:

Caledonia Mining Corporation

Mark Learmonth

+ 27 11 447 2499
marklearmonth@caledoniamining.com
www.caledoniamining.com


Canaccord Genuity Limited

Andrew Chubb / Sebastian Jones

+ 44 20 7523 8350


Newgate Threadneedle

Terry Garrett / Beth Harris / Graham Herring

+44 20 7653 9850


CHF Investor Relations

Jeremy Hill

+1 416 868 1079 x 238
jeremy@chfir.com