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Blanket Gold Mine Analyst Visit - 7 February 2014

Blanket Gold Mine Analyst Visit - 7 February 2014. Disclaimer.

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Blanket Gold Mine Analyst Visit - 7 February 2014

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  1. Blanket Gold Mine Analyst Visit - 7 February 2014

  2. Disclaimer Thispresentationdoesnotconstitute,orformpartof,anyoffertosell orissueoranysolicitation ofanyoffertopurchaseorsubscribe for,anysharesinCaledonia,norshallit (oranypartofit)or thefactofits distribution,formthebasis of,orbereliedoninconnectionwith,oractas an inducement toenterintoanycontractoragreementthereto. Certainforwardlookingstatementsmaybe containedinthepresentationwhichinclude,without limitation,expectations regardingmetalprices,estimatesofproduction,operatingexpenditure, capital expenditureandprojections regardingthecompletionofcapital projectsaswell asthefinancialpositionofthecompany. Although Caledonia MiningCorporation(“Caledonia”)believesthattheexpectationsreflectedinsuchforward-lookingstatementsarereasonable,noassurance canbegiventhatsuchexpectations willprovetobeaccurate.Accordingly,resultscoulddiffer fromthoseprojectedasaresult of,amongotherfactors,changesineconomic andmarket conditions,changesintheregulatoryenvironmentandotherbusiness andoperationalrisks. Accordingly,neitherCaledonia,noranyofits directors,officers,employees, advisers,associated persons orsubsidiaryundertakingsshall beliableforanydirect,indirect orconsequentialloss or damagesufferedby anypersonas aresultofrelyinguponthis presentationoranyfuture communications inconnectionwiththis presentationandanysuchliabilitiesareexpressly disclaimed

  3. Contents • GroupOverview • ResultsHighlights • SummaryFinancials • Safety • A low cost producer • Geology • Mining • Metallurgical processing • ExplorationandDevelopment • No. 6 Winze • Outlook

  4. CaledoniaGroup Overview TSX: CAL. OTCQX:CALVF. AIM:CMCL. • CaledoniaGroup • Robustcashposition:$25matSeptember30,2013 • Blanket GoldMine,Zimbabwe(49%) • Low-cost: • Cash-costUS$554/oz • AISC:US$873/oz • All-inCostUS$999/oz • 2014productionguidance48,000oz • Internally fundedexpansionplans • Fully indigenised • NamaBaseMetals Project, Zambia (100%) • AdjacenttoVALEcoppermine development(Lubambe)

  5. Caledonia Group OverviewResults Highlights i. Production relatesto 100%oftheBlanketMinein Zimbabwe. Followingtheimplementationof indigenisationinSeptember2012, Caledoniaowns49% of Blanket C1 costs per ouncecomprisinglabour, electricity, consumables and on-mineG&A. All-inSustainingCostsincludesoff-mineG&A and sustainingcapitalinvestment 2012attributableprofitisafter $14.1mnon-cashchargeinrespectoftheimplementationof indigenisation Normalised profitfor2012excludesany expensesassociatedwiththeimplementationofindigenisationand unrealised foreign exchangeitems. Per sharenumbershave beenadjustedforthe1-10shareconsolidationeffectedonApril 122013 ii. iii. iv. v. vi.

  6. Blanket Gold Mine, ZimbabweSafety • Blanket’saccidentandinjuryrateis lowby Zimbabwean,internationalandregional standards. • Regrettably,anaccidentin Q3 2013resultedinthe fatality of one employee. • Blanketmanagementis workingto ensurethatsafe- workingproceduresare observedandimplemented Can we show a comparative figure say for SA to re-inforce the point that we are safer?? TotalInjuryIncident Rateisa measurementofall accidentsthat haveoccurred regardless ofinjuryornot,expressed per200,000 man-hoursworked. Thisincludes accidentsthatcould havecaused injuries.

  7. Blanket GoldMine,Zimbabwe ALow-CostAfricanGoldProducer: On Mine Costs • ThelowestcostlistedgoldproducerinAfrica:cashcostperounceofUS$554/oz • Goodcost control, amenablemineenvironment,efficientmetallurgicalplantand labour structure

  8. Blanket GoldMine,Zimbabwe ALow-CostAfricanGoldProducer:All-InclusiveSustainingCosts Est.Industry Average AISC $1,150/oz • • Q3 2013AISC:$873/oz • (estimatedindustry average: $1,150/oz) • 60%ofon-minecostsand 100%of corporateG&Aare fixed • As Blanketincreases productionfrom2014,AISC per ounceshouldfallas fixedcosts arespreadover moreouncesproduced Source: CaledoniaQ3 2013MD&A. 1.AISC includeson-minecashcosts,sustainingcapitalinvestment,headofficeG&A androyalty

  9. Blanket GoldMine,Zimbabwe ALow-CostAfricanGoldProducer • Insert explanations for people with an assumed high degree of technical knowledge why the costs are so low. We are an underground mine with frankly un-exceptional grades so how do we get such low costs per ounce?: • Low cost labour – get data for average employee cost compared to A • Efficient and productive labour – show our production rate per employee with average for SA • Beneficial mine environment • Blanket Mine is relatively shallow mine with the bottom most tramming level at 750m below surface. • The • No cooling requirement • Little need for roof support • ? Mining methodology? • High metallurgical recovery rates • Cost efficient supply-chain • Caxton Mangezi Source: CaledoniaQ3 2013MD&A. 1.AISC includeson-minecashcosts,sustainingcapitalinvestment,headofficeG&A androyalty

  10. Blanket GoldMine,Zimbabwe ALow-CostAfricanGoldProducer • Insert an analysis of historic costs – we have disclosed this in the MD&A so it is not new – labour, electricity, consumables, other. Also add in capex and royalty. • No need to talk to this, but they will need it for reference if they decide to write on us Source: CaledoniaQ3 2013MD&A. 1.AISC includeson-minecashcosts,sustainingcapitalinvestment,headofficeG&A androyalty

  11. Blanket GoldMine,Zimbabwe Geology • Get Trevor to put together a page talking about the geology • Include the reserve and resource statement as they will only ask for it Source: CaledoniaQ3 2013MD&A. 1.AISC includeson-minecashcosts,sustainingcapitalinvestment,headofficeG&A androyalty

  12. Blanket GoldMine,Zimbabwe Mining • Use this long section, but take out the all development stuff - highlight the main areas of production as being AR Main and AR South L14 Haulage L18 Haulage L22 Haulage Planned L26 Haulage No. 6 Winze Planned L30 Haulage

  13. Blanket GoldMine,Zimbabwe Mining • Decsription of mining methodology – underhand stoping or whatever it is

  14. Blanket GoldMine,Zimbabwe Metallurgical Plant Insert the flow chart – analysts asked for this after the last visit. Print it as A3 and fold it into the A4 presentation

  15. Blanket gold mine, ZimbabweMETALLURGICAL RECOVERY % High Metallurgicalrecovery

  16. Blanket gold mine, ZimbabweMETALLURGICAL RECOVERY % Explain what we have done to increase recoveries and reduce cyanide consumption: agitators, etcetc

  17. Blanket Gold Mine, ZimbabweExploration and Development: Blanket on-mine activity L14 Haulage L18 Haulage L22 Haulage Planned L26 Haulage No. 6 Winze Planned L30 Haulage • Extensions to the 14 and 18 Level Haulages will open up new mining areas • No. 6 Winze Project (sinking to 1080m) & develop new 26 and 30 level haulages • Level 22 Haulage will provide platforms for exploration drilling below 750m

  18. Blanket Gold Mine, ZimbabweExploration and Development: Satellite Projects 18 exploration projects located on the Gwanda greenstone belt • GG Project (7km from Blanket) • Shaft sunk to 120m. • Underground development continues on 60m, 90m & 120m levels • Lateral drilling to define resources • Metallurgical test work in progress • Mascot Project (42km from Blanket) • Shaft infrastructure refurbished • Underground development and exploration on 4 Levels • Lateral drilling to define resources • Metallurgical test work in progress • Sabiwa and Abercorn • Next projects to be addressed Blanket Sabiwa Abercorn GG Mascot

  19. Blanket Gold Mine, ZimbabweExploration and Development: No.6 Winze Project • Exploration to improve our understanding of the inferred Blanket ore body below 750m • First 2013 program hole intersected 3.57g/t over 4.7m • Additional drilling machine to be commissioned shortly [update?] • Shaft sinking to access the existing inferred resource on the Blanket ore body below 750m has commenced • Deepen the existing No.6 Winze from 750m to 1,060m • Two new haulage developments at 870m (28 Level) and 990m (30 Level) • Ore hoisted up No.6 Winze will be transferred into the No 4 shaft crushing and loading system for hoisting to surface using existing surplus hoisting capacity • Target production: 600tpd (24Koz pa) • Pre-production capital cost: US$xmillion 19

  20. Blanket Mine, Zimbabwe 6 winze project BEFORE Collar level for Atlantis Winches before installation AFTER Collar level completed installation

  21. Stage on 22 Level STAGE ON 22 LEVEL ATTACHED TO THE WINCHES AND LIFTED UP

  22. Blanket Gold Mine, ZimbabweOutlook • Goldproductionhas quadrupledsinceQ12010 • IncreasedproductioninQ3 2013was duetoincreasedgradeandrecovery Increasedfullyearproduction guidancefrom40,000ozto 44,000ozin August2013 Source:CaledoniaMD&A’s

  23. Outlook • Continuedstrongoperationalperformanceat Blanket • Operational production andcostswellundercontrol • Continuedprogressas plannedondevelopmentandexplorationat Blanket • Target2014productionof48,000oz; • Target2015productionof52,000oz • Caledonia’sfinancialpositionremainsrobust: $25m of externalcash • Expansion program progressing well with sinking of 6 winze gaining momentum • Blanketis fully compliantwithZimbabwe’sindigenisationrequirementsandits indigenisationarrangementsareworkingas envisaged

  24. Contacts • Website:www.caledoniamining.com • Tickers:TSE-CAL; OTCQX–CALVF; AIM- CMCL • StefanHayden,Presidentand CEO Tel: +27114472499 Email:shayden@caledoniamining.com • MarkLearmonth,Vice PresidentInvestor Relationsand CorporateDevelopment Tel: +27114472499 Email:marklearmonth@caledoniamining.com • Nomadand JointAIMBroker:Numis Securities Tel +442072601000 • JointAIMBroker:WHIreland Tel +442072201751 UKCorporateand InvestorRelations GrahamHerring,AdamLloyd Tel: +442076539850 Research:EdisonInvestmentResearch www.edisoninvestmentresearch.co.uk/research

  25. QUESTIONS

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