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About Caledonia

Blanket Mine, Zimbabwe

Caledonia is an exploration, development and mining company focused on Southern Africa. Caledonia's primary asset is a 49% interest in the Blanket Mine in Zimbabwe which produced over 50,351 ounces of gold in 2016 at an All in Sustaining Cost of US$952/oz. for the first 3 quarters of 2016

The Blanket gold mine re-started production in April 2009 after a temporary shut-down due to the economic difficulties in Zimbabwe. In late 2010, Blanket successfully completed an expansion project which increased production capacity from 24,000 ounces of gold per annum to 40,000 ounces of gold per annum.

As an indigenised entity, Blanket can implement its long term growth strategy. The Blanket board, which includes representatives of the Indigenous Zimbabwean shareholders, approved a capital investment programme for a 4 year growth strategy for 2014 to 2017. This investment programme, which was endorsed by the Caledonia Board, is estimated at US$65 million, will be funded from Blanket's internally generated cash, and is expected to result in progressive increases in gold production.

Blanket is engaged in the exploration of the down-dip extensions of the known ore bodies and the first two satellite exploration projects which are within trucking distance of the Blanket metallurgical recovery plant.

Blanket's metallurgical plant has substantial surplus capacity. Increased production arising from increased mining throughput could therefore be processed with moderate capital investment and incurring only consumable costs to treat any increased throughput.

Caledonia has a strong, experienced management team and Board of Directors with diverse expertise in gold production, exploration, mine development, finance and marketing. Caledonia's management team is based in Johannesburg, South Africa, London, United Kingdom and Jersey, Channel Islands.

Caledonia paid its initial dividend in February 2012. On April 4, 2013 Caledonia announced an annual dividend in respect of the year to December 31, 2012. On November 25, 2013 Caledonia announced that in 2014 it intends to pay an annual aggregate dividend of 6 Canadian cents per common share, payable on a quarterly basis. The first quarterly dividend of 1.5 Canadian cents per common share was declared and paid in January 2014. Further quarterly dividends have bene paid thereafter. On December 16, 2015, Caledonia announced that henceforth it would report its financial results in United States Dollars. The dividend paid at the end of January 2016 was therefore denominated in United States Dollars. In Q3 of 2016 Caledonia increased its quarterly dividend from 1.125 US cents per share to 1.375 US cents per share, an increase of 22%. The quarterly dividend of 1.375 US cents is Caledonia's revised policy and represents an annual dividend of 5.5 US cents. The Caledonia Board will continue to review dividends which will depend on the performance of the company and its capital investment requirements.