Commenting on the results for 2013, Stefan Hayden, Caledonia's President and CEO said:

"2013 was a challenging year due to the lower gold price. Nevertheless, Caledonia has produced a creditable set of operating results for the year. Caledonia's financial results were adversely affected by the impairment of the Nama copper and cobalt exploration project in Zambia. After adjusting for this and other unusual items, Caledonia's financial performance was in-line with expectations.

"Notwithstanding the lower gold price, Blanket's cash flows remain strong and Blanket has continued to implement its investment strategy which I am confident will, as planned, result in further increases in production and underpin Blanket's position as one of Africa's lowest cost gold producers."

"Gold production in 2013 remained slightly ahead of 2012 and was also ahead of our guidance.

"Blanket's on-mine cash cost increased in Q4 compared to the previous quarter, however this was largely due to the higher work-in-progress at December 31, 2013. As a measure of Blanket's continued cost efficiency, the cost per tonne processed in 2013 fell from US$75.90 to US$70.40.

"In the early part of 2014, the achieved grade in certain production areas became uneconomic and production in those areas was terminated. Production in the first quarter of 2014 was also adversely affected by the unscheduled requirement to replace the winding ropes on the main production shaft. Both of these factors had an adverse effect on gold production in the first quarter of 2014. New production areas have and are being developed and I am confident that the 2014 production target of 48,000 ounces will be achieved, with 52,000 ounces expected in 2015.

"Development and exploration work at our satellite projects, GG and Mascot, has established the existence of multiple mineralized zones with potentially economic gold grades. Further work is being done to define the extent and viability of these mineralized zones.

"Under new Zimbabwean legislation, from the beginning of 2014 Blanket is required to sell its gold production to Fidelity Printers and Refiners. The new sales arrangements with Fidelity have reduced Blanket's working capital requirement due to the earlier payment terns. Blanket has received all payments due from Fidelity in-full and on-time.

"Zimbabwe offers some highly attractive investment opportunities, both at Blanket Mine (including the Satellite Projects) and elsewhere, which have the potential to generate substantial returns for all stakeholders. However, in light of the increased credit risk associated with the requirement to sell gold to Fidelity, Caledonia will actively consider other suitable investment opportunities with a view to using its resources outside Zimbabwe to optimise shareholder value."