Caledonia Mining Corporation : Exercise of Options

Suite 1201 ? 67 Yonge Street ? Toronto Ontario ? Canada ? M5E 1J8 Tel: [phone]

Fax: [phone] www.caledoniamining.com

Exercise of Options Toronto, Ontario January 23, 2013: 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.

For more information, please contact: Caledonia Mining Corporation

Mark Learmonth
Tel: + 27 11 447 2499 [e-mail]

Canaccord Genuity Limited Andrew Chubb / Sebastian Jones Tel: + 44 20 7523 8350 Newgate Threadneedle

Terry Garrett /Beth Harris/Graham Herring
Tel: [phone]

CHF Investor Relations

Jeremy Hill
Tel : [phone] x 238 [e-mail]