<SEC-DOCUMENT>0001137171-10-000738.txt : 20111007
<SEC-HEADER>0001137171-10-000738.hdr.sgml : 20111007
<ACCEPTANCE-DATETIME>20101210155742
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001137171-10-000738
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20101210

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALEDONIA MINING CORP
		CENTRAL INDEX KEY:			0000766011
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A1
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1201 - 67 YONGE STREET
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M5E 1J8
		BUSINESS PHONE:		4163699835

	MAIL ADDRESS:	
		STREET 1:		SUITE 1201 - 67 YONGE STREET
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M5E 1J8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GOLDEN NORTH RESOURCE CORP
		DATE OF NAME CHANGE:	19920302
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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<TITLE>MD Filed by Filing Services Canada Inc.&nbsp; (403) 717-3898</TITLE>
<META NAME="author" CONTENT="Steve Poad">
<META NAME="date" CONTENT="12/10/2010">
</HEAD>
<BODY style="margin-top:0;font-family:Times New Roman; font-size:10pt; color:#000000">
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<P style="margin:0px" align="center"><img src="correspondence002.gif" alt="[correspondence002.gif]" align=top height=54.733 width=54.733></P>
<P style="margin:0px"><BR></P>
<P style="text-indent: 250; font-family: Arial; font-size: 9pt; margin: 0px">&nbsp;</P>
<P style="text-indent: 250; font-family: Arial; font-size: 9pt; margin: 0px" align="left">&nbsp;</P>
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        <p align="center" style="font-size: 20pt; margin: 0px; padding-left: 96px"><B>CALEDONIA MINING CORPORATION</B>
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      <td / width="373"><B>SUITE 1710<br>
        1177 WEST HASTINGS STREET<br>
        VANCOUVER, B.C., CANADA V6E 2L3<br>
        TEL 1 604 640 6357<br>
        FAX 1 604 681-0139</B>
      <td width="552" />
      <td width="191" /><B>P O BOX 834<br>
        SAXONWOLD 2132<br>
        SOUTH AFRICA<br>
        TEL. 27 11 447 2499<br>
        FAX. 27 11 447 2554</B>
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      <td width="552" />
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<P style="margin:0px; clear:left"><BR></P>
<P style="margin:0px; clear:left">&nbsp;</P>
<P style="margin:0px; clear:left">&nbsp;</P>
<P style="margin:0px; font-family:Arial">&nbsp;</P>
<P style="margin:0px; font-family:Arial">December 8, 2010</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial">Securities and Exchange Commission</P>
<P style="margin:0px; font-family:Arial">Washington D.C. </P>
<P style="margin:0px; font-family:Arial">20549</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial">Attention: Mr. K. Hiller</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial"><B><U>Re: Caledonia Mining Form 20-F File No. 000-13345</U></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial">Dear Mr. Hiller</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial">We refer to your letter dated November 19, 2010.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>We confirm that our financial statements reflect amortization of costs for mining property and equipment for each period. &nbsp;</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>The depreciation of the Blanket Mine has been calculated based on a straight-line basis over the estimated 15 year life of the mine. </P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>The unit-of-production method you referred to and is disclosed in our significant accounting policies was used in the past for another producing mine which was sold in a prior period. &nbsp;The unit-of-production method is also not being used for the Blanket Mine because the total reserves were not determinable because ore bearing structures of the Mine are open at depth and laterally,</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>A 15 year amortization period has been used for the Blanket Mine based on the Company&#146;s initial estimate of the life of the mine, the chronic economic conditions in Zimbabwe, the periodic electricity supply issues, lack of sufficient working capital funding, extensive capital expenditure requirements to off-set historic underspending and expectations on the Company&#146;s ability to operate this mine at an optimal level. </P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>The financial statements do not clearly enough present the accounting policy and we will amend the disclosure of this policy in the 2010 annual financial statements. &nbsp;The Company will continue to monitor the appropriateness of its amortization method for the Blanket Mine as we obtain additional information in the future.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>The amortization calculations based on the fifteen year straight-line calculation, as disclosed in Note 3 of the 2009 financial statements, are as follows:</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial; float:left">2009</P>
<P style="margin-top:0px; margin-bottom:-2px; width:240px; font-family:Arial; float:left">$5,006 /15 + amortization on additions </P>
<P style="margin:0px; text-indent:-2px; font-family:Arial" align=justify>= $340K</P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial; clear:left; float:left">2008</P>
<P style="margin-top:0px; margin-bottom:-2px; width:240px; font-family:Arial; float:left">$4,951 /15 + amortization on additions</P>
<P style="margin:0px; text-indent:-2px; font-family:Arial" align=justify>= $303K</P>
<P style="margin:0px; clear:left" align=justify><BR></P>
<P style="margin:0px; font-family:Arial" align=justify>We trust this answers your questions.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; font-family:Arial">Yours sincerely</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:48px; font-family:Arial"><I>&#147;S.R. Curtis&#148;</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial">S R Curtis</P>
<P style="margin:0px; font-family:Arial">VP Finance and Chief Financial Officer</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
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