<SEC-DOCUMENT>0001137171-13-000136.txt : 20130402
<SEC-HEADER>0001137171-13-000136.hdr.sgml : 20130402
<ACCEPTANCE-DATETIME>20130402160016
ACCESSION NUMBER:		0001137171-13-000136
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20130331
FILED AS OF DATE:		20130402
DATE AS OF CHANGE:		20130402

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:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-13345
		FILM NUMBER:		13735251

	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>6-K
<SEQUENCE>1
<FILENAME>caledonia6k03282013.htm
<DESCRIPTION>CALEDONIA MINING CORPORATION - 6-K
<TEXT>
<HTML>
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     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">&nbsp;</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">FORM 6-K</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">SECURITIES AND EXCHANGE COMMISSION</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Washington, DC 20549</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">&nbsp;</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Report of Foreign Private Issuer</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Pursuant to Rule 13a-16 or 15d-16</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Of the Securities Exchange Act of 1934</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">For the month of
March 2013</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">Commission File Number: 000-13345</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">&nbsp;</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">CALEDONIA MINING CORPORATION</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">(Translation of registrant&rsquo;s name into
English)</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">1710 &ndash; 1177 West Hastings Street</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Vancouver, British Columbia V6E 2L3</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Canada</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">(Address of principal executive offices)</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">Indicate by check mark whether the registrant
files or will file annual reports under cover Form 20-F or Form 40-F</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">Form 20-F___<U>x</U>___ Form 40-F _____</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">Indicate by check mark whether by furnishing
the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">Yes ____ No&nbsp;&nbsp; <U>x&nbsp;&nbsp;</U></font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">If &ldquo;Yes&rdquo; is marked, indicate below
the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><font face="Times New Roman">Signatures</font></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-weight: bold"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">Caledonia Mining Corporation</FONT></font></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD>
    <TD COLSPAN="3" STYLE="line-height: 115%"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Registrant)</FONT></font></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 27%; line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD>
    <TD STYLE="width: 1%; line-height: 115%"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">By:</FONT></font></TD>
    <TD STYLE="width: 47%; line-height: 115%; text-decoration: underline; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">/s/&nbsp; Carl Jonsson</font></TD>
    <TD STYLE="width: 25%; line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD>
    <TD COLSPAN="3" STYLE="line-height: 115%"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-style: normal; font-variant: normal; font-weight: normal; font-size: 10pt">Name: &nbsp;Carl Jonsson</FONT></font></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD>
    <TD COLSPAN="2" STYLE="line-height: 115%"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">Title: &nbsp;&nbsp;&nbsp;Director and Secretary</FONT></font></TD>
    <TD STYLE="line-height: 115%; font-family: Times New Roman, Times, Serif"><font face="Times New Roman">&nbsp;</font></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">Dated:
April 1, 2013</font></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font face="Times New Roman">&nbsp;</font></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>





<P STYLE="text-align: center; margin: 0">&nbsp;</P>



<P STYLE="text-align: center; margin: 0">&nbsp;</P>

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<P STYLE="text-align: center; margin: 0"><B><font face="Times New Roman">Exhibit Index</font></B></P>

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   <td width="10%"><font size="2" face="Times New Roman">Exhibit</font></td>
   <td width="90%"><font size="2" face="Times New Roman">Description</font></td>
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   <td width="10%"></td>
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   <td width="10%"></td>
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   <td width="10%"><font size="2" face="Times New Roman">99.1</font></td>
   <td width="90%"><font size="2" face="Times New Roman"><a href="newsrelease.htm">News
    Release dated March 28,2013</a></font></td>
  </tr>
  <tr>
   <td width="10%"><font size="2" face="Times New Roman">99.2</font></td>
   <td width="90%"><font size="2" face="Times New Roman"><a href="mda.htm">Caledonia
    Mining Corporation Management's Discussion and Analysis March 28, 2013</a></font></td>
  </tr>
  <tr>
   <td width="10%"><font size="2" face="Times New Roman">99.3</font></td>
   <td width="90%"><font size="2" face="Times New Roman"><a href="afs.htm">Annual
    Financial Statements as at December 31, 2012</a></font></td>
  </tr>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>2
<FILENAME>afs.htm
<DESCRIPTION>ANNUAL FINANCIAL STATEMENTS AS AT DECEMBER 31, 2012
<TEXT>
<HTML>
<HEAD>
     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>



<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; background-color: black; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border: windowtext 1pt solid; font: 12pt/115% Shruti; padding-top: 4pt; padding-bottom: 4pt; color: white"><FONT STYLE="font: 12pt/115% Shruti,sans-serif; color: white">MANAGEMENT&rsquo;S RESPONSIBILITY FOR FINANCIAL INFORMATION</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>To the Shareholders of Caledonia
Mining Corporation:</B></P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Management has prepared the information
and representations in this annual report. The consolidated financial statements of Caledonia Mining Corporation (&ldquo;Company&rdquo;)
have been prepared in conformity with International Financial Reporting Standards (&ldquo;IFRS&rdquo;) and, where appropriate,
these statements include some amounts that are based on best estimates and judgment. Management has determined such amounts on
a reasonable basis in order to ensure that the consolidated financial statements are presented fairly, in all material respects.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Financial information used elsewhere
in the Annual Report is consistent with that in the consolidated financial statements. The Management Discussions and Analysis
(MD&amp;A) also includes information regarding the impact of current transactions and events, sources of liquidity and capital
resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment
of this information because future events and circumstances may not occur as expected.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The Company maintains adequate
systems of internal accounting and administrative controls, consistent with reasonable cost. Such systems are designed to provide
reasonable assurance that relevant and reliable financial information is produced. Our independent auditor has the responsibility
of auditing the annual consolidated financial statements and expressing an opinion on them.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Management have concluded that
as a result of the relatively small size of the Company&rsquo;s head office finance department personnel, the Internal Controls
over Financial Reporting (&ldquo;ICFR&rdquo;) assessment concluded that there were limited resources to adequately segregate duties
and to permit or necessitate the comprehensive documentation of all policies and procedures that form the basis of an effective
design of ICFR. An internal audit department has been added to the administration department at Blanket Mine to enforce and test
adherence to the ICFR.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">In order to mitigate the risk of
material misstatement in the Company&rsquo;s consolidated financial statements, the Company implemented additional cash flow review
and monitoring controls at head office on a monthly basis and as part of their monitoring and oversight role the Audit Committee
performs additional analysis and other post-closing procedures. No material exceptions were noted based on the additional year
end procedures and no evidence of fraudulent activity was found.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The Board of Directors, through
its Audit Committee, is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal
control. The Audit Committee is composed of five unrelated directors. This Committee meets periodically with management and the
external auditor to review accounting, auditing, internal control and financial reporting matters.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The consolidated financial statements
have been audited on behalf of the shareholders by the Company&rsquo;s independent auditor, BDO Canada LLP, in accordance with
Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).
The independent auditor&rsquo;s report outlines the scope of their examination and their opinion on the consolidated financial
statements.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">The consolidated financial statements for the year ended
December 31, 2012 were approved by the Board of Directors and signed on its behalf on March 26, 2013.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">(Signed) S. E. Hayden&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;(Signed) S. R. Curtis</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">President and Chief Executive Officer&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice-President,
Finance and Chief Financial Officer</P>


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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"><B>Caledonia Mining Corporation</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt/115% Times New Roman, Times, Serif; margin-top: 0; border-top: Black 1.5pt solid; margin-bottom: 0; text-align: right"><B>INDEPENDENT
AUDITOR'S REPORT</B></P>

<P STYLE="font: 14pt/115% Times New Roman, Times, Serif; margin-top: 0; text-align: right; margin-bottom: 0; border-bottom: Black 1.5pt solid"><B>OF
REGISTERED PUBLIC ACCOUNTING FIRM</B></P>

<P STYLE="font: 11pt/0.9pt Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>To the shareholders of Caledonia
Mining Corporation</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">We have audited the accompanying
consolidated financial statements of Caledonia Mining Corporation, which comprise the consolidated statements of financial position
as at December 31, 2012 and 2011, and the consolidated statements of comprehensive income and (loss), changes in equity and cash
flows for the years ended December 31, 2012, 2011 and 2010, and a summary of significant accounting policies and other explanatory
information.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>Management's responsibility
for the consolidated financial statements</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Management is responsible for
the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due
to fraud or error.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>Auditor's responsibility</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian
generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">We believe that the audit evidence
we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>Opinion</B></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Caledonia
Mining Corporation as at December 31, 2012 and 2011, and its financial performance and its cash flows for the years ended December
31, 2012, 2011 and 2010, in accordance with International Financial Reporting Standards</FONT> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">as
issued by the International Accounting Standards Board.</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">(Signed) BDO Canada LLP</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Chartered Accountants, Licensed Public
Accountants</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">Toronto, Ontario</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">March 26, 2013</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>


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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>



<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-collapse: collapse; font: 11pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD NOWRAP COLSPAN="7" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 14pt/normal Times New Roman, Times, Serif; margin: 0"><B>Consolidated statements of comprehensive income and (loss)</B></P>
        <P STYLE="font: 14pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="7" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(In thousands of Canadian dollars except for earnings per share amounts)</I></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 53%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>For the years ended December 31,</I></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 7%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Note</I></B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Revenue</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>75,221</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55,705</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">22,388</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Less: Royalty</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,261)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,514)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(825)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Production costs</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>8</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(25,653)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(21,093)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(12,617)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,392)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,983)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,586)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Gross profit</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>40,915</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">29,115</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,360</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Administrative expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>9</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4,055)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,351)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,807)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payment expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>20</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(14,569)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,101)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(354)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Indigenisation expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>5</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,700)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(326)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange (loss)/gain</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">303</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">359</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>13</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(330)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other (expenses)/income</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>10</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,064)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Results from operating activities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>20,257</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">20,756</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,494</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>11</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>79</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">270</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance cost</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>11</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(217)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(267)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Net finance (costs)/income</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(81)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(162)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Profit before income tax</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>20,176</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">20,594</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,497</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income and other tax expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>12</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(12,818)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(8,464)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,042)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Profit for the year</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Other comprehensive (loss)/income</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Revaluation of investments to fair value</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(45)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign currency translation differences for foreign operations</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,589)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">265</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,404)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Other comprehensive income for the year, net of income tax</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,589)</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">265</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,449)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total comprehensive income for the year</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,769</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Profit/(loss) attributable to:</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Shareholders of the Company</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>8,720</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,362)</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Profit for the year</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total comprehensive (loss)/income attributable to:</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Shareholders of the Company</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,112</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,343)</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total comprehensive income for the year</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,769</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Earnings per share </B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Basic earnings per share</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>18</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.0172</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.024</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.003</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Diluted earnings per share</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.0172</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.024</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.003</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="7" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>



<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-size: 14pt; font-weight: bold"><FONT STYLE="font: 14pt Times New Roman, Times, Serif; color: black"><B>Consolidated statements of financial position</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(In thousands of Canadian dollars)</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>December 31,</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">December 31,</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>As at </I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Note</I></B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Assets</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>13</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>36,471</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">33,918</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Deferred tax asset</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>12</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>62</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">325</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total non-current assets</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>36,533</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">34,243</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>14</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,508</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,482</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Prepayments</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>126</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">334</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other receivables</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>15</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,718</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,657</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Cash and cash equivalents</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>16</I></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,686</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total current assets</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>35,294</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">18,159</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total assets</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1.5pt double; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>71,827</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1.5pt double; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">52,402</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Equity and liabilities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share capital</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>17</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>197,137</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">196,163</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Reserves</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>13,677</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,273</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Accumulated deficit </FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(153,399)</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(158,422)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Equity attributable to shareholders</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>57,415</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">40,014</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-controlling interest</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,796)</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total equity</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>55,619</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">40,014</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Liabilities</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Provisions</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>21</I></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,015</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,785</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Deferred tax liability</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>12</I></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,913</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,037</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total non-current liabilities</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>6,928</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,822</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other payables</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>22</I></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,775</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,841</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe advance dividend accrual</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>5</I></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,987</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income taxes payable</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,518</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">295</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bank overdraft</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>16</I></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">430</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total current liabilities</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,280</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,566</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total liabilities</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>16,208</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,388</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total equity and liabilities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1.5pt double; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>71,827</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1.5pt double; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">52,402</FONT></TD></TR>
<TR>
    <TD STYLE="width: 49%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 18%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">On behalf of the Board:</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&ldquo;S.E. Hayden&rdquo;&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&ldquo;Robert W. Babensee&rdquo;&#9;Director</P>


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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>&nbsp;</B></P>





<P STYLE="font: 14pt/normal Times New Roman, Times, Serif; margin: 0"><B>Consolidated statements of changes in equity</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>(In
thousands of Canadian dollars</I></FONT><I>)&#9;</I></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="vertical-align: top; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-style: italic; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Note</I></B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Share capital</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Investment Revaluation Reserve</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Translation reserve</B></FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>Share based payment reserve</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Accumulated deficit</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Non-controlling interest (NCI)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total Equity</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance at January 1, 2010</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">196,125</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">50</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1,952</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(172,007)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">26,120</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">26,120</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Comprehensive income/(loss) for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(45)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(1,404)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1,455</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">6</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based compensation expense</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>20</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">354</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">354</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">354</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance at December 31, 2010</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">196,125</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">5</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(1,404)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">2,306</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(170,552)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">26,480</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">26,480</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Comprehensive income for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">265</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">12,395</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Shares issued</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">38</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">38</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">38</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based compensation expense</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>20</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1,101</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1,101</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1,101</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance at December 31, 2011</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">196,163</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">5</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(1,139)&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">3,407</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(158,422)&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">40,014</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">40,014</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Comprehensive income for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(1,608)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">8,720</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">7,112</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(1,343)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">5,769</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based compensation expense</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>20</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">408</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">408</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">408</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Shares issued</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">974</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">974</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">974</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based expense on Indigenisation Transaction</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>5</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">11,867</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">11,867</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">2,294</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">14,161</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Advance dividend paid to NCI</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(5,707)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(5,707)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Changes in relative ownership interests in subsidiaries</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Blanket Mine</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>5</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">737</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(3,697)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">(2,960)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">2,960</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance at December 31, 2012</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>197,137</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>5</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>(2,010)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>15,682</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>(153,399)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>57,415</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>(1,796)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>55,619</B></FONT></TD></TR>
</TABLE>


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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 14pt; font-weight: bold"><FONT STYLE="font: 14pt Times New Roman, Times, Serif; color: black"><B>Consolidated statements of cash flows</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(In thousands of Canadian dollars)</I></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>For the years ended December 31,</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Note</I></B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Cash flows from operating activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Profit for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Adjustments to reconcile net cash from operations</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>23</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>31,099</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">16,648</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,210</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Changes in non-cash working capital</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>23</I></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,963</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,183)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">950</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest received</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>79</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest paid</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(162)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Tax paid</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(11,618)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(8,005)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Cash from operating activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>29,721</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">17,428</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,611</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Cash flows from investing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Property, plant and equipment additions</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(7,909)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(8,528)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(7,304)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Proceeds on sale of property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>38</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">51</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Net cash used in investing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(7,871)</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(8,528)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(7,253)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Cash flows from financing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bank overdraft increase (decrease)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(430)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(317)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">159</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Advance dividend paid</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>5</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,739)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Proceeds from the exercise of share options</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>17</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>974</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">38</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Net cash from (used in) financing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,195)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(279)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">159</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Net increase/(decrease) in cash and cash equivalents</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>18,655</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,621</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(483)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Cash and cash equivalents at beginning of year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,686</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,145</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,622</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Effect of exchange rate fluctuations on cash held</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(399)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(80)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Cash and cash equivalents at year end</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>16</I></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,686</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,145</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>&nbsp;</B></P>


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    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>1&#9;Reporting entity</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Caledonia Mining Corporation
is a company domiciled in Canada. The address of the Company&rsquo;s registered office is Suite 1201, 67 Yonge Street, Toronto,
Ontario M5E 1J8 Canada. The consolidated financial statements of the Company as at and for the year ended December 31, 2012 comprises
the Company and its subsidiaries (together referred to as the &ldquo;Group&rdquo; or &ldquo;Company&rdquo; and individually as
&ldquo;Group entities&rdquo;). The Group is primarily involved in the operation of a gold mine and the acquisition, exploration
and development of mineral properties for the exploration of base and precious metals.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>2&#9;Basis for preparation</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(a) Statement of compliance</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The consolidated financial
statements were authorised for issue by the Board of Directors on March 26, 2013.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(b) Basis of measurement</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The consolidated financial
statements have been prepared on the historical cost basis except for the following items in the statement of financial position:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">available for sale financial assets are
measured at fair value</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">equity-settled share-based payment arrangements
are measured at fair value on grant date.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 40.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(c) Presentation currency</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">These consolidated financial
statements are presented in the Canadian dollar, which is the functional currency of Caledonia Mining Corporation. All financial
information presented in the Canadian dollar has been rounded to the nearest thousand.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify"><B>(d) Comparative figures</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">The 2010 comparative figures
presented in the consolidated statements of comprehensive income and (loss), changes in equity and cash flows and the related notes
are provided solely as a result of the requirements of item 8(2) of the Form 20-F as required by the United States Securities and
Exchange Commission. IFRS requires that an additional comparative statement of financial position only be presented in the event
of a material prior year reclassification, restatement or retrospective change in accounting policy.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify"><B>3&#9;Use of estimates
and judgements</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">Management makes estimates
and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and assumptions are continually
evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The effect of a change
in an accounting estimate is recognized prospectively by including it in comprehensive income in the period of the change, if the
change affects that period only, or in the period of the change and future periods, if the change affects both.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">Information about critical
judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts
of assets and liabilities recognized in the consolidated financial statements are also discussed below:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">The indigenisation transaction
at Blanket Mine required management to make significant judgements and assumptions, refer Note 5.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">i)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B>Site Restoration Provisions</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">Site restoration provisions
have been created based on the independent analysis of the rehabilitation costs at Blanket Mine and internal assessments for Eersteling
Gold Mine. Estimates and assumptions are made when determining the inflationary effect on current restoration costs and the discount
rate to be applied in arriving at the present value of the provision. Assumptions, based on the current economic environment, have
been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into
account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually
and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and
techniques will result in changes to provisions from period to period. Actual rehabilitation costs will ultimately depend on future
market prices for the rehabilitation costs which will reflect the market condition at the time the rehabilitation costs are actually
incurred.&nbsp; The final cost of the currently recognized site rehabilitation provisions may be higher or lower than currently
provided for.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">ii)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B>Exploration and Evaluation (&ldquo;E&amp;E&rdquo;) Expenditure</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The application of the Company&rsquo;s
accounting policy for exploration and evaluation expenditures requires judgements when determining which expenditures are recognised
as exploration and evaluation assets (&ldquo;E&amp;E properties&rdquo;).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The Company also makes estimates
and assumptions regarding the possible impairment of E&amp;E properties by evaluating whether it is likely that future economic
benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions
made may change if new information becomes available. If, after expenditures are capitalized, information becomes available suggesting
that the recovery of expenditures is unlikely, the amount capitalized is written off in profit or loss in the period the new information
becomes available.</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify"><B>3&#9;Use of estimates
and judgements- (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The recoverability of the
carrying amount of the South African and Zambian mineral properties (if not impaired) is dependent upon the availability of sufficient
funding to bring the properties into commercial production, the price of the products to be recovered, the exchange rate of the
local currency relative to the US dollar and the undertaking of profitable mining operations. As a result of these uncertainties,
the actual amount recovered may vary significantly from the carrying amount.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">iii)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B>Title to Mineral Property Interests</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">Although the Company has
taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company&rsquo;s
title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">iv)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B>Income Taxes</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">Significant estimates and
assumptions are required in determining the provision for income taxes. There are many transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax determination is uncertain. The Company records its best estimate
of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately
provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than
the amount included in the tax liabilities.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">In addition, the Company
applies judgement in recognizing deferred tax assets relating to tax losses carried forward to the extent that there are sufficient
taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against
which the unused tax losses can be utilized or sufficient estimated taxable income against which the losses can be utilized. However,
utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses
are recouped.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">v)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B>Share-based Payment Transactions</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">The Company measures the
cost of equity-settled, share based payment transactions with employees as well as with Indigenisation Shareholders (refer note
5 and 20) by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value
for share-based payment transactions requires determining the most appropriate valuation model, considering the terms and conditions
of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected
life of the share option, volatility and dividend yield. Additional information about significant judgements and estimates and
assumptions for estimating fair value for share-based payment transactions are disclosed in note 20.</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Option pricing models require
the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions
can materially affect the fair value estimate, and</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify"><B>3&#9;Use of estimates
and judgements- (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">therefore the existing models
do not necessarily provide a reliable single measure of the fair value of the Group&rsquo;s stock options.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">vi)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="color: black"><B>Impairment</B></FONT></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">At each accounting period
end the Company determines if impairment indicators exist, and if present, performs an impairment review of the non-monetary assets
held in the Group. The exercise is subject to various judgement decisions and estimates. Financial assets are also reviewed regularly
for impairment. Further details of the judgements and estimates made for these reviews are set out in Note 4(g).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 0in">vii)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="color: black"><B>Functional currency</B></FONT></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">The functional currency of
each entity in the Group is determined after considering various primary and secondary indicators which require management to make
numerous judgement decisions. The determination of the functional currency has a bearing on the translation process and ultimately
other comprehensive income.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>4&#9;Significant accounting
policies</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The accounting policies
set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting
policies have been applied consistently by the Group entities.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">As a result of the implementation
of the Blanket Zimbabwe Indigenisation Transaction (refer to note 5), the accounting policies were expanded to include the following
policies in order to account for the transaction under IFRS:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.65pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Assessment of control of
subsidiaries and changes in shareholdings where control is maintained (refer note 4(a)(i))</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.65pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Consolidation of special
purpose entities (refer note 4(a)(ii))</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.65pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Short term employee benefits
relating to participation units awarded to employees (refer note 4(h)(ii))</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.65pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payment expenses
resulting from the Blanket Indigenisation Transaction (refer note 4(i)(ii)).</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>4&#9;Significant accounting
policies - (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The adoption of these policies
did not have an effect on the comparative figures previously reported.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(a) Basis of consolidation</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(i)
Subsidiaries</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Subsidiaries are entities
controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases. The accounting policies of Group entities have been changed when
necessary to align them with the policies adopted by the Group.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">In instances where the Group
owns less than 50% of the ordinary shares in a subsidiary, the Group also considers whether further indicators of control exist
above and beyond its effective shareholding.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Changes in the Group&rsquo;s
interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity
as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary and
no gain or loss is recognised in profit or loss.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in; text-align: justify"><B>(ii) Special purpose entities</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Special purpose entities (SPEs)
are entities that are created to accomplish a narrow and well-defined objective. An SPE is consolidated if, based on an evaluation
of the substance of its relationship with the Group and the SPE&rsquo;s risks and rewards, the Group concludes that it controls
the SPE. The following circumstances may indicate a relationship in which, in substance, the Group controls and consequently consolidates
an SPE.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The activities of the SPE
are being conducted on behalf of the Group according to its specific business needs so that the Group obtains benefits from the
SPE&rsquo;s operation.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The Group has the decision-making
powers to obtain the majority of the benefits of the activities of the SPE or, by setting up an &lsquo;autopilot&rsquo; mechanism,
the Group has delegated these decision-making powers.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The Group has rights to
obtain the majority of the benefits of the SPE and therefore may be exposed to risks incidental to the activities of the SPE.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The Group retains the majority
of the residual or ownership risks related to the SPE or its assets in order to obtain benefits from its activities. </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The assessment of whether the
Group has control over an SPE is carried out at inception and normally no further reassessment of control is carried out in the
absence of changes in the structure or terms of the SPE, or additional transactions between the Group and the SPE. Day-to-day operating
activities of the SPE normally do not lead to a reassessment of control. However, sometimes changes in operating activities may
alter the substance of the relationship between the Group and the SPE and in such</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>4&#9;Significant accounting
policies - (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">instances the Group determines
whether the change warrants a reassessment of control based on the specific facts and circumstances.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(iii)
Transactions eliminated on consolidation</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Intra-group balances and
transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated
financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment
to the extent of the Group&rsquo;s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(b) Foreign currency</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 31.35pt"><B>(i)
<I>Functional currencies</I></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">The functional
currencies of Caledonia Mining Corporation and its subsidiaries are the Canadian dollar, US dollar and South African Rand (&ldquo;ZAR&rdquo;).
These consolidated financial statements have been translated into the Canadian dollar in accordance with IAS 21 <I>The Effects
of Changes in Foreign Exchange Rates</I>. This standard requires that assets and liabilities be translated using the exchange rate
at period end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the
dates of the transactions (i.e. the average rate for the period).</FONT>When the settlement of a monetary item receivable from
or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising
from the item are considered to form part of the net investment in a foreign operation and are recognized in Other Comprehensive
Income (&ldquo;OCI&rdquo;).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">When an entity disposes of its entire
interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign
currency gains or losses accumulated in OCI related to the foreign operation are recognized in profit or loss. If an entity disposes
of part of an interest</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">in a foreign operation which remains a
subsidiary, a proportionate amount of foreign currency gains or losses accumulated in OCI related to the subsidiary are reallocated
between controlling and non-controlling interests.</P>

<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">All resulting translation differences
are reported in other comprehensive income.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify; text-indent: 30.95pt"><B><I>(ii)
Foreign currency translation</I></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">In preparing
the financial statements of the Group entities, transactions in currencies other than the Group entity&rsquo;s functional currency
(foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date,
monetary assets and liabilities are translated using the year end foreign exchange rate. Non-monetary assets and liabilities are
translated using the historical rate on the date of the transaction. All gains and losses on translation of these foreign currency
transactions are included in profit or loss for the year.</FONT></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>4&#9;Significant accounting
policies - (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(c) Financial instruments</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(i)
Non-derivative financial assets</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group initially recognises
loans and receivables on the date that they are originated. All other financial assets (including assets designated at fair value
through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions
of the instrument.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group derecognises a
financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of
the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised
as a separate asset or liability.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Financial assets and liabilities
are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right
to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group has the following
non-derivative financial assets: trade and other receivables, cash and cash equivalents, and available-for-sale financial assets.&#9;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><I>Loans and receivables</I></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 4.3pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Loans
and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less any impairment losses. </FONT>The impairment
loss on receivables is based on a review of all outstanding amounts at period end. Bad debts are written off during the year in
which they are identified. Interest income is recognized by applying the effective interest rate, except for short-term receivables
when the recognition of interest would be immaterial<FONT STYLE="font: 9pt/115% Verdana, Helvetica, Sans-Serif">.</FONT></P>

<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Cash and cash equivalents
comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are repayable on
demand and form an integral part of the Group&rsquo;s cash management are included as a component of cash and cash equivalents
for the purpose of the statement of cash flows.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><I>Available-for-sale financial
assets</I></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Available-for-sale financial
assets are non-derivative financial assets that are designated as available-for-sale or that are not classified in any other categories
of financial assets. The Group currently has an insignificant amount of investments in equity securities and certain debt securities
which are classified as available-for-sale financial assets.</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>4&#9;Significant accounting
policies - (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Subsequent to initial recognition,
they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for
sale equity instruments, are recognised in other comprehensive income and presented within equity in accumulated other comprehensive
income. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to profit
or loss.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(ii)
Non-derivative financial liabilities</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Financial liabilities (including
liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes
a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations
are discharged or cancelled or expire.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group has the following
non-derivative financial liabilities: bank overdrafts, Zimbabwe advance dividend accrual and trade and other payables.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Such financial liabilities
are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these
financial liabilities are measured at amortised cost using the effective interest method.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(d) Share capital</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><I>Common shares</I></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Common shares are classified
as equity. Incremental costs directly attributable to the issue of common shares and share options are recognised as a deduction
from equity, net of any tax effects.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(e) Property, plant and
equipment</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(i)
Recognition and measurement</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Items of property, plant
and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures
that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials
and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use,
the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying
assets.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Once the legal right to explore
a property has been acquired, costs directly related to exploration and evaluation expenditures (&ldquo;E&amp;E&rdquo;) are capitalized
in addition to the acquisition costs. These direct expenditures include such costs as materials used, surveying costs, drilling
costs, payments made to contractors, direct administrative costs and depreciation on plant and equipment during the exploration</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">phase. Costs not directly
attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year
in which they occur.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Once the technical feasibility
and commercial viability of extracting the mineral resource has been determined, the property is considered to be a mine under
development. Exploration and evaluation assets are tested for impairment before the assets are transferred to mine under development.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">All direct costs related
to the acquisition, exploration and development of mineral properties are capitalized until the properties to which they relate
are ready for their intended use, sold, abandoned or management has determined there to be impairment. If economically recoverable
ore reserves are developed, capitalized costs of the related property are reclassified as mineral properties being depleted.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Purchased software that
is integral to the functionality of the related equipment is capitalised as part of that equipment.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">When parts of an item of property,
plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant
and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment, and are recognised within other income in profit or loss.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(ii) Subsequent costs</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The cost of replacing a
part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of
the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit
or loss as incurred.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(iii) Depreciation</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Depreciation is calculated
over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation
is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant
and equipment, except for mineral properties, since this most closely reflects the expected pattern of consumption of the future
economic benefits embodied in the asset. On commencement of commercial production, depreciation of each mineral property and development
is provided for on the unit-of-production basis using estimated proven and probable reserves. Where the total reserves are not
determinable because ore bearing structures are open at depth or are open laterally, the straight-line method of depreciation is
applied over the estimated life of the mine. Land is not depreciated.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>4&#9;Significant accounting policies
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The estimated useful lives
for the current and comparative periods are as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">buildings 10 to 15 years</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">plant and equipment 10 years</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">fixtures and fittings including computers
4 to 10 years</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">motor vehicles 4 years</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Depreciation methods, useful
lives and residual values are reviewed at each financial year-end and adjusted if appropriate.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(f) Inventories</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Consumable stores are measured
at the lower of cost and net realisable value. The cost of consumable stores is based on the weighted average cost principle, and
includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing
them to their existing location and condition. In the case of gold in process, cost includes an appropriate share of production
overheads based on normal operating capacity. Net realisable value is the estimated selling price in the common course of business,
less the estimated costs of completion and selling expenses.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>(g) Impairment</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(i)
Financial assets (including receivables)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">A financial asset not carried
at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it
is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition
of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated
reliably.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Objective evidence that
financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy,
or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost provides objective evidence of impairment.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group considers evidence
of impairment for receivables at both the specific asset and collective level. All individually significant receivables are assessed
for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed
for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively
assessed for impairment by grouping together receivables with similar risk characteristics.</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">An impairment loss in respect of
a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value
of the estimated future cash flows discounted at the asset&rsquo;s original effective interest rate. Losses are recognised in profit
or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Impairment losses on available-for-sale
investment securities are recognised by transferring the cumulative loss that has been recognised in other comprehensive income
and presented in accumulated other comprehensive income in equity, to profit or loss. The cumulative loss that is removed from
other comprehensive income and recognised in profit or loss is the difference between the acquisition cost, net of any principal
repayment and amortisation, and the current fair value, less any impairment loss previously recognised in profit or loss. Changes
in impairment provisions attributable to time value are reflected as a component of interest income. If, in a subsequent period,
the fair value of an impaired available-for-sale debt security or receivable increases and the increase can be related objectively
to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the
amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale
equity security is recognised in other comprehensive income.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(ii)
Non-financial assets</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The carrying amounts of
the Group&rsquo;s non-financial assets, other than inventories, prepayments and deferred tax assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset&rsquo;s recoverable
amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. Fair value is considered to be the price that would be paid by a knowledgeable market participant. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the &ldquo;cash-generating
unit, or CGU&rdquo;).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group&rsquo;s corporate
assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable
amount is determined for the CGU to which the corporate asset belongs.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">An impairment loss is recognised if the
carrying amount of a CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment
losses recognised in respect of</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>4&#9;Significant accounting policies
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">CGUs are allocated to reduce
the carrying amount of other assets in the unit (group of units) on a <I>pro rata </I>basis. Impairment losses recognised in prior
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been an indication of reversal and a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset&rsquo;s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The test for recoverability
of E&amp;E assets can combine several CGUs as long as the combination is not larger than a segment. The definition of a CGU does,
however, change once development activities have begun. There are special impairment triggers for E&amp;E assets. Despite certain
relief in respect of impairment triggers and the level of aggregation, the impairment standard is applied in measuring the impairment
of E&amp;E assets. Reversals of impairment losses are permitted in the event that the circumstances that resulted in impairment
have changed.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">E&amp;E assets are only assessed
for impairment when facts and circumstances suggest that the carrying amount of an E&amp;E asset may exceed its recoverable amount
and upon transfer to development assets (therefore there is no requirement to assess for indication at each reporting date until
the entity has sufficient information to reach a conclusion about the commercial viability and technical feasibility of extraction).
Indicators of impairment include the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.3pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The entity's right to explore in the specific
area has expired or will expire in the near future and is not expected to be renewed</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.3pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Substantive expenditure on further E&amp;E
activities in the specific area is neither budgeted nor planned</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.3pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The entity has not discovered commercially
viable quantities of mineral resources as a result of E&amp;E activities in the area to date and has decided to discontinue such
activities in the specific area</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.3pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Even if development is likely to proceed,
the entity has sufficient data indicating that the carrying amount of the asset is unlikely to be recovered in full from successful
development or by sale</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(h) Employee benefits</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>(i)
Defined contribution plans</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">A defined contribution plan
is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal
or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised
as an employee benefit expense in profit or loss in the periods during which services are rendered by</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>4&#9;Significant accounting policies
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">employees. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a
defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service
are discounted to their present value.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 30.8pt"><B>(ii)
Short term employee benefits</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The cost of all short term
employee benefits is recognised during the period in which the employee renders the related service.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Any benefits accruing to
employees by virtue of them holding participation units in the Blanket Mine Employee Trust (Employee Trust) are recognised as short
term employee benefit expenses (profit sharing arrangement) <FONT STYLE="color: black">at the earlier of a constructive obligation
arising or </FONT>when dividends are declared to Blanket Employee Trust Services (Private) Limited (BETS).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(i) Share-based payment
transactions</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in; text-align: justify"><B>(i) Share-based payment
relating to employees and directors</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The grant date fair value
of share-based payment awards granted to employees and directors is recognised as an expense, with a corresponding increase in
equity, over the vesting period of the award. The amount recognised as an expense is adjusted to reflect the number of awards for
which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised
as an expense is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting
date.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Where the terms and conditions
of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after
the modification, is also charged to the statement of comprehensive income over the remaining vesting period or immediately for
awards already vested.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Where equity instruments
are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of comprehensive
income.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in; text-align: justify"><B>(ii) Share-based payment
relating to the Indigenisation Transaction</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><FONT STYLE="color: black">The
grant date fair value of </FONT>equity-settled share-based payment transactions with Indigenisation Shareholders (note 5)<FONT STYLE="color: black">
is recognised immediately as an expense in the statement of comprehensive income, with a corresponding increase in equity, when
the transaction becomes effective.</FONT></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>4&#9;Significant accounting policies
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(j) Provisions</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">A provision is recognised
if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the liability. The unwinding of the discount is recognised as finance cost.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(k) Site restoration</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Company recognises liabilities
for statutory, contractual, constructive or legal obligations associated with the retirement of property, plant and equipment,
when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present
value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized
to mineral properties along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates
using a pre-tax rate that reflects the time value of money and are related to the provision are used to calculate the net present
value. The Company&rsquo;s estimates of rehabilitation costs, which are reviewed annually, could change as a result of changes
in regulatory requirements, discount rates, effects of inflation and assumptions regarding the amount and timing of the future
expenditures. These changes are recorded directly to mineral properties with a corresponding entry to the rehabilitation provision.
Changes resulting from production are charged to profit and loss for the period. The costs of rehabilitation projects that were
included in the rehabilitation provision are recorded against the provision as incurred. The cost of on-going current programs
to prevent and control pollution is charged against profit and loss as incurred.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(l) Revenue</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 0.1in; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">Revenue
from the sale of precious metals is recognized when the metal is accepted at the refinery, risk and benefits of ownership are transferred
and the receipt of proceeds is substantially assured. </FONT></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(m) Finance income and
finance costs</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Finance income comprises
interest income on funds invested and gains on the disposal of available-for-sale financial assets. Interest income is recognised
as it accrues in profit or loss, using the effective interest method. Finance costs comprise interest expense on the rehabilitation
provisions and impairment losses recognised on financial assets and also includes interest on bank overdraft balances.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Borrowing costs that are
not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss
using the effective interest method.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(n) Income tax</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Income tax expense comprises
current and deferred tax. Current tax and deferred tax expense are recognised in profit or loss except to the extent that it relates
to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected
tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting
date. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities
to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates
that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Deferred tax assets and
liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets
and liabilities on a net basis.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>(o) Earnings per share</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group presents basic
and diluted earnings per share (EPS) data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable
to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for
own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted
average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares,
which comprise share options granted to employees and directors as well as any dilution in group earnings originating from dilutive
partially recognised non-controlling interests at a subsidiary level.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0 0 13pt">(p) Standards, amendments and interpretations issued
but not yet effective</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 13pt; text-align: justify"><FONT STYLE="font-weight: normal">There
are new or revised Accounting Standards and Interpretations in issue that are not yet effective. Management have considered all
of these Standards and Interpretations and have concluded that those that may have an impact on future consolidated financial statements
are the following:</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: center"><B>Standard/Interpretation</B></P></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><B>Effective date*</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: justify; text-justify: inter-ideograph">IFRS 9 </TD>
    <TD STYLE="width: 53%; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; border-right: windowtext 1pt solid; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Financial Instruments</I></TD>
    <TD STYLE="width: 23%; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; border-right: windowtext 1pt solid; text-align: left; text-justify: inter-ideograph">January 1, 2015</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: justify; text-justify: inter-ideograph">IFRS 10</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Consolidated Financial Statements</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: justify; text-justify: inter-ideograph">IFRS 12</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Disclosure of Interests in Other Entities</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: justify; text-justify: inter-ideograph">IFRS 13</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Fair Value Measurement</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: justify; text-justify: inter-ideograph">IAS 1 amendments</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Presentation of Financial Statements</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">July 1, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: justify; text-justify: inter-ideograph">IAS 19 amendments</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Employee Benefits</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">IAS 32 &amp; IFRS 7 amendments</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Financial Instruments: Presentation &amp; Financial Instruments: Disclosures</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">1 January 1, 2014 and January 1, 2013 respectively</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">IFRIC 20 </TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Stripping Cost in the Production Phase of a Surface Mine</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">Annual Improvements 2009-2011 cycle</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; font-style: italic; text-align: justify; text-justify: inter-ideograph"><I>Various IFRSs</I></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 6.5pt 5.4pt; text-align: left; text-justify: inter-ideograph">&nbsp;January 1, 2013</TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 13pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 13pt"><FONT STYLE="font-weight: normal">* Annual periods beginning
on or after</FONT></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>4&#9;Significant accounting policies
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>IFRS 9 Financial<I> Instruments</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 9 will be adopted by the Group for
the first time for its financial reporting period ending December 31, 2015. The standard will be applied retrospectively, subject
to transitional provisions.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The standard supersedes the existing
IAS 39 classification and measurement guidance on financial assets and financial liabilities. It effectively eliminates the categories
of held to maturity, available for sale and loans and receivables for financial assets.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">Financial assets will be measured at
amortised cost or fair value based on an assessment of the business model in which they are held and the characteristics of each
instrument. The guidance for the classification and measurement of financial liabilities remains mostly unchanged.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The guidance on the derecognition of
financial instruments and how to measure fair value remains unchanged from IAS 39.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The standard eliminates the need to separate
embedded derivatives from financial asset host contracts within the scope of IFRS 9. This simplification does not apply for other
host contracts.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">It remains possible in certain circumstances
to designate financial assets or liabilities as at fair value through profit or loss.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">There is a proposal to amend IFRS 9 in
respect of any available for sale investments which are not held for trading, to allow IFRS 9 to permit an irrevocable choice to
account for the fair value movements on these assets as either in other comprehensive income (OCI) or in profit or loss. If available
for sale investments fair value measurements are recognised in OCI, they should not be recycled to profit or loss. Reclassification
to retained earnings is permitted.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">There may be an impact on the Group&rsquo;s
statement of financial position and statement of comprehensive income resulting from the new guidance on financial instruments.
Management continues to monitor the development of the new standards on financial instruments and the potential impact the new
standards may have as the date of adoption draws closer.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>IFRS 10 <I>Consolidated Financial
Statements</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 10 will be adopted by the Group
for the first time for its financial reporting period ending December 31, 2013. The standard will be applied retrospectively if
there is a change in the control conclusion between IAS 27/SIC 12 and IFRS 10.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 10 introduces a single control model
to assess whether an investee should be consolidated. This control model requires entities to perform the following in determining
whether control exists:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Identify how decisions about the relevant activities are made,</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Assess whether the entity has power over the relevant activities by considering only the entity&rsquo;s
substantive rights,</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Assess whether the entity is exposed to variability in returns, and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Assess whether the entity is able to use its power over the investee to affect returns for its own
benefit</TD></TR></TABLE>

<P STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin: 6.5pt 0 6.5pt 34pt; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">Control should be assessed
on a continuous basis and should be reassessed as facts and circumstances change.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">Management has assessed control over
the following entities under IFRS 10 at 31 December 2012 in relation to the Zimbabwe Indigenisation Transaction as set out in note
5. Based on this assessment, the following entities would continue to be consolidated by the Group under IFRS 10:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">Blanket Mine (1983) (Private) Limited</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Blanket Employee Trust Services (Private) Limited (BETS)</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Blanket Mine Employee Trust (Employee Trust)</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">It was also concluded
that the Group would not consolidate the Gwanda Community Share Ownership Trust under IFRS 10.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>IFRS 12 <I>Disclosure of Interests
in Other Entities</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 12 will be adopted by the Group
for the first time for its financial reporting period ending December 31, 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 12 combines, in a single standard,
the disclosure requirements for subsidiaries, associates and joint arrangements, as well as unconsolidated structured entities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The required disclosures aim to provide
information to enable user to evaluate:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">The nature of, and risks associated with, an entity&rsquo;s interests in other entities, and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">The effects of those interests on the entity&rsquo;s financial position, financial performance and
cash flows.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The adoption of the new standard will
increase the level of disclosure provided for the Group&rsquo;s interests in subsidiaries and structured entities (both consolidated
and unconsolidated).</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>IFRS 13 <I>Fair Value Measurement</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 13 will be adopted by the Group
for the first time for its financial reporting period ending December 31, 2013. The standard will be applied prospectively and
comparatives will not be restated.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 13 introduces a single source of
guidance on fair value measurement for both financial and non-financial assets and liabilities by defining fair value, establishing
a framework for measuring fair value and setting out disclosures requirements for fair value measurements. The key principles in
IFRS 13 are as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Fair value is an exit price</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Measurement considers characteristics of the asset or liability and not entity-specific characteristics</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Measurement assumes a transaction in the entity&rsquo;s principle (or most advantageous) market between
market participants</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Price is not adjusted for transaction costs</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">Measurement maximises the use of relevant observable inputs and minimises the use of unobservable
inputs</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left"></TD></TR></TABLE>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 7.1pt"><B>4</B></TD><TD STYLE="text-align: justify"><B>Significant accounting policies &ndash; (continued)</B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/13pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: left">The three-level fair value hierarchy is extended to all fair value measurements</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">IFRS 13 may impact
the Group&rsquo;s financial instruments at initial recognition as well as those measured at fair value subsequently. However, limited
impact is expected from subsequent fair value measurement as the Group does not currently hold any material financial instruments
measured at fair value. Further impacts may result from impairment calculations where fair value less cost to sell is calculated.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>Amendments to IAS 1 <I>Presentation
of Financial Statements</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amendments to IAS 1 will be adopted
by the Group for the first time for its financial reporting period ending December 31, 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The Group will present those items of
other comprehensive income that may be reclassified to profit or loss in the future separately from those that would never be reclassified
to profit or loss. The related tax effects for the two sub-categories will be shown separately.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">This is a change in presentation and
will have no impact on the recognition or measurement of items in the consolidated financial statements.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">This amendment will be applied retrospectively
and the comparative information will be restated.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>Amendments to IAS 19 <I>Employee Benefits</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amendments to IAS 19 will be adopted
by the Group for the first time for its financial reporting period ending December 31, 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amendment changes the definitions
of short-term employee benefits and other long term employee benefits so that the distinction between the two will depend on when
the entity expects the benefit to be wholly settled.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amended definitions state that a
benefit is short-term when it is expected to be settled wholly within twelve months after the annual reporting period in which
the employees render the related service. If this is not the case, then it is accounted for as other long-term employee benefit.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The classification of employee benefits
as short-term or other long term employee benefits impacts the measurement of the related liability. The requirements to classify
the related liability as current or non-current has not changed.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">Further amendments relate to defined
benefit plans which is not expected to have an impact on the Group as there are currently no defined benefit plans.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The impact of the amendments to IAS 19
on the classification of short-term employee benefits has not yet been determined.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>Amendments to IAS <I>32 Financial
Instruments: Presentation</I> and IFRS 7: <I>Financial Instruments: Disclosures</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amendments to IAS 32 and IFRS 7 will
be adopted by the Group for the first time for its financial reporting period ending December 31, 2014 and December 31, 2013 respectively.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">An entity may offset financial assets
and financial liabilities when it currently has a legally enforceable right to set off the recognised amounts. IAS 32 previously
did not provide guidance on what was meant by &ldquo;currently has a legally enforceable right to set off&rdquo;. The amendment
provides guidance in IAS 32 to clarify the criteria.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amendments clarify that an entity
currently has a legally enforceable right to set-off if that right is:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Not contingent on a future event; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Enforceable in all of the following circumstances:</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">The normal course of business;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">The event of default;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">The event of insolvency or bankruptcy.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRS 7 disclosure requirements have been
amended so that the IASB and the US Financial Accounting Standards Board will have common disclosure requirements.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">The amendment&rsquo;s impact is limited
to presentation and disclosure and will not impact recognition and measurement of financial instruments of the Group.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify"><U>IFRIC 20 <I>Stripping Cost in the
Production Phase of a Surface Mine</I></U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRIC 20 will be adopted by the Group
for the first time for its financial reporting period ending December 31, 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">IFRIC 20 applies to entities that incur
waste removal cost in a surface mining activity during the production phase of a mine and addresses the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">initial recognition of production stripping costs as an asset;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">the initial measurement of stripping activity asset; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">subsequent measurement of stripping activity asset.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify">Waste removal in the production phase
of a mine may result in the following benefits:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">improved access to ore; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6.5pt; margin-bottom: 6.5pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">inventory produced.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">If the benefit is in
the form of inventory produced, the attributable cost will be recognised as cost of production of inventory. If the benefit is
to improve access to the ore, a non-current asset will be recognised.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">When the costs relating
to improved access to ore (e.g. a stripping activity asset) and the costs of the inventory produced are not separately identifiable,
production stripping costs are allocated between the stripping activity asset and inventory using a relevant production measure
(e.g., actual vs. expected cost of inventory produced, actual vs. expected volume of waste extracted and actual vs. expected mineral
content of ore extracted).</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">Depreciation or amortisation
needs to be recognised on a systematic basis over the expected useful life of the identified component of the ore body that becomes
more accessible as a result of the stripping activity.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">The Group currently
has an underground mine, Blanket Mine, which is in the production phase. Stripping costs incurred on Blanket Mine are outside the
scope of IFRIC 20.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">IFRIC 20 may impact
the Nama Cobalt and Copper Projects in Zambia (Nama Project) once the mines moves into the production stage as the mines may have
surface mining activities. The impact of IFRIC 20 on the Nama Project has not yet been determined.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify"><B>4&#9;Significant accounting
policies &ndash; (continued)</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in"><U>Annual Improvements
2009-2011 cycle</U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">The annual improvements
consist of amendments to existing IFRSs to clarify guidance and wording, or to correct for relatively minor unintended consequences,
conflicts or oversights. Amendments are made through the annual improvements process when the amendment is considered non-urgent
but necessary.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6.5pt 0; text-align: justify; text-indent: 0in">Management does not
expect that any of these amendments will impact the recognition or measurement of amounts disclosed in the consolidated financial
statements. The impact of these improvements on presentation and disclosure has not yet been determined.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><B>5</B></TD><TD STYLE="text-align: justify"><B>Blanket Zimbabwe Indigenisation Transaction </B></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">On February 20, 2012<B> </B>Caledonia
announced it had signed a Memorandum of Understanding (&ldquo;MoU&rdquo;) with the Minister of Youth, Development, Indigenisation
and Empowerment of the Government of Zimbabwe pursuant to which Caledonia agreed that indigenous Zimbabweans would acquire an effective
51% ownership interest in the Blanket Mine for a paid transactional value of US$30.09 million.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Pursuant to the above, Caledonia
entered into agreements with each Indigenisation Shareholder to sell its 51% ownership interest in Blanket as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">A 16% interest was sold
to the National Indigenisation and Economic Empowerment Fund (NIEEF) for US$11.74 million.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">A 15% interest was sold
to Fremiro, which is owned by Indigenous Zimbabweans, for US$11.01 million.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">A 10% interest was sold
to Blanket Employee Trust Services (Private) Limited (BETS) for the benefit of present and future managers and employees for US$7.34
million. The shares in BETS are held by the Blanket Mine Employee Trust (Employee Trust) with Blanket&rsquo;s employees holding
participation units in the Employee Trust.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">A 10% interest was donated
to the Gwanda Community Share Ownership Trust (Community Trust). Blanket undertook and paid a non-refundable donation of US$1 million
to the Community Trust.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Caledonia facilitated the vendor
funding of these transactions (other than the 10% interest which was donated to the Community Trust) which will be repaid by way
of future dividends from Blanket. 80% of dividends declared by Blanket will be used to repay such loans and the remaining 20% will
unconditionally accrue to the respective Indigenous Shareholders.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Outstanding balances on the
facilitation loans attract interest at a rate of 10% over the 12-month LIBOR. The timing of the repayment of the loans depends
on the future financial performance of Blanket and the extent of future dividends declared by Blanket.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">In order to ensure the repayment
from Blanket to Caledonia of the vendor funding of the proceeds, Reserve Bank of Zimbabwe approval was obtained for the facilitation
loans to be declared by Caledonia Holdings Zimbabwe (Blanket&rsquo;s parent company) to a wholly-owned subsidiary of Caledonia
Mining Corporation as a dividend in specie on February 14, 2013 and withholding tax amounting to US$1.504 million was paid and
expensed on March 5, 2013.</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>5&#9;Blanket Zimbabwe Indigenisation
Transaction &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt 7.1pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The
Government of Zimbabwe has confirmed that the implementation of the terms of the MoU and the underlying subscription agreements
constitute full compliance with the requirements of the Indigenisation Act and the Regulations and Blanket has received its certificate
of compliance </FONT>which <FONT STYLE="font-family: Times New Roman, Times, Serif">confirms that Blanket is fully compliant with
the requirements of Section 3(1)(a) of the Indigenisation and Economic Empowerment Act (Chapter 14.33). </FONT></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Completion of the above agreements
was subject to specified conditions as contemplated in the MoU, underlying agreements and related transactions to give effect to
the Indigenisation Transaction. The final condition precedent was met on September 5, 2012 and on that date, the Indigenisation
Shareholders effectively acquired 51% ownership and economic interest in the Blanket Mine.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>Accounting treatment</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Further to the implementation
of the Indigenisation Transaction, a 51% shareholding in Blanket was acquired by the Indigenisation Shareholders. The directors
of Caledonia Holdings performed an assessment, using the requirements of IAS 27: <I>Consolidated and Separate Financial Statements</I>
(IAS 27), to determine whether Blanket should continue to be consolidated by Caledonia Holdings Zimbabwe. Following the assessment,
it was concluded that Caledonia Holdings Zimbabwe retained control and should continue to consolidate Blanket and accordingly the
subscription agreements will be accounted for as a transaction with non-controlling interests and share based payments. The group
accounting policy was extended to include control aspects in its analysis of control principles in accordance with IAS 27 (refer
note 4(a)(i)).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">Control as contemplated
in IAS 27 was considered to exist on the basis of exercisable power conferred on Caledonia Holdings Zimbabwe to cast majority votes
at board level as contained in the registered founding documents of Blanket as well as consideration of the de facto control aspects
of the relative shareholdings in Blanket. The aspect of control under IAS 27 will be reviewed at each reporting cycle.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Accordingly, on the effective
date of the transaction, the subscription agreements were accounted for as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-controlling interests
(NCI) were recognised on the portion of shareholding upon which dividends declared by Blanket will accrue unconditionally to equity
holders as follows:</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">20% of the 16% shareholding of NIEEF;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify">20% of the 15% shareholding of Fremiro;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify">100% of the 10% shareholding of the Community Trust.</TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify">i.e. a 16.2% NCI of net assets
and earnings is recognised at Blanket level.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify">The remaining 80% of the shareholding
of NIEEF and Fremiro is recognised as non-controlling interest to the extent that their attributable share of the net asset value
of Blanket exceeds the balance</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 17pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>5&#9;Blanket Zimbabwe Indigenisation
Transaction &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify">on the facilitation loans including
interest. At December 31, 2012, the attributable net asset value did not exceed the balance on the respective loan accounts and
thus no additional NCI was recognised.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">As the facilitation loans
are only repayable from dividends declared by Blanket, a loan receivable is not recognised and the arrangement is accounted for
within equity.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The difference between the
fair value of the equity instruments granted and facilitation loans, taking into account all the interest terms and advance dividend
rights (see below), was recognised as a share based payment expense (refer Note 21(b)).</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify; text-indent: -17pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The transaction with the
BETS will be accounted for in accordance with IAS 19 <I>Employee Benefits</I> (profit sharing arrangement) as the ownership of
the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing
to the 10% shareholding in Blanket if they are employed at the date of such distribution. To the extent that 80% of the attributable
dividends exceed the balance on the BETS facilitation loan they will accrue to the employees at the date of such declaration.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">The Employee Trust and BETS
are special purpose entities which are effectively controlled and consolidated by Blanket. Accordingly the shares held by BETS
are effectively treated as treasury shares and no NCI is recognised.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 27%; padding-left: 4.5pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Shareholding</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Recognised NCI</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">NCI subject to facilitation loan</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance of facilitation loan at 31 December 2012 #</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">IFRS 2 expense <FONT STYLE="font-size: 10pt; line-height: 115%">(note 21)</FONT></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">NIEEF</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">16%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3.2%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12.8%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">11,742</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,882</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Fremiro</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">15%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">11,402</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,273</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Community Trust</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">10%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">10%</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,006</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">BETS</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">10%</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-*</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-*</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,602</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">~</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">51%</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">16.2%</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">24.8%</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">30,746</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">14,161</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The balance on the facilitation loans
is reconciled as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 42%; padding-left: 4.5pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Subscription price funded on loan account</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$30,090</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest accrued</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">656</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Dividends used to repay loans</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$30,746</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">* The shares held by BETS
are effectively treated as treasury shares (see above).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">~ Accounted for under IAS19
<I>Employee Benefits</I></FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"># Facilitation loans are
accounted for as equity instruments and are accordingly not recognised as loans receivable (see above).</FONT></TD></TR></TABLE>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>5&#9;Blanket Zimbabwe Indigenisation
Transaction &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The following Indigenisation costs have
been incurred:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 61%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="vertical-align: top; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Donation to Gwanda Community Trust</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,140</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Legal fees</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>21</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Professional consulting fees</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>539</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">326</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,700</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">326</FONT></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>Advance dividends</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">In anticipation of completion
of the underlying subscription agreements, Blanket agreed to an advance dividend arrangement with NIEEF and the Community Trust
as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 17pt; text-align: justify; text-indent: -17pt">(a)<FONT STYLE="font-size: 7pt">&nbsp;&nbsp;
</FONT><FONT STYLE="color: black">Advances to the Community Trust against their right to receive dividends declared by Blanket
on their shareholding as follows;</FONT></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 70pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>A US$2 million payment on or before September 30, 2012;</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 70pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>A US$1 million payment on or before February 28, 2013; and</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 52pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A US$1 million payment on or before April
30, 2013.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">These advance payments have
been recorded to a loan account bearing interest at a rate of 10% over the 12-month LIBOR. The loan is repayable by way of set
off of future dividends on the Blanket shares owed by the Community Trust.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 17pt">(b)</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">An advance payment of US$1.8 million to NIEEF against their right to
receive dividends declared by Blanket on their shareholding. The advance payment has been debited to an interest-free loan account
and is repayable by way of set off of future dividends on the Blanket shares owned by NIEEF. Whilst any amount remains outstanding
on the NIEEF dividend loan account, interest on the NIEEF facilitation loan will be suspended.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">The advance dividend payments
have been recognised as a distribution to shareholders on the effective date of the subscription agreements. The loans arising
are not recognised as loans receivable by Blanket as they are only repayable by set off of future dividend entitlements and are
accordingly regarded as equity instruments.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>5&#9;Blanket Zimbabwe Indigenisation
Transaction &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">The balance on the advance dividend
loans is reconciled as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 53%; padding-left: 4.5pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">NIEEF</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Community Trust</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Advance dividends paid</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,951</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,739</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest accrued</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">62</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">62</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 4.5pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 4.5pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,013</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-left: 4.5pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,801</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">The advance payments to the
Community Trust of US$2 million, payable in February and April 2013, have been recognised as a liability as Blanket has a present
obligation to make the payments.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>6&#9;Financial risk management</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify; text-indent: 0.5in"><B>Overview</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group has exposure to
the following risks from its use of financial instruments:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Currency risk (refer note 24)</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Interest rate risk (refer note 24)</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Credit risk (refer note 24)</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Liquidity risk (refer note 24)</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">This note and note 24 presents
information about the Group&rsquo;s exposure to each of the above risks, the Group&rsquo;s objectives, policies and processes for
measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Group is exposed in
varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management
program focuses on preservation of capital, and protecting current and future Group assets and cash flows by reducing exposure
to risks posed by the uncertainties and volatilities of financial markets.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The Board of Directors has
responsibility to ensure that an adequate financial risk management policy is established and to approve the policy. The Group&rsquo;s
Audit Committee oversees management&rsquo;s compliance with the Group&rsquo;s financial risk management policy.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">The fair value of the Group&rsquo;s
financial instruments approximates their carrying value unless otherwise noted. The types of risk exposure and the way in which
such exposures are managed are as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>6&#9;Financial risk management
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>(a) Concentration of Credit
Risk </B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Credit risk is the risk of
a financial loss to the Group if a gold sales customer fails to meet its contractual obligation. Current gold sales are made to
Rand Refineries in South Africa and the payment terms are stipulated in the service delivery contract and are adhered to in all
instances. Cash is deposited only with &ldquo;A&rdquo; grade banks.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>(b) Liquidity Risk </B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Liquidity risk is the risk that
the Group will not be able to meet its financial obligations as they fall due.</P>

<P STYLE="font: 9pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group manages its liquidity
by ensuring that there is sufficient capital to meet its likely cash requirements, after taking into account cash flows from operations
and the Group&rsquo;s holdings of cash and cash equivalents. The Group believes that these sources will be sufficient to cover
the anticipated cash requirements. Senior management is also actively involved in the review and approval of planned expenditures
by regularly monitoring cash flows from operations and anticipated investing and financing activities.</P>

<P STYLE="font: 9pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Since the inception of dollarization
in Zimbabwe in 2009, all appropriate insurance cover has been reinstated. The Zimbabwean operations are now covered for Public
Liability risk, Assets all risk and comprehensive cover on all motor vehicles.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>7&#9;Capital Management
</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group&rsquo;s objectives
when managing capital are to safeguard its ability to continue as a going concern in order to pursue the mining operations and
exploration potential of the mineral properties.</P>

<P STYLE="font: 9pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group&rsquo;s capital includes
shareholders&rsquo; equity, comprising issued common shares, reserves, accumulated other comprehensive income, accumulated deficit,
bank loans and non-controlling interest as detailed below.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 59%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 21%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Group capital</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>55,619</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">40,444</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group&rsquo;s primary objective
with respect to its capital management is to ensure that it has sufficient cash resources to maintain its on-going operations,
to provide returns for shareholders, accommodate any rehabilitation provisions and to pursue growth opportunities.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">As at December 31, 2012, the
Group is not subject to externally imposed capital requirements and there has been no change with respect to the overall capital
risk management strategy.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>8&#9;Production costs</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 68%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Wages</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>8,491</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,197</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,909</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Consumable materials</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>13,286</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,117</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5,969</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Site restoration</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>43</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">50</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">44</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Exploration</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>831</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">21</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">34</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Safety</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>251</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">290</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">145</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">On mine administration</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,751</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,418</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,516</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>25,653</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">21,093</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,617</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>9&#9;Administrative expenses</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 69%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Investor relations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>447</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">196</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">145</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Management contract fee</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>704</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">779</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">689</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Audit fee</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>443</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">298</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">244</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Legal fee and disbursements</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>189</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">103</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">106</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Accounting services fee</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>83</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">41</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">27</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Listing fees</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>151</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">270</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">69</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Directors fees</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>194</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">145</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">168</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Salaries and wages</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,648</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,368</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right">1,237</P></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>196</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">151</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">122</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,055</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,351</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,807</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>10&#9;Other expenses </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 69%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment loss on trade receivables</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,064</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,064</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>11&#9;Finance income and
finance costs</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 68%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>79</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">270&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest expense on financial liabilities measured at amortised cost</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(217)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(267)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(81)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(162)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>12&#9;Income taxes</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Current tax expense</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>12,547</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,005</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Deferred tax expense</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Origination and reversal of temporary differences</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>271</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">785</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,041</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Change in previously unrecognised deductible temporary differences</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(120)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Recognition of previously unrecognised non-capital tax losses</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(206)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>271</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">&nbsp;459</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">&nbsp;1,041</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total income tax expense</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>12,818</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,464</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,042</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 61%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Reconciliation of tax
rate</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>%</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">%</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Profit for the year</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total income tax expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>12,818</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,464</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,042</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Profit before income tax</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>20,176</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">20,594</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,497</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income tax using Company's domestic tax rate</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>26.5%</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,347</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">28.25%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5,818</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">31%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">774</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Tax rate differences in foreign jurisdictions</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(210)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,476)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(214)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Change in tax rate</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(254)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign currency difference</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>439</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,075</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(185)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Withholding taxes</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,763</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,589</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share based payment expenses and other permanent differences </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,364</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">613</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">219</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Losses expired</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5,467</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Accrual for tax dispute</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>806</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Change in unrecognized deferred tax assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>563</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(155)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,019)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income tax expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>12,818</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,464</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,042</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Changes in the applicable
domestic tax rate are the result of enacted tax rate changes in Canada.</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>12&#9;Income taxes &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Deferred tax assets and
liabilities</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Unrecognised deferred
tax assets</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Deferred tax assets have
not been recognised in respect of the following items:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 74%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Deductible temporary differences</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>3,338</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,427</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-capital tax loss carry - forward </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>10,478</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,826</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>13,816</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">&nbsp;13,253</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The Company has not recognised
deferred tax liabilities in respect of unremitted earnings in foreign subsidiaries as it is not considered probable that this temporary
difference will reverse in the foreseeable future. At December 31, 2012, these earnings amount to $14,689 (2011 - $8,351; 2010
- $2,151).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 7.1pt; text-align: justify">In 2012, the reduction in
the net investment in Blanket Mine (note 5) resulted in a deferred tax liability of $3,987.&nbsp; As a result, the Company recorded
a deferred tax asset of $3,987 representing the benefit of previously unrecognised capital losses which relate to the same taxation
entity and tax authority and are therefore presented on a net basis. As at December 31, 2012, the Company has capital loss carry
forwards of $51,245 (2011 - $81,335) in Canada for which the benefits have not been recognised in these consolidated financial
statements.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The non-capital tax losses
expire as set out below. The deductible temporary differences do not expire under current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be available against
which the Group can utilise the benefits there from. In 2012 $nil (2011 - $737) of previously unrecognised non-capital tax losses
and $nil (2011 - $430) of deductible temporary differences were recognised as management considered it probable that future taxable
profits will be available against which they can be utilised.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Year</FONT></TD>
    <TD STYLE="width: 49%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Amount</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2014</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,583</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2015</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,863</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2026</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,780</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2027</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,054</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2028</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,260</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2029</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,661</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2030</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,617</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2031</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,238</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2032</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,667</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">No expiry</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">18,757</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">38,480</FONT></TD></TR>
</TABLE>

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    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>12&#9;Income tax expense
&ndash; (continued)</B></P>

<P STYLE="font: 9pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>Recognised deferred tax assets
and liabilities</B></P>

<P STYLE="font: 8pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Deferred tax assets and liabilities
are attributable to the following:</P>

<P STYLE="font: 8pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Assets</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Liabilities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Net</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 31%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(6,156)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(6,466)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(6,156)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(6,466)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unrealised foreign exchange</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>61</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">119</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>61</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">119</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>66</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">59</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>66</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">59</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Provisions</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>177</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">373</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>181</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">373</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other items</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-capital tax loss carry-forwards</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">206</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">206</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Tax (assets) liabilities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>62</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">325</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,913)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(6,037)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,851)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,712)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>Movement in net deferred
taxes on temporary differences during the year</B>&#9;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-collapse: collapse; width: 100%; font: 11pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance January 1</B></FONT></TD>
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Recognised in profit and loss</B></FONT></TD>
    <TD STYLE="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Recognised in other comprehensive income</B></FONT></TD>
    <TD STYLE="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance December 31</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(6,466)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>143</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>167</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(6,156)</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unrealised foreign exchange</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>119</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(49)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(9)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>61</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>59</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>8</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>66</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Provisions</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>373</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(182)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(10)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>181</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other items</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-capital tax loss carry-forwards</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>206</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(191)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(15)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,712)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(271)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>132</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,851)</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B></B>12&#9;Income tax expense &ndash; (continued)</P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance January 1</B></FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Recognised in profit and loss</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Recognised in other comprehensive income</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance December 31</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2011</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,595)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(759)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(112)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(6,466)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unrealised foreign exchange</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">110</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">119</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">40</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">18</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">59</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Provisions</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">384</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(19)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">373</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other items</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-capital tax loss carry-forwards</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">11</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">194</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">206</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,151)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(459)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(102)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,712)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance January 1</B></FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Recognised in profit and loss</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Recognised in other comprehensive income</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance December 31</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2010</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4,735)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,083)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">223</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,595)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unrealised foreign exchange</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">33</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">40</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Provisions</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">366</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">35</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(17)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">384</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-capital tax loss carry-forwards</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">23</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(11)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">11</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4,313)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,041)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">203</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,151)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 31%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>13&#9;Property, plant
and equipment</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 29%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Land and buildings</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Mineral properties being depleted</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Mineral properties not being depleted</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Plant and equipment</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Fixtures and fittings</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Motor vehicles</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Cost </B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at January 1, 2011</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,146</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,536</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">15,543</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,083</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">770</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">39,078</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Additions</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">93</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">757</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,726</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,485</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">91</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">376</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,528</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Disposals</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment <SUP>(1)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange movement</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(39)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">177</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">65</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(30)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(22)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">13</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">164</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at December 31, 2011</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,200</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,934</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,443</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">19,998</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,152</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,155</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">43,882</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at January 1, 2012</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,200</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,934</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,443</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>19,998</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,152</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,155</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>43,882</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Additions</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>472</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,280</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>3,614</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>767</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>74</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>702</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,909</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Disposals<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(622)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(39)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(661)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: super; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><SUP>-</SUP></B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(773)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(773)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange movement</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(138)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(267)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(219)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(646)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(30)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(36)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,336)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at December 31, 2012</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,534</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>11,325</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>10,838</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>19,346</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,196</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,782</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>49,021</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt 28.35pt; text-align: justify; text-indent: -21.25pt"><SUP>(1)
</SUP> <FONT STYLE="font-family: Times New Roman, Times, Serif">The full carrying value of the Rooipoort platinum property in South
Africa has been impaired as, despite the timely application for the renewal of the prospecting right, no formal right has yet been
granted. As a consequence of the delay in the receipt of the valid right, no funding has been allocated to this project for the
foreseeable future.</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 7.1pt"></TD><TD STYLE="width: 21.25pt"><SUP>(2)</SUP></TD><TD STYLE="text-align: justify">This represents the write down of the rehabilitation asset as a result of the reduced present value
of the rehabilitation provision as assessed at year end.</TD></TR></TABLE>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>13</B></FONT><B>&#9;<FONT STYLE="font-family: Times New Roman, Times, Serif">Property,
plant and equipment - (continued)</FONT></B></P>

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<TR>
    <TD STYLE="vertical-align: top; width: 29%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Land and buildings</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Mineral properties being depleted</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Mineral properties not being depleted</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Plant and equipment</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Fixtures and fittings</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Motor vehicles</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Depreciation and Impairment losses</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at January 1, 2011</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">469</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">832</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,499</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">861</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">439</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,100</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation for the year</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">250</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">659</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,833</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">87</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">154</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,983</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Disposals</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange movement</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">18</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">37</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(154)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(25)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(115)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at December 31, 2011</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">737</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,528</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,178</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">923</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">598</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,964</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at January 1, 2012</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>737</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,528</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>6,178</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>923</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>598</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,964</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation for the year</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>262</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>543</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,279</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>82</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>226</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>3,392</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Disposals</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(443)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(443)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange movement</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(21)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(43)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(255)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(23)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(18)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(360)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at December 31, 2012</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>978</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,028</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,759</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>982</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>803</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>12,550</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Carrying amounts</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">At December 31, 2011</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,463</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,406</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,443</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">13,820</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">229</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">557</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">33,918</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">At December 31, 2012</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>3,556</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,297</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>10,838</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>11,587</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>214</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>979</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>36,471</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B><BR CLEAR="ALL">
</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>14&#9;Inventories&#9;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 22%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Consumable stores</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,720</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,899</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Gold in progress</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>788</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">583</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,508</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,482</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Inventory is comprised of
gold in circuit at Blanket and consumable stores utilised by Blanket Mine. Consumables stores are disclosed net of any write downs
or provisions of obsolete items. The inventories expensed in the year amounted to $13,286 (2011 - $12,117, 2010 -$5,969)</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>15&#9;Trade and other
receivables</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 64%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bullion sales receivable</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,278</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">VAT receivables</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,103</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">694</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Deposits for stores and equipment and other receivables</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>615</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">685</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Current portion</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,718</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,657</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The bullion receivable is
received shortly after the delivery of the gold and no provision for non-recovery is required.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The Group's exposure to credit
and currency risks, and impairment losses related to trade and other receivables is disclosed in note 6 and note 25.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>16&#9;Cash and cash equivalents</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 61%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bank balances</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,686</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Cash and cash equivalents</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,686</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bank overdrafts used for cash management purposes</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(430)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Cash and cash equivalents in the statement of cash flows</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,256</FONT></TD></TR>
</TABLE>
<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>16&#9;Cash and cash equivalents
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The Group&rsquo;s exposure
to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in note 24.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The bank overdraft facility
of US$2.5 million bears interest at 8% above the 30 day LIBOR rate. The facility is unsecured and valid for 12 months and is renewable.
The facility is repayable on demand.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>17&#9;Equity</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Share capital </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Authorised</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unlimited number of common shares of no par value</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unlimited number of preference shares of no par value.</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Issued</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Number of common shares</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Amount</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">December 31, 2010</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,169,280</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$196,125</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Issued on exercise of share options during the year</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">380,000</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">38</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">December 31, 2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,549,280</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">196,163</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Issued on exercise of share options during the year</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">13,912,500</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">974</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>December 31, 2012</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>514,461,780</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$197,137</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 55%">&nbsp;</TD>
    <TD STYLE="width: 18%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 24%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Common shares and preference
shares </B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The holders of common shares
are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.
Holders of preference shares receive a non-cumulative dividend per share at the Company&rsquo;s discretion, or whenever dividends
to common shareholders are declared. They do not have the right to participate in any additional dividends declared for common
shareholders.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Preference shares do not carry
the right to vote. All shares rank equally with regard to the Company&rsquo;s residual assets, except that preference shareholders
participate only to the extent of the face value of the shares.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Investment Revaluation
Reserve</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The investment revaluation
reserve arises from the valuation of investments at fair value through other comprehensive income.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>17&#9;Equity &ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Translation reserve</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The translation reserve comprises
all foreign currency differences arising from the translation of the financial statements of foreign operations with functional
currencies that differ from the presentation currency.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Share-based payment reserve</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The share-based payment reserve
comprises the fair value of equity instruments granted to employees and directors under share option plans and equity instruments
issued to Zimbabwe indigenisation shareholders under the Indigenisation Transaction (refer Note 5).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt"><B>18&#9;Earnings per share</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Basic earnings per share</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The calculation of basic
earnings per share at December 31, 2012 was based on the profit attributable to common shareholders of $8,720 (2011: $12,130; 2010:
$1,455), and a weighted average number of common shares outstanding of 505,970,684 (2011: 500,396,239; 2010: 500,169,280), calculated
as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Weighted average number
of common shares</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(In number of shares)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Note</I></B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Issued common shares at January 1</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>18</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>500,549,280</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,169,280</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,169,280 </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Weighted average issues during the year </FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,421,404</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">226,959</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Weighted average number of common shares at December 31</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>505,970,684</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,396,239</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,169,280</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 9px">&nbsp;</TD>
    <TD STYLE="width: 66px">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 63%; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Profit for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Loss attributable to NCI</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,362</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Adjusted basic earnings attributable to common shareholders</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>8,720</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Diluted earnings attributable to common shareholders</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>8,720</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
</TABLE>
<P STYLE="text-align: justify; margin: 0 0 0 17pt; font-family: Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="text-align: justify; margin: 0 0 0 17pt; font-family: Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt"><B>18&#9;Earnings per share &ndash; (continued)</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Basic earnings are adjusted
for the amounts that accrue to other equity holders of subsidiaries upon the full distribution of post-acquisition earnings to
shareholders.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17pt"></TD><TD STYLE="width: 17pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Diluted earnings is calculated
on the basis that the unpaid ownership interests of Blanket Mine&rsquo;s Indigenisation shareholders are effectively treated as
options whereby the weighted average fair value for the period of the Blanket shares issued to Indigenous Zimbabweans and which
are subject to settlement of the loan accounts is compared to the balance of the loan accounts and any excess portion is regarded
as dilutive. The difference between the number of Blanket shares subject to the settlement of the loan accounts and the number
of Blanket shares that would have been issued at the average fair value during the period of the Blanket shares is treated as the
issue of shares for no consideration and regarded as dilutive shares. The calculated dilution is taken into account with additional
earnings attributable to the dilutive shares in Blanket, if any.</FONT></TD></TR></TABLE>

<P STYLE="text-align: justify; margin: 0 0 0 34pt; font-family: Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The interest of NIEEF and Fremiro shareholding
were anti-dilutive in the current period (i.e. the value of the options was less than the outstanding loan balance) and accordingly
there was no adjustment to fully diluted earnings attributable to common shareholders.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">There was no adjustment for additional
amounts attributable to BETS as Blanket incurred a loss subsequent to the transaction date of September 5, 2012.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The calculation of diluted
earnings per share at December 31, 2012 was based on the profit attributable to common shareholders of $8,720 (2011: $12,130; 2010:
$1,455), and a weighted average number of common shares and potentially dilutive shares outstanding of 508,331,827 (2011: 509,879,875;
2010: 500,169,280), calculated as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Weighted average number
of common shares </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(In number of shares)</I></FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Weighted average number of common shares (basic) at December 31</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>505,970,684</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,396,239</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,169,280</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Effect of dilutive options</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,361,143</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,483,636</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Weighted average number of common shares (diluted) at December 31</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>508,331,827</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">509,879,875</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,169,280</FONT></TD></TR>
</TABLE>
<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The average market value of
the Company&rsquo;s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for
the period during which the options were outstanding. The potential dilutive effect of 25,779,000 options (2011 &ndash; 16,460,000,
2010 &ndash; 26,080,000) was excluded from the above calculations because these options were anti-dilutive.</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>19&#9;Defined Contribution
Plan</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Under the terms of the Mining
Industry Pension Fund (&ldquo;Fund&rdquo;) in Zimbabwe, eligible employees contribute a fixed percentage of their eligible earnings
to the Fund. Blanket makes a matching contribution plus an inflation levy as a fixed percentage of eligible earnings of these employees.
The total contribution by Blanket for the year ended December 31, 2012 was $341 (2011: $ 288; 2010: $277).</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>20&#9;Share-based payments</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">At December 31, 2012 the Group
has the following share-based payment arrangement:</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>(a) Share option programme
(equity-settled)</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group has established
a rolling stock option plan (the &quot;Plan&quot;) for employees, officers, directors, consultants and other service providers.
In accordance with the Plan, options are granted with exercise prices equal to the market price of the shares at the date of grant.</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>Terms and conditions of
share option program</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B></B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The terms and conditions relating
to the grants under the Plan are that all options are to be settled by physical delivery of shares. Under the current Plan, the
maximum term of the options is 5 years. Under the Plan, the aggregate number of shares that may be issued will not exceed 10% of
the number of the shares issued of the Company. At December 31, 2012, the Company has the following options outstanding:</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Number of Options</B></FONT></TD>
    <TD STYLE="width: 27%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Exercise Price</B></FONT></TD>
    <TD STYLE="width: 39%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Expiry Date<SUP>(1)</SUP></B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">6,070,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Feb 11,2013</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">437,500</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">July 1, 2013</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">210,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">April 29, 2014</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">500,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Mar 23, 2014</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">16,460,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.13</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Jan 31, 2016</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">300,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">May 11, 2016</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,319,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.09</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Sept 10, 2017</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">33,296,500</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.3pt"></TD><TD STYLE="width: 18pt"><SUP>(1)</SUP></TD><TD STYLE="text-align: justify">In terms of the approved Plan, the expiry date of options that expire in a closed period will be
extended by 10 days from the cessation of the close period.</TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify">The continuity of the options
granted, exercised, cancelled and expired under the Plan during 2012 and 2011 are as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Number of Options</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Weighted Avg. Exercise Price</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Options outstanding and exercisable at January 1, 2011</FONT></TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">32,580,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Granted</FONT></TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">16,460,000</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.13</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expired</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(6,500,000)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.07</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Options outstanding and exercisable at December 31, 2011</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">42,540,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.093</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Exercised</FONT></TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(13,912,500)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.07</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Granted</FONT></TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,319,000</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.09</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expired</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4,650,000)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.07</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Options outstanding and exercisable at December 31, 2012</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>33,296,500</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.105</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 65%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 18%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>20&#9;Share-based payments
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The weighted average remaining
contractual life of the outstanding options is 2.92 years (2011: 2.16 years). The weighted average share price at the date of exercise
for the options exercised in the year was $0.09.</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The vesting of options is
determined at the discretion of the board of directors, at the time the options are granted. As of December 31, 2012 there are
18,149,678 stock options available to grant (2011: 7,514,928 stock options)</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Inputs for measurement
of grant date fair values</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The fair value of share based
payments noted above was estimated using the Black-Sch&ouml;les Option Pricing Model with the following assumptions for the years
ended December 31, 2012 and 2011.</P>

<P STYLE="font: 5pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 74%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Risk-free interest rate</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.1%</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1.1%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expected dividend yield</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Nil</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Nil</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expected stock price volatility (based on historical volatility)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>58.37%</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">60.47%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expected option life in years</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Exercise price</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.09</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.13</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share price at grant date</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.09</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.13</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Fair value at grant date</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.044</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.067</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expected forfeiture rate</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0%</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><B>(b) Equity instruments granted
under the Blanket Zimbabwe Indigenisation Transaction.</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 22.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">The equity instruments granted
under the Blanket Zimbabwe Indigenisation Transaction (refer note 5), excluding Blanket Employee Trust Services (Private) Limited
(BETS) accounted for under IAS 19 <I>Employee benefits</I>, have been accounted for as share-based payments under IFRS 2 <I>Share
based payments</I>.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">The fair value of the equity
instruments on the grant date of September 5, 2012 was determined for each transaction as being the sum of the present value of
the following components:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 7.1pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The value of the shares
at the point that any loans provided to purchase the shares or fund advance dividends are paid off;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 7.1pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The value of any advance
dividends paid to participants;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 7.1pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">The value of any &ldquo;trickle
dividends&rdquo;, being the 20% entitlements, paid to participants while the loans to purchase the shares are outstanding.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>20&#9;Share-based payments
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">To determine the fair value
and take into account the unique features of each transaction, the Monte Carlo Simulation technique was used as the valuation model
to allow for the uncertainty around the potential scenarios that affect the value of each arrangement. Projected market values
were estimated using a stochastic modelling methodology based on Geometric Brownian Motion model.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">Assumptions used based on the
grant date of September 5, 2012 were as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Fair value of Blanket</FONT></TD>
    <TD STYLE="width: 51%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">C$45,065</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expected volatility (based on historical volatility)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">65%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Risk free rates </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">USD swap curve with country specific adjustments</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Country specific adjustment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">17.3%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Dividend yield</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">14.8%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Withholding tax</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5% of dividends</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest on loans</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">10%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">Based on the above the share
based payment expense in the current year was as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>Share-based payment expenses</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 59%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>Note</I></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share options granted</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>408</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,101</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">354</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Option value of the Blanket indigenisation transaction</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>5</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>14,161</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total costs</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>14,569</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,101</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">354</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>21&#9;Provisions</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Site restoration</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Site restoration relates to the net
present value of the estimated cost of closing down the mine and site and environmental restoration costs, estimated to be paid
in 2022 (Blanket Mine) based on the estimated life of mine. Site restoration costs are capitalised to mineral properties at initial
recognition and amortised systematically over the estimated life of the mine.</P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 82%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P></TD>
    <TD NOWRAP STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at January 1, 2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,899</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign currency adjustment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(47)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unwind of discount</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">50</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Adjustment made during the period</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(117)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at December 31, 2011</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,785</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at January 1, 2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,785</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">Foreign currency adjustment</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(58)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Unwind of discount</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>43</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Adjustment made during the period</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(755)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Balance at December 31, 2012</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,015</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-current </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,015</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>21&#9;Provisions &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.5pt; text-align: justify">The discount rates currently
applied in the calculation of the net present value of the Blanket provision is 15% (2011 &ndash; 1.96% ). The Eersteling provision
for rehabilitation is accreted by 5% pa (2011 &ndash; 5%).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 6pt 4.3pt; text-align: justify"><B>22&#9;Trade and other payables</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 53%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade payables</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,855</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,087</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-trade payables and accrued expenses</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>920</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">754</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,775</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,841</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The Group&rsquo;s exposure
to currency and liquidity risk related to trade and other payables is disclosed in note 6 and note 24.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The Directors consider the
carrying amounts of trade and other payables as a reasonable approximation of their fair values.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>23&#9; Cash flow information</B></P>

<P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.25pt; text-align: justify">Items not involving cash
are as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Net finance costs (income)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>81</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">162</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income tax expense</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>12,818</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,464</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,042</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Profit on sale of investment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(43)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Site restoration</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(91)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">67</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(158)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payment expense &ndash; share option Plan</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>408</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,101</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">354</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payment expense &ndash; Blanket Indigenisation</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>14,161</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>3,392</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,983</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,586</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>330</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,884</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Write down of RBZ Bond and accrued interest</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,064</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Interest accrued on RBZ bond</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(264)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange loss</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(303)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(359)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other </FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">290</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(12)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>31,099</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">16,648</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,210</FONT></TD></TR>
</TABLE>
<P STYLE="font: 5pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>23&#9; Cash flow information
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Net changes in non-cash working
capital</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 66%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,151)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,858)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(37)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Prepayments</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>195</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(241)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">37</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other receivables</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,846</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,338)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(762)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other payables</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,073</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(41)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,712</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income taxes payable</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">295</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2,963</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,183)</FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">950</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>24&#9;Financial instruments</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Credit risk</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Exposure to credit risk</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The carrying amount of financial
assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The maximum exposure to credit
risk for trade and other receivables at the reporting date by geographic region was:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 59%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Carrying amount</B></FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Canada </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>30</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other regions </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,683</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,644</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Impairment losses</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">None of the trade and other
receivables are past due at the yearend date:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>24&#9;Financial instruments &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Liquidity risk</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The following are the contractual maturities
of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 29%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>December 31, 2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Carrying amount</B></FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>6 months or less</B></FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>6-12 months</B></FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1-2 years</B></FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2-5 years</B></FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>More than 5 years</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Non-derivative financial liabilities</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other payables</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,775</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,775</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe advance dividends payable</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,987</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,987</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,762</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,762</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">December 31, 2011</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">December 31, 2011</P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Non-derivative financial</B> <B>liabilities</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other payables </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,841</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,841</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bank overdraft </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">430</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">430</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,271</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,271</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Currency risk</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.65pt; text-align: justify">As the Group operates in
an international environment, some of the Group&rsquo;s financial instruments and transactions are denominated in currencies other
than the Canadian Dollar. The results of the Group&rsquo;s operations are subject to currency transaction risk and currency translation
risk. The operating results and financial position of the Group are reported in Canadian dollars in the Group&rsquo;s consolidated
financial statements.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">The fluctuation of the Canadian
dollar in relation to other currencies will consequently have an impact upon the profitability of the Group and may also affect
the value of the Group&rsquo;s assets and liabilities and the amount of shareholders&rsquo; equity.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0pt 4.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">As
noted below, the Group has certain financial assets and liabilities denominated in foreign currencies. The Group does not use any
derivative instruments to reduce its foreign currency risks. </FONT>To reduce exposure to currency transaction risk, the Group
maintains cash and cash equivalents in the currencies used by the Group to meet short&#8208;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">term
liquidity requirements.</FONT></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0pt 4.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Below is a summary of the assets
and liabilities denominated in a currency other than the Canadian dollar that would be affected by changes in exchange rates relative
to the Canadian dollar. The values are the Canadian dollar equivalent of the respective asset or liability that is denominated
in US dollars or South African rand.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>24&#9;Financial instruments &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Cash and cash equivalents</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>26,451</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,210</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Bank overdraft</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(430)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other receivables</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,687</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,474</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Trade and other payables</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4,858)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,413)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe advance dividend accrual</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,987)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 310px">&nbsp;</TD>
    <TD STYLE="width: 102px">&nbsp;</TD>
    <TD STYLE="width: 34px">&nbsp;</TD>
    <TD STYLE="width: 78px">&nbsp;</TD>
    <TD STYLE="width: 9px">&nbsp;</TD>
    <TD STYLE="width: 16px">&nbsp;</TD>
    <TD STYLE="width: 76px">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The following exchange rates
applied during the year:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Average rate during the year</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Year end date spot rate</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>December 31, 2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">December 31, 2011</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(In Canadian dollars)</I></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">USD 1</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.9998</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1.0236</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.9935</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1.0199</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Rand 1</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.122</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.1370</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.1162</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.1257</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Sensitivity analysis</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">A strengthening/ weakening
of the Canadian dollar, against the USD and Rand at December 31 would have increased (decreased) equity and profit or loss by the
amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably
possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for 2011.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 74%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Profit or loss</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><I>(Effect in thousands of Canadian dollars)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>December 31, 2012</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">USD (1 percent strengthening) </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>325</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>71</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Rand (1 percent strengthening)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>15</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">December 31, 2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">USD (1 percent strengthening) </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">630</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">56</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Rand (1 percent strengthening)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,323</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">132</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>


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    <!-- Field: /Page -->

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>24&#9;Financial instruments &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Interest rate risk</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Interest rate risk is the
risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">Unless otherwise noted, it
is the opinion of management that the Group is not exposed to significant interest rate risk as it has no debt financing apart
from short term borrowings utilized in Zimbabwe. The Group&rsquo;s cash and cash equivalents include highly liquid investments
that earn interest at market rates. The Group manages its interest rate risk by endeavouring to maximize the interest income earned
on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. The Group&rsquo;s policy
focuses on preservation of capital and limits the investing of excess funds to liquid term deposits in high credit quality financial
institutions.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">In the monetary policy statement
announced by the Governor of the Reserve Bank of Zimbabwe (&ldquo;RBZ&rdquo;) in February 2009, the debt owing by RBZ to Blanket
Mine was converted into a Special Tradable Gold-Backed Foreign Exchange Bond, with a term of 12 months and an 8% interest rate.
The Bond plus accrued interest is guaranteed by RBZ on maturity. Blanket Mine has been unable to sell the Bond at an acceptable
discount rate and the RBZ did not redeem the Bond on the initial maturity date nor any subsequently advised maturity dates. As
a result of the uncertain redemption date and the lack of information coming from the RBZ, the Bond has been written down to nil
whilst Blanket continues to retain legal ownership of the RBZ debt.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The basis for determining
all other fair values is disclosed in note 4.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>25&#9;Contingencies and
commitments</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">The Group may be subject
to various claims that arise in the normal course of business. Management believes there are no contingent liabilities of the Group
arising from claims and therefore no provision has been made.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">There are commitments to
purchase plant and equipment totalling $1,030 (2011 - $309) at year end.</P>

<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>26&#9;Related parties</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>Transactions with key management
personnel</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Key management personnel compensation:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">In addition to their salaries,
the Group also contributes to a defined contribution plan on behalf of eligible employees. For the terms of the plan refer to note
19: Defined Contribution Plan.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Employees, officers, directors,
consultants and other service providers also participate in the Group's share option program (see note 20).</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>26&#9;Related parties &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Key management personnel compensation
comprised.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 65%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Salaries and wages</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,357</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,289</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,109</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payments</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>401</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">947</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">308</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>1,758</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,236</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,417</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">Key management personnel and
director transactions:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">A number of key management personnel,
or their related parties, hold positions in other entities that result in them having control or significant influence over the
financial or operating policies of these entities.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">A number of these entities transacted
with the Group in the reporting period. The aggregate value of transactions and outstanding balances relating to key management
personnel and entities over which they have control or significant influence were as follows:</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Transactions</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Balance outstanding</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Year ended Dec 31,</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>As at Dec 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Note</I></B></FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Management fees, allowances and bonus paid or accrued to a company which provides the services of the Company&rsquo;s President</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(i)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>704</B></P></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">588</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">552</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Rent for office premises paid to a company owned by members of the President&rsquo;s family</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>43</B></P></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">48</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">49</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Legal fees and disbursements paid to a law firm where a Director is a partner</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>111</B></P></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">97</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">58</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>6</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Fees, allowances and interest paid to the past Chairman of the Board </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(ii)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right"><B>-</B></P></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">38</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Directors fees paid </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>215</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">145</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">130</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>48</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">60</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">(i) The Group has entered
into a management agreement with Epicure Overseas S.A. (&ldquo;Epicure&rdquo;), a Panamanian Group, for management services provided
by the President. The Group is required to pay a base annual remuneration adjusted for inflation and bonuses set out in the agreement.
In the event of a change of control of the Group, Epicure can terminate the agreement and receive a lump sum payment equal to 200%
of the remuneration for the year in which the change occurs.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">(ii) On January 31, 2005,
the Group entered into an agreement (the &ldquo;Chairman&rsquo;s Agreement&rdquo;) with the Group&rsquo;s former Chairman for services
as the non-executive Chairman of the board of directors of the Group. This agreement was terminated in December 2010.</P>


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<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt 4.3pt; text-align: justify"><B>27&#9;Group entities</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Ownership interest at December 31</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Country of incorporation</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2012</B></P></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Significant subsidiaries</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>%</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">%</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Holdings Zimbabwe (Private) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Mining Services Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Kadola Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zambia</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Mining (Zambia) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zambia</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Nama Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zambia</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Western Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zambia</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; letter-spacing: -0.1pt">Dunhill Enterprises Inc.</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Panama</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Eersteling Gold Mining Corporation Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">South Africa</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Fintona Investments (Proprietary) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">South Africa</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Greenstone Management Services (Proprietary) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">South Africa</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Greenstone Management Services Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">United Kingdom</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Maid O&rsquo; Mist (Pty) Ltd</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">South Africa</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Mapochs Exploration (Pty) Ltd</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">South Africa</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Caledonia Holdings (Africa) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Barbados</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Blanket (Barbados) Holdings Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Barbados</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Blanket Mine (1983) (Private) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; vertical-align: super; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><SUP>(2)</SUP>49</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">100</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Blanket Employee Trust Services (Private) Limited (BETS)<SUP> (1)</SUP></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Blanket Mine Employee Trust (Employee Trust)<SUP>(1)</SUP></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Zimbabwe</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="width: 294px">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 50px">&nbsp;</TD>
    <TD STYLE="width: 76px">&nbsp;</TD>
    <TD STYLE="width: 85px">&nbsp;</TD>
    <TD STYLE="width: 66px">&nbsp;</TD>
    <TD STYLE="width: 2px">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>(<FONT STYLE="font-size: 10pt; line-height: 115%">[1]</FONT>)</SUP>
BETS and the Employee Trust are consolidated as special purpose entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>(2) </SUP>Refer to Note 5</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>28&#9;Operating Segments</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group's operating segments
have been identified based on geographic areas.</P>

<P STYLE="font: 9pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The Group has four reportable
segments as described below, which are the Group's strategic business units. The strategic business units are managed separately
because they require different technology and marketing strategies. For each of the strategic business units, the Company&rsquo;s
CEO reviews internal management reports on at least a quarterly basis. The following geographical areas describe the operations
of the Group's reportable segments: Corporate, Zimbabwe, South Africa and Zambia.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify">The accounting policies of the
reportable segments are the same as described in note 4.</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-indent: 71.25pt">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>28&#9;Operating Segments
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">Information regarding the results of each
reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal
management report that are reviewed by the Group's CFO. Segment profit is used to measure performance as management believes that
such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within
these industries.</P>

<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>Information about reportable
segments</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 39%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Corporate</B></FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Zimbabwe</B></FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>South Africa</B></FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Zambia</B></FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">External Revenue</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>75,221</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>75,221</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Royalty</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,261)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(5,261)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Production costs</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(25,492)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(161)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(25,653)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Administrative expenses </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(2,391)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(214)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,450)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4,055)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share-based payment expenses </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(408)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(14,161)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(14,569)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,209)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(183)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,392)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(330)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(330)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>17</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>62</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>79</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Indigenisation costs</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(292)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,396)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(12)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,700)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange gain/(loss)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(4)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Segment profit before income tax</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,074)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>25,056</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,806)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>20,176</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income tax expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(11,506)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,312)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(12,818)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Segment profit after income tax</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,074)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>13,550</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,118)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Geographic segment assets:</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>19,581</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>9,850</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>5,821</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>42</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>35,294</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non Current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>55</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>25,126</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>669</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>10,683</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>36,533</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expenditure on property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>4,280</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>15</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>3,614</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,909</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B>Geographic segment liabilities</B></P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(909)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(7,258)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,106)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(7)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(9,280)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(6,621)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(307)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(6,928)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 5pt 0 10pt 4.3pt; text-align: justify"><B>28&#9;Operating Segments
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 5pt 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Corporate</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Zimbabwe</B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>South Africa</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Zambia</B></FONT></TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">External revenues</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55,704</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55,705</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Royalty</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,514)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,514)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Production costs</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(20,489)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(604)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(21,093)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,310)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(305)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,062)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,677)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payment expenses </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,101)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,101)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,773) </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(210)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,983)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Impairment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(217)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(217)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange gain/(loss)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">173</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">130</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">303</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Segment profit before income tax</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,237)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">29,536</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,705)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">20,594</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income tax expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(8,791)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">327</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(8,464)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Segment profit after income tax</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,237)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">20,745</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(5,378)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,130</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Geographic segment assets:</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,703</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,629</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,779</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">43</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">18,154</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">25,753</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,159</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,281</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">34,248</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expenditure on property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5,768</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">51</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,709</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,528</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Geographic segment liabilities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(691)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,535)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(333)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(7)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(4,566)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Non-current</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(7,502)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(320)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(7,822)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>28&#9;Operating Segments
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD>
    <TD NOWRAP STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Corporate</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Zimbabwe</B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>South Africa</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Zambia</B></FONT></TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Total</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-style: italic">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">External revenues</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">22,388</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">22,388</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Royalty</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(825)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(825)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Production costs</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(12,204)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(413)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(12,617)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,570)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(274)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(963)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,807)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Share-based payment expenses </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(354)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(354)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,367)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(219)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,586)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Other (expenses)/income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,064)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,064)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">269</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">270</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(267)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(267)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Foreign exchange gain/(loss)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(539)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">890</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">359</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Segment profit before income tax</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,916)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">5,117</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(704)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,497</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Income tax expense</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,042)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,042)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Segment profit after income tax</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,916)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">4,075</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(704)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Reconciliation of reportable
segment revenues, profit or loss, assets and liabilities and other material items</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 54%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Revenues</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total revenue for reportable segments</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>83,275</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">65,036</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">30,086</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Elimination of inter-segment revenue</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(8,054)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(9,331)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(7,698)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Consolidated revenue</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>75,221</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55,705</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">22,388</FONT></TD></TR>
</TABLE>
<P STYLE="font: 5pt/115% Times New Roman, Times, Serif; margin: 0 0 0 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 56%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Profit or loss</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total profit or loss before tax for the reportable segments</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>21,734</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">21,685</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">3,270</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Elimination of inter-segment profits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,558)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,091)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(773)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Consolidated profit before income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>20,176</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">20,594</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2,497</FONT></TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 56%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>28&#9;Operating Segments
        &ndash; (continued)</B></P></TD>
    <TD STYLE="vertical-align: top; width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total assets for reportable segments</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>73,439</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">54,128</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Elimination of inter-segment profits</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(1,612)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(1,726)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Consolidated total assets</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>71,827</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">52,402</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Total liabilities for reportable segments</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>16,208</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">12,388</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Other material items 2012</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 52%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Reportable segment totals</B></FONT></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Elimination of inter-segment profits</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Consolidated totals</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>79</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>79</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance cost</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(160)</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expenditure on property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>8,000</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(91)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>7,909</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,597)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>205</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>(3,392)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Other material items 2011</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 52%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Reportable segment totals</B></FONT></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Elimination of inter-segment profits</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Consolidated totals</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">55</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance cost</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(217)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(217)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expenditure on property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">9,413</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">885</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">8,528</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(3,157)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">174</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,983)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>28&#9;Operating Segments
&ndash; (continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>Other material items 2010</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 47%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Reportable segment totals</B></FONT></TD>
    <TD STYLE="width: 21%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Elimination of inter-segment profits</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Consolidated totals</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance income</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">270</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">270</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Finance cost</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(267)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(267)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Expenditure on property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,801</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">497</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">7,304</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Depreciation </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,610)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">24</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(2,586)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>Major customer</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Revenues from one customer of the
Group's Zimbabwe segment represents approximately $75,036 (2011- $55,848, 2010 - $22,388) of the Group's total revenues.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>29&#9;Subsequent events</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 35.45pt">(a)</TD><TD STYLE="text-align: justify">On January 24, 2013 Caledonia&rsquo;s shareholders approved a share consolidation which will become
effective on April 12, 2013. Caledonia&rsquo;s issued common shares will be consolidated on the basis of one post consolidation
share for every ten common shares currently in issue. The number of issued common shares will otherwise decrease from 517,061,780
to 51,706,178 following the implementation of the share consolidation, assuming no further common share transactions prior to the
effective date. The consolidated shares will commence trading on the TSX on April 12, 2013. After the consolidation the earnings
per share as stated on the <FONT STYLE="color: black">Consolidated Statements of Comprehensive Income and (Loss) would be as shown
below.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 21.3pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 53%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 7%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Earnings per share </B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Basic earnings per share</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.172</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.24</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.03</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Diluted earnings per share</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>0.172</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.24</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; line-height: 115%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">0.03</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 21.3pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The share consolidation will become effective
after the date of authorisation of the 2012 consolidated financial statements and is therefore treated as a non&ndash;adjusting
event after the reporting period.</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 35.45pt">(b)</TD><TD STYLE="text-align: justify">At the same meeting on January 24, 2013 Caledonia&rsquo;s shareholders resolved that the stated
capital account maintained in respect of the Common Shares be reduced by $140,000,000 Cdn., and an offsetting increase shall be
made to the contributed surplus account to be recorded on the Company&rsquo;s financial statements.</TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>29&#9;Subsequent events &ndash;
(continued)</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt">(c)</TD><TD STYLE="text-align: justify">On February 22, 2013 Caledonia paid a maiden dividend of $0.005 per share to all shareholders of
record as of February 8, 2013. The gross dividend payable amounted to $ 2,585,309</TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="color: black">(d)</FONT></TD><TD STYLE="text-align: justify">During January 2013 three directors of the Company exercised share options and acquired 2,600,000
shares in the company</TD></TR></TABLE>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>




<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Directors and Management at March 26, 2013</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; text-align: justify; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; text-align: justify; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; text-align: justify; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 47%">&nbsp;</TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>BOARD OF DIRECTORS</B></FONT></TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>OFFICERS</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">C. R. Jonsson (2) (3) (4) (5) - Chairman</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">C. R. Jonsson - Chairman</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Principal of Tupper Jonsson&amp; Yeadon</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Corporate Secretary</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Barristers &amp; Solicitors</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Principal of Tupper Jonsson&amp; Yeadon</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Vancouver, British Columbia,</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Barristers &amp; Solicitors</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Canada</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Vancouver, British Columbia,</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Canada</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">S. E. Hayden(3) (4) (5) (6) (7)</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">S. E. Hayden</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>President and Chief Executive Officer</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>President and Chief Executive Officer</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Johannesburg, South Africa</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Johannesburg, South Africa</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">J. Johnstone (1) (6)</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">S. R. Curtis</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Retired Mining Engineer</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Vice-President Finance and Chief Financial Officer</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Gibsons, British Columbia, Canada</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Johannesburg, South Africa </I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">F. C. Harvey (1) (6)</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Dr. T. Pearton (6)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Retired Executive</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Vice-President Exploration</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Oakville, Ontario, Canada</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Johannesburg, South Africa</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">R. W. Babensee (1) (2)</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">J.M. Learmonth (7)</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Chartered Accountant &ndash; Retired</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Vice-President Business Development</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Toronto, Ontario, Canada</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Johannesburg, South Africa</I></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">S. R. Curtis (5) (7)</FONT></TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Vice-President Finance and Chief Financial officer</I></FONT></TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Johannesburg, South Africa</I></FONT></TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>BOARD COMMITTEES</B></FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">L.A. Wilson (1) (7)</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">(1) Audit Committee</FONT></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Non- executive Director</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2) Compensation Committee</FONT></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>New York, United States of America</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">(3) Corporate Governance Committee</FONT></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">(4) Nominating Committee</FONT></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">J. L. Kelly (1) (7)</FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">(5) Disclosure Committee</P>
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><I>&nbsp;</I></P></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Non- executive Director </I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">(6) Technical Committee</P>
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>New York, United States of America</I></FONT></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">(7) Strategic Planning Committee</P>
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">R. Patricio (7)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="5" STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Non- executive Director</I></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="5" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt 4.3pt; text-align: justify"><I>Toronto, Ontario,
Canada</I></P></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-style: italic; line-height: 115%; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 54%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 18%">&nbsp;</TD>
    <TD STYLE="width: 19%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt 4.3pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><B>Caledonia Mining Corporation</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.3pt"><B>Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>For the years ended December 31, 2012, 2011 and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.25pt"><B>(<I>in thousands of Canadian dollars</I>)</B></P>



<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CORPORATE DIRECTORY</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>SOLICITORS</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CORPORATE OFFICES</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Tupper, Jonsson &amp; Yeadon</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Canada - Head Office</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">1710-1177 West Hastings St, Vancouver,</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Caledonia Mining Corporation</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">British Columbia V6E 2L3 Canada</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Suite 1201, 67 Yonge Street</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Toronto, Ontario M5E 1J8 Canada</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Borden Ladner Gervais LLP</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tel:(1)(416) 369-9835 Fax:(1)(416) 369-0449</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Suite 4100, Scotia Plaza</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">info@caledoniamining.com</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">40 King Street West</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Toronto, Ontario M5H 3Y4 Canada</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>South Africa &ndash; Africa Office</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Greenstone Management Services (Pty) Ltd.&#9;&#9;AUDITORS</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>AUDITORS</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">P.O. Box 834&#9;&#9;<B>&#9;&#9;BDO Dunwoody LLP</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">BDO Canada LLP</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Saxonwold 2132&#9;&#9;&#9;<B>Chartered Accountants</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Chartered Accountants</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">South Africa&#9;&#9;&#9;Suite 3300, 200 Bay Street</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Suite 3300, 200 Bay Street</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tel: (27)(11) 447-2499 Fax: (27)(11) 447-2554</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Royal Bank Plaza, South Tower</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Toronto, Ontario M5J 2J8 Canada</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Zambia</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Caledonia Mining (Zambia) Limited</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REGISTRAR &amp; TRANSFER AGENT</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">P.O. Box 36604</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Equity Transfer Services Inc.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lusaka, Zambia&#9;&#9;&#9;<B>&#9;&#9;</B>Suite 400 200 University Ave</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Suite 400&nbsp;200 University Ave.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tel:(260)(1) 29-1574 Fax(260)(1) 29-2154</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Toronto, Ontario M5H 4H1 Canada</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tel: (416) 361 0152 Fax: (416) 361 0470</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>BANKERS</B></FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Zimbabwe</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Canadian Imperial Bank of Commerce</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Caledonia Holdings Zimbabwe (Limited)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">6266 Dixie Road</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">P.O. Box CY1277</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mississauga, Ontario L5T 1A7 Canada</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Causeway, Harare</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Zimbabwe</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOMADS AND BROKERS (AIM)</B></FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tel: (263) (4) 701&nbsp;152/4 Fax: (263)(4) 702 248</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Collins Stewart Europe Limited</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">88 Wood Street</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CAPITALIZATION </B>at March 26, 2013&#9;&#9;&#9;<B>RBC Capital Markets</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">London EC2V 7QR</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Authorised: Unlimited&#9;&#9;&#9;71 Queen Victoria Street</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fax: +44 20 7523 8134</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Shares, Warrants and Options Issued:</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Common Shares: 517,061,780&#9;&#9;&#9;Tel: +44 20 7653 4000</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>SHARES LISTED</B></FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Warrants:&#9; Nil</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Toronto Stock Exchange Symbol &ldquo;CAL&rdquo;</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Options: 30,696,500</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">NASDAQ OTC BB Symbol &quot;CALVF&quot;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">London &ldquo;AIM&rdquo; Market Symbol &ldquo;CMCL&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; font-weight: bold; line-height: 115%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Web Site: </B>http://www.caledoniamining.com</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 4.3pt; text-align: justify; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 5px">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>mda.htm
<DESCRIPTION>CALEDONIA MINING CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS MARCH 28, 2013
<TEXT>
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    <TD STYLE="width: 50%"><B>CALEDONIA MINING CORPORATION&#9;</B></TD>
    <TD STYLE="width: 50%; text-align: right; vertical-align: bottom"><B>MARCH 27, 2013</B></TD></TR>
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<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-indent: -2in">&nbsp;</P>

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<P STYLE="font: 11pt/16.15pt Times New Roman, Times, Serif; margin: 0 124.15pt 10pt 0; text-align: justify"><B>Management&rsquo;s
Discussion and Analysis &#9;</B></P>

<P STYLE="font: 11pt/11.55pt Times New Roman, Times, Serif; margin: 0 0 11.5pt; text-align: justify"><I>This discussion and analysis
of the consolidated operating results and financial position of Caledonia Mining Corporation (&quot;Caledonia&rdquo; or the &ldquo;Company&rdquo;)
is for the fiscal year ended December 31, 2012 (the &ldquo;Year&rdquo;), the quarter ended December 31, 2012 (&ldquo;Q4&rdquo;
or the &ldquo;Quarter&rdquo;), and the period ending March 27, 2013. It should be read in conjunction with the Consolidated Financial
Statements as at December 31, 2012 which are available from the System for Electronic Data Analysis and Retrieval at <U>www.sedar.com</U>
or from Caledonia&rsquo;s website at <U>www.caledoniamining.com</U>. The Consolidated Financial Statements and related notes have
been prepared using accounting policies consistent with IFRS. </I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Note that all currency references in
this document are to Canadian Dollars, unless otherwise stated. </I></B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>Contents of the MD&amp;A</B></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">Forward-Looking Statements</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify">Overview</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify">Highlights</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">4.</TD><TD STYLE="text-align: justify">Summary Financial Results</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">5.</TD><TD STYLE="text-align: justify">Environmental Policy</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">6.</TD><TD STYLE="text-align: justify">Operations at the Blanket Gold Mine, Zimbabwe</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.1.</TD><TD STYLE="text-align: justify">Safety, Health and Environment</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.2.</TD><TD STYLE="text-align: justify">Social Investment and Contribution to the Zimbabwean Economy</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.3.</TD><TD STYLE="text-align: justify">Gold Production</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.4.</TD><TD STYLE="text-align: justify">Operating Costs</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.5.</TD><TD STYLE="text-align: justify">Underground</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.6.</TD><TD STYLE="text-align: justify">Capital Projects</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.7.</TD><TD STYLE="text-align: justify">Mineral Reserves and Resources</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.8.</TD><TD STYLE="text-align: justify">Indigenisation</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.9.</TD><TD STYLE="text-align: justify">Opportunities</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">6.10.</TD><TD STYLE="text-align: justify">Outlook</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">7.</TD><TD STYLE="text-align: justify">Exploration and Project Development<FONT STYLE="color: windowtext"><B> </B></FONT></TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">7.1.</TD><TD STYLE="text-align: justify">Nama Copper Project, Zambia<FONT STYLE="color: windowtext"><B> </B></FONT></TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">7.2.</TD><TD STYLE="text-align: justify">Nama Cobalt Project, Zambia</TD></TR></TABLE>

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<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 28.35pt">7.3.</TD><TD STYLE="text-align: justify">Gold: Blanket Gold Mine, Zimbabwe</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">8.</TD><TD STYLE="text-align: justify">Investing</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">9.</TD><TD STYLE="text-align: justify">Financing</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">10.</TD><TD STYLE="text-align: justify">Liquidity and Capital Resources</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">11.</TD><TD STYLE="text-align: justify">Off-Balance Sheet Arrangements</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">12.</TD><TD STYLE="text-align: justify">Related Party Transactions</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">13.</TD><TD STYLE="text-align: justify">Critical Accounting Policies</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">14.</TD><TD STYLE="text-align: justify">Securities Outstanding</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">15.</TD><TD STYLE="text-align: justify">Risks</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">16.</TD><TD STYLE="text-align: justify">Controls</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">17.</TD><TD STYLE="text-align: justify">Qualified Person</TD></TR></TABLE>

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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>1.</B></TD><TD STYLE="text-align: justify"><B>FORWARD-LOOKING STATEMENTS</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0 0.1in; text-align: justify">This Management&rsquo;s Discussion
and Analysis contains certain forward-looking statements relating but not limited to Caledonia&rsquo;s expectations, intentions,
plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as &ldquo;anticipate&rdquo;,
&ldquo;believe&rdquo;, &ldquo;expect&rdquo;, &ldquo;goal&rdquo;, &ldquo;plan&rdquo;, &ldquo;intend&rdquo;, &ldquo;estimate&rdquo;,
&ldquo;could&rdquo;, &ldquo;should&rdquo;, &ldquo;may&rdquo; and &ldquo;will&rdquo; or similar words suggesting future outcomes,
or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking
information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects and
timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties.
Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to,
failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital
and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental
or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of
projects and other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual
results to differ materially from expected results.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0 0.1in; text-align: justify">Potential shareholders and prospective
investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could
cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are cautioned not
to place undue reliance on forward-looking information. By its nature, forward-looking information involves many assumptions, risks
and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and
various future events will not occur. Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking
information whether as a result of new information, future events or other such factors which affect this information, except as
required by law.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0 0.1in; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><B>2.</B></TD><TD STYLE="text-align: justify"><B>OVERVIEW</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">Caledonia is an exploration, development
and mining corporation focused on Southern Africa. Following the implementation of indigenisation, Caledonia&rsquo;s primary assets
are a 49% interest in an operating gold mine in Zimbabwe (&ldquo;Blanket&rdquo; or the &ldquo;Blanket Mine&rdquo;) and a 100% interest
in a base metals exploration project in Zambia (the &ldquo;Nama Project&rdquo;). Caledonia&rsquo;s shares are listed in Canada
on the Toronto Stock Exchange as &ldquo;CAL&rdquo;, on London&rsquo;s AIM as &ldquo;CMCL&rdquo; and are also traded on the American
OTCQX as &ldquo;CALVF&rdquo;.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-size: 11pt"><B>3.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><B>HIGHLIGHTS </B></FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/110% Times New Roman, Times, Serif; margin: 6pt 4.55pt 0.05in 0; text-align: justify; text-indent: 0in"><B>Operational
Highlights</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 1pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">11,821oz of gold were
produced during Q4, a 12% increase in gold production on Q4 2011 (the &ldquo;comparable quarter&rdquo;) of 10,533oz and an 8% decrease
on Blanket&rsquo;s record quarterly gold production in Q3 2012 (the &ldquo;preceding quarter&rdquo;) of 12,918oz. </FONT> G<FONT STYLE="font: 11pt Times New Roman, Times, Serif">old
production was lower than the preceding quarter as the mined ore gold grade returned towards the planned long term mine reserve
grade average of 3.84g/t. The gold production of 11,821oz achieved in Q4 was 18% higher than the targeted production of 10,000oz/quarter.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 1pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Gold production for
the 12 months to December 31, 2012 was 45,465oz, a 27% increase over the gold production in the 12 months to December 31, 2011
(35,826oz). Gold production for 2012 is a new annual production record for Blanket since it commenced operations in 1906.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 1pt 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt">Blanket&rsquo;s cash operating costs in Q4 increased to US$554 per ounce of gold produced
compared to US$508 in the preceding quarter and US$521 in the comparable quarter. The increase in costs in the Quarter was due
to the reduced production compared to the previous quarter and the higher labour and consumable costs incurred in the Quarter.</FONT></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 1pt 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt">Blanket&rsquo;s cash operating costs for the Year were US$571 per ounce compared to US$581
in 2011. The reduction in costs was due primarily to increased production which offset increases in input costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 1pt 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt">All-inclusive costs per ounce of gold produced for the Quarter (i.e. including sustaining
capital investment and general and administrative expenses) were US$741/oz compared to US$669/oz in the preceding quarter and US$752/oz
in the comparable quarter. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt">All-inclusive costs for the year 2012 were US$759/oz compared to US$895/oz in 2011, the reduction
being largely due to the higher level of production in 2012 than 2011 which meant that fixed costs were spread over more ounces
of gold produced.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 14.2pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt/110% Times New Roman, Times, Serif; margin: 6pt 4.55pt 0.05in 0; text-align: justify; text-indent: 0in"><B>Financial
Highlights</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Gold Sales during Q4 were 10,337oz at an
average sales price of US$1,703/oz compared to 12,918oz at an average sales price of US$1,664/oz in the preceding quarter and 9,329oz
at an average sales price of US$1,681/oz in the comparable quarter.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: -14.2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Gold Sales for the 2012 Year were 45,181oz
at an average sales price of US$1,666oz compared to 35,504oz at an average sales price of US$1,577/oz in 2011. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Gross profit (i.e.
after depreciation and amortization but before administrative expenses) for Q4 was $9,250,000 compared to $12,602,000 in the preceding
quarter and $9,012,000 in the comparative quarter. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Gross profit for
the Year increased by 41% to $40,915,000 (2011: $29,115,000).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Net profit after tax for Q4 attributable
to Caledonia shareholders was $3,353,000 compared to a loss of $7,240,000 in the preceding quarter and a profit of $1,369,000 in
the comparable quarter. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Net profit after
tax for the Year attributable to Caledonia shareholders was $8,720,000 compared to $12,130,000 in 2011. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Net profit for 2012
and the net loss for the preceding quarter was after a non-cash, non-recurring charge of $14,569,000 for share based payments of
which $14,161,000 was due to the sale of 41% of Blanket to Indigenous Zimbabweans, for which Blanket provided facilitation loans,
and for the donation of 10% of Blanket to the Gwanda Community Share Ownership Trust (&ldquo;GCSOT&rdquo;) in terms of the Indigenisation
Agreements signed by Blanket Mine. Further explanation of the basis of this charge is set out in Note 5 to the Consolidated Financial
Statements.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Adjusted basic earnings
per share for 2012 (after excluding the effect of the non-cash, non-recurring indigenisation charge and unrealised foreign exchange
profits) was 4.12 cents per share &ndash; a 31% increase on 2011.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">At December 31, 2012,
the Company had cash and cash equivalents of $27,942,000 compared to $24,615,000 at September 30, 2012, and $9,686,000 at December
31, 2011.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Cash flow from operations
in 2012 before capital investment was $29,721,000 (2011: $17,428,000).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">During Q4 Blanket
made payments to the community and payments in respect of direct and indirect taxes, royalties, licence fees, levies and other
payments to the Government of Zimbabwe totalling US$5,931,000 compared to US$8,474,000 in the preceding quarter, and US$5,024,000
in the comparative quarter. The total of such payments in 2012 was $23,985,000 (2011: $13,920,000).</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 14.2pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: justify; text-indent: 0in"><B>Indigenisation
</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 4.55pt">Transactions that implemented the Indigenisation of Blanket were completed
on September 5<SUP>th</SUP> 2012. Following completion of these transactions Caledonia now owns 49% of Blanket.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 4.55pt">Caledonia has received the Certificate of Compliance from the Government
of Zimbabwe which confirms that Blanket is fully compliant with the Indigenisation and Economic Empowerment Act.</TD></TR></TABLE>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 4.55pt">As an indigenised entity, Blanket can now develop and is now implementing
its long term growth strategy. The recently re-constituted Blanket board, which includes representatives of the Indigenous Zimbabwean
shareholders, approved a capital investment programme for 2013 and a 4 year growth strategy for 2014 to 2017. This investment programme,
which was endorsed by the Caledonia Board, is estimated at US$37m, will be funded from Blanket&rsquo;s internally generated cash,
and is expected to result in progressive increases in gold production to approximately 76koz in 2016.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: 11pt/110% Times New Roman, Times, Serif; margin: 6pt 4.55pt 0.05in 0; text-align: justify; text-indent: 0in"><B>Exploration
Highlights. </B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0.05in"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">The 2012 drilling
programme at the Company&rsquo;s 100% owned Nama Base Metals Projects in Zambia, comprised 10,903m over 20 holes and confirmed
the existence of a copper-bearing mineralised zone. Shallow drilling will be undertaken on the identified zone to improve resource
definition. Initial exploration work will also be carried out on additional zones of mineralisation that have been identified to
the west and south of the mineralised zone. Caledonia expects to issue a NI 43-101 compliant copper resource statement by June
30, 2013 and a preliminary feasibility study by the end of 2013, on the possible mining of near-surface copper oxide material.
</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in"><B>Corporate
Highlights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt">On</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"> </FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">January
24, 2013 a Special Meeting of the Caledonia Shareholders passed special resolutions approving a reduction of Stated Capital of
Caledonia&rsquo;s common shares by $140m and approving the consolidation of Caledonia&rsquo;s issued and outstanding common shares
on the basis of one (1)&nbsp;post-consolidation common share for every ten (10) common shares currently issued. Pursuant to these
resolutions being passed: </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Courier New, Courier, Monospace">o</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">on February 22, 2013
Caledonia paid its initial dividend of one-half Canadian cent ($0.005) per pre-consolidation share; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Courier New, Courier, Monospace">o</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">on March 14, 2013
Caledonia announced that the share consolidation will take effect on April 12<SUP>th</SUP> 2013. </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 14.2pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: justify; text-indent: 0in"><B>Dividend
Policy</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.55pt"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Caledonia will continue
to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take
advantage of any further opportunities that may arise without the need to raise third party finance. The Caledonia Board will assess
further dividend payments at least annually in light of Caledonia&rsquo;s financial performance and financial resources at that
time. </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 4.55pt 6pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><B>4.</B></TD><TD STYLE="text-align: justify"><B>SUMMARY FINANCIAL RESULTS</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The table below sets out the consolidated
profit and loss for the years ended December 31, 2012, 2011 and 2010, and the quarters ended December 31, 2012 and 2011 prepared
under IFRS.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="8" STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>Consolidated Statement of
        Comprehensive Income </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>(<I>In thousands of Canadian
        dollars except per share amounts)</I></B></P></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-family: Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>For the 3 months ended Dec 31</B></FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>For the 12 months ended
        </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Dec 31</B></P></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-bottom: 4.5pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-bottom: 4.5pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Revenue</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>17,612</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">15,972</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>75,221</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">55,705</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">22,388</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Royalty</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,227)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(723)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(5,261)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(2,514)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(825)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Production costs</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(6,502)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(5,233)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(25,653)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(21,093)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(12,617)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Depreciation</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(633)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1,004)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(3,392)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(2,983)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(2,586)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Gross profit</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>9,250</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">9,012</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>40,915</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">29,115</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6,360</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Administrative expenses</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,108)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1,418)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(4,055)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(3,351)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(2,807)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Share-based payment expense</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(14,569)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1,101)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(354)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Indigenisation expenses <SUP>(i)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(425)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,700)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(326)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Foreign exchange gain/(loss)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>570</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">143</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(4)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">303</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">359</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Impairment</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(330)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(330)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(3,884)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Other income/(expense)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(2)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1,064)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Results from operating activities</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>7,957</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3,851</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>20,257</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">20,756</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2,494</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Net finance income/(cost)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>25</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">28</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(81)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(162)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Profit before tax</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>7,982</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3,879</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>20,176</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">20,594</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2,497</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Tax expense</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(4,032)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(2,510)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(12,818)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(8,464)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1,042)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Profit for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>3,950</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,369</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Other comprehensive (loss)/income</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Valuation of investments to fair value</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(45)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Foreign currency translation differences for foreign operations</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>370</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(812)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,589)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">265</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0in">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0in">(1,404)</P></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Other comprehensive income/(loss) for the period, net of income tax</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>370</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(812)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,589)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">265</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1,449)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total comprehensive income for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>4,320</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">557</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>5,769</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Profit/(loss) attributable to:</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Owners of the Company</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>3,353</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,369</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>8,720</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>597</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,362)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Profit for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>3,950</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,369</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total comprehensive income/(loss) attributable to:</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Owners of the Company</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>3,685</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">557</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>7,112</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>635</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(1,343)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total comprehensive income for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>4,320</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">557</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>5,769</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,395</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Earnings per share (cents)</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Basic </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>0.64</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.27</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>1.72</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2.42</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.30</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Diluted </FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>0.64</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.25</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>1.72</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2.38</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.30</FONT></TD></TR>
<TR>
    <TD STYLE="width: 313px">&nbsp;</TD>
    <TD STYLE="width: 36px">&nbsp;</TD>
    <TD STYLE="width: 68px">&nbsp;</TD>
    <TD STYLE="width: 68px">&nbsp;</TD>
    <TD STYLE="width: 1px">&nbsp;</TD>
    <TD STYLE="width: 68px">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 0px">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 50%; border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Adjusted earnings per share (cents) <SUP>(ii)</SUP></B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 9%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Basic</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>0.60</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1.02</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>4.12</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3.14</FONT></TD>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.26</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Diluted</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>0.60</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.3pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.94</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>4.10</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3.08</FONT></TD>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">0.26</FONT></TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 9pt"><I>(i)</I></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 9pt"><I>Expenses relating to the Zimbabwe indigenisation transaction were
previously included in Administrative expenses. These expenses are now presented separately as they are relevant to the understanding
of Caledonia&rsquo;s financial performance. The presentation of comparative figures has been aligned accordingly. </I></FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 9pt"><I>(ii)</I></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 9pt"><I>Adjusted earnings per share (&ldquo;EPS&rdquo;) is a non-IFRS measure
which aims to reflect Caledonia&rsquo;s ordinary trading performance. The adjusted EPS calculation excludes any share based expense
arising on the implementation of indigenisation and the impairment and the foreign exchange profit, all of which are included in
the calculation of EPS under IFRS. </I></FONT></TD></TR></TABLE>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenues in the Quarter and the Year increased
due to the combined effects of increased gold production and the higher achieved gold price. Further discussion of Blanket&rsquo;s
gold production is set out in section 6.3</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The royalty in the Quarter and the Year increased
due to the combined effect of higher gold production, the higher achieved gold price and an increase in the royalty rate from 4%
to 7% with effect from 1 January 2012.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On-mine production costs in the Quarter were
U$$6,502,000 and US$25,653,000 for the Year. Further discussion of Blanket&rsquo;s production costs, including discussion of Blanket&rsquo;s
inclusive cost of production (i.e. including sustaining capital investment, general and administrative costs and royalties) is
set out in section 6.4.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The share based payment expense incurred in
the Year includes $14,161,000 which is a non-recurring, non-cash expense which resulted from the implementation of Indigenisation
in Q3 of 2012 and reflects the difference between the fair value of the equity instruments granted to indigenous parties and facilitation
loans, taking into account all the interest terms and advance dividend rights. Further explanation of the basis of calculation
of this charge is set out in Note 20 to the Annual Consolidated Financial Statements.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Indigenisation expenses relate to the donation
of US$1 million to the Gwanda Community Share Ownership Trust, advisory fees and other costs relating to the negotiation and implementation
of indigenisation at Blanket.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The foreign exchange gain incurred in the Quarter
is a non-cash item which reflects a reallocation to equity of the unrealised foreign exchange loss in inter-company accounts shown
in the preceding quarter. The profit or loss on foreign currency translation is a non-cash item which reflects the loss on the
translation into Canadian dollars of the balance sheets and income statements of all subsidiaries that do not use the Canadian
dollar as their functional currency.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The tax expense for the Quarter and the Year
is analysed in Note 12 to the Annual Consolidated Financial Statements. The tax expense includes Zimbabwean income tax on profits
arising at the Blanket Mine, Zimbabwean withholding tax on dividends and management fees paid and South African income tax on the
receipt of management fees. The tax charge for 2012 also includes an accrual of $806,000 in respect of tax and penalties arising
from the disallowance by the Zimbabwean Revenue Authority of a deduction of amounts owed to Blanket by the Reserve Bank of Zimbabwe
in respect of Gold Bonds. Blanket has appealed this matter to the High Court.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The non-controlling interest attributable to
the indigenisation of Blanket reflects the participation of Blanket&rsquo;s Indigenous Shareholders in the economic benefits generated
by Blanket from the effective date of the indigenisation and is explained in Note 5 of the Annual Consolidated Financial Statements.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The adjusted earnings per share is calculated
on the Owners&rsquo; share of profit but before the non-cash, non-recurring expenses for the share based payment arising on indigenisation,
indigenisation expenses and before the non-cash charge for foreign exchange losses.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below sets out<FONT STYLE="font-size: 10pt; color: windowtext">
</FONT>the consolidated statement of cash flows for the twelve months to December&nbsp;31, 2012, 2011 and 2010 prepared under IFRS.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="6" STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>Consolidated Statement of
        Cash Flows </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><I>(In thousands of Canadian
        dollars)</I></P></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>For the 12 months ended Dec 31</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Cash flows from operating activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Profits for the period</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>7,358</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Adjustments for:</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Adjustments to reconcile net cash from operations</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>31,099</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">16,648</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">4,210</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Changes in non-cash working capital</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>2,963</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(3,183)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">950</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Cash flows provided from operations </B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>41,420</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">25,595</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6,615</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Net interest paid</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(81)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(162)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(3)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Tax paid</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(11,618)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(8,005)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(1)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Net cash from operating activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>29,721</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">17,428</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6,611</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Cash flows from investing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Property, plant and equipment additions</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(7,909)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(8,528)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(7,304)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Proceeds on sale of investment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>38</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">51</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Net cash used in investing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(7,871)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(8,528)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(7,253)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Cash flows from financing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Bank overdraft increase/(decrease)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(430)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(317)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">159</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Advance dividend paid</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(3,739)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Proceeds from the issue of share capital</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>974</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">38</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Net cash from (used in) financing activities</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(3,195)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(279)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">159</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Net increase in cash and cash equivalents</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>18,655</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">8,621</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(483)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Cash and cash equivalents at beginning of the year </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>9,686</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,145</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,622</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Effect of exchange rate fluctuations on cash held</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>(399)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">(80)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Cash and cash equivalents at year end </B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">9,686</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,145</FONT></TD></TR>
<TR>
    <TD STYLE="width: 51%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash generated by operations at the Blanket
Mine increased substantially due to the higher gold production, and the higher gold prices realised and the reduced unit cash operating
costs.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Blanket&rsquo;s working capital requirements
reduced due to inter alia lower trade receivables and higher trade and other payables at the year end.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Tax payments increased as a result of the higher
royalty rate which was levied on increased turnover and the higher profits at Blanket Mine that were assessable for Zimbabwean
Income Tax and taxes payable in South Africa.</P>


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    <!-- Field: /Page -->

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Capital expenditure in the Year primarily relates
to expenditure at Blanket Mine and at Nama in Zambia. Further information on capital investment is set out in section 8.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Proceeds from the issue of share capital reflects
the exercise of share options.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below sets out the consolidated statement
of Caledonia&rsquo;s financial position at December 31, 2012, 2011 and 2010 prepared under IFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="9" STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-family: Times New Roman, Times, Serif; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Consolidated Statements of Financial Position </B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-style: italic"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><I>(In thousands of Canadian dollars) </I></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-style: italic"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><I>As at</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Dec 31,</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Dec 31,</FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Dec, 31</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>2012</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2011</FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>$</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-bottom: 4.5pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total non-current assets</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>36,533</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">34,248</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">31,978</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Inventories</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>5,508</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">4,482</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2,624</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Prepayments</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>126</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">334</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">93</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Trade and other receivables</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>1,718</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3,652</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">2,314</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Cash and cash equivalents</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>27,942</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">9,686</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">1,145</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total assets</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>71,827</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">52,402</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">38,159</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-bottom: 4.5pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total non-current liabilities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>6,928</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">7,822</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">7,050</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Trade and other payables</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>5,775</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3,841</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">3,882</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Zimbabwe advance dividend accrual</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>1,987</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Income taxes payable</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>1,518</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">295</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Bank overdraft</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">430</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">747</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total liabilities</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>16,208</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">12,388</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">11,679</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total equity</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>55,619</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">40,014</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">26,480</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Total equity and liabilities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; text-indent: 0in; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>71,827</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">52,402</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">38,159</FONT></TD></TR>
<TR>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Trade and other receivables as at December
31, 2012 includes VAT receivable and deposits for stores and equipment. There was no receivable as at December 31, 2012 in respect
of bullion sales.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Zimbabwe advance dividend accrual reflects
the amount of US$2 million of advance dividends which is to be paid to GCSOT during February and April 2013 in terms of the indigenisation
transactions.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following information is provided for each
of the eight most recent quarterly periods ending on the dates specified. The figures are extracted from underlying unaudited financial
statements that have been prepared using accounting policies consistent with IFRS.</P>

<P STYLE="font: 10pt/11.55pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-bottom: 4.5pt; padding-left: 8.8pt; font-size: 10pt; text-indent: -8.8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Restated <SUP>1</SUP></B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 28%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-bottom: 4.5pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>($000&rsquo;s-except per share amounts)</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Mar 31/11</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>June </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>30/11</B></P></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Sept 30/11</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Dec 31/11</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Mar 31/12</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>June </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>30/12</B></P></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Sept 30/12</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext"><B>Dec 31/12</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext">Revenue from operations</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">11,226</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">11,990</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">16,517</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">15,972</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">17,503</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">18,612</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">21,494</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">17,612</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext">Profit/ (loss) after tax from operations</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1,894</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">2,874</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">6,126</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1,369</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">7,111</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">5,497</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">(9,199)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">3,950</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext">Earnings/(loss) per share &ndash; basic (cents)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.38</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.57</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1.23</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.27</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1.4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1.1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">(1.4)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.64</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext">Earnings/(loss) per share -diluted (cents)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.35</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.54</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1.13</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.27</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1.4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">1.1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">(1.4)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">0.64</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: windowtext">Cash and cash equivalents</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,217</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,033</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,847</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,686</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,288</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18,323</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,615</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif; color: windowtext">27,942</FONT></TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 3.3pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-size: 9pt"><I>(1)</I></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 9pt"><I>These quarterly figures have been restated to reflect the results
having used the same IFRS policies as adopted in the annual financial statements. There is no change to the quarterly earnings
per share for the 2011 quarters.</I></FONT></TD></TR></TABLE>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The difference between the figures for
Q4 of 2012 and the preceding quarter and the comparative quarter are discussed in this MD&amp;A. Differences in the figures for
Q3 of 2012 and earlier quarters are discussed in previous MD&amp;A&rsquo;s.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>5.</B></TD><TD STYLE="text-align: justify"><B>ENVIRONMENTAL POLICY</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Caledonia is committed to
maintaining the highest environmental standards such that its operations and/or its products do not present an unacceptable risk
to its employees, its customers, the public or the environment. Caledonia and its subsidiaries operate under Caledonia&rsquo;s
Environmental Policy that encompasses the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 21.3pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt">Caledonia directs its employees and its subsidiary companies to conduct their exploration
and operational activities in a professional, environmentally responsible manner, in compliance with or above the standards of
all applicable legislation and policies in the jurisdictions in which they undertake business. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 21.3pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt; color: black">Caledonia liaises closely with the applicable government regulatory bodies and
the public to optimize communication and an understanding of the Caledonia&rsquo;s activities in relation to environmental protection.
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 21.3pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt; color: black">Caledonia is committed to the diligent application of technically proven, economically
feasible, environmental protection measures throughout its exploration, development, mining, processing and decommissioning activities.
</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.05pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 11pt Symbol; color: black">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black">Caledonia, on a regular basis,
monitors its environmental protection management programs to ensure their compliance at </FONT>or above the standards of <FONT STYLE="color: black">applicable
national and international regulatory requirements. </FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: black">It
is the responsibility of all the</FONT> <FONT STYLE="color: black">employees and management of Caledonia and its subsidiaries to
carry out their employment activities in accordance with this code of practice. Operational line management personnel have the
direct responsibility for regular environmental protection management. </FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>6.&#9;OPERATIONS AT THE BLANKET GOLD
MINE, ZIMBABWE</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 11pt Times New Roman, Times, Serif; margin-top: 4pt; margin-bottom: 4pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">6.1</TD><TD STYLE="text-align: justify">Safety, Health and Environment (&ldquo;SHE&rdquo;)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The following safety statistics
have been recorded for the Quarter and the preceding four quarters.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="6" STYLE="border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Blanket Mine Safety Statistics</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Class</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Q4 2011</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Q1 2012</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Q2 2012</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Q3 2012</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Q4 2012</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Lost time injury</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>3</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Restricted work activity</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">8</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">5</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">7</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>7</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">First aid</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>5</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Medical aid</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Occupational illness</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>0</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1.5pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Total</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1.5pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>12</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1.5pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>12</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1.5pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>8</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1.5pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>12</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1.5pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>16</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Incidents</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">15</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">12</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">11</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">11</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>10</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Near misses</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>5</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Disability Injury Frequency Rate <SUP>(i)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0.31</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1.23</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0.30</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0.00</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>0.81</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Total Injury Incident Rate <SUP>(ii)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.43</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.72</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2.38</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.04</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>4.34</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Man-hours worked (thousands)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">641</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">645</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">670</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">688</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>738</B></FONT></TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><I>&nbsp;</I></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><I>i.</I></FONT><I><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 9pt">A measurement of total injuries, deaths and permanent disability occurring per 200,000 man-hours
worked.</FONT></I></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><I>&nbsp;</I></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><I>ii.</I></FONT><I><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 9pt">A measurement of all accidents that have occurred regardless of injury or not expressed per
200,000 man-hours worked. This includes accidents that could have caused injuries.</FONT></I></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in"><I>&nbsp;</I></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">During October 2012 Blanket
won both the Occupational Safety &amp; Health Silver Sectorial Award and the Occupational Safety &amp; Health Bronze Provincial
Awards from the National Social Security Authority (&ldquo;NSSA&rdquo;) of Zimbabwe in their Occupational Safety &amp; Health Competition
during the period January to December 2011. Both of these awards are based on Blanket&rsquo;s accident record which was measured
against the National Average Accident Frequency and National Average Injury Severity Rate of the Zimbabwe mining industry.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The increase in the number
of reportable accidents in the Quarter is of concern to management. Accordingly, NOSA, a global supplier of occupational risk management
services and solutions, carried out a safety audit and their recommendations are currently being reviewed.</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><B>6.2</B></TD><TD STYLE="text-align: justify"><B>Social Investment and Contribution to the Zimbabwean Economy</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 40.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Blanket&rsquo;s investment in community and
social projects which are not directly related to the operation of the mine or the welfare of Blanket&rsquo;s employees, the payments
made to GCSOT in terms of Blanket&rsquo;s indigenisation, and payments of royalties, taxation and other non-taxation charges taxes
to the Government of Zimbabwe and its agencies are set out in the table below.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: windowtext 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Payments to the community and the Zimbabwe Government (<I>in thousands of US dollars)</I> </B></FONT></TD></TR>
<TR>
    <TD STYLE="width: 19%; border-left: black 1pt solid; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Period</B></FONT></TD>
    <TD STYLE="width: 22%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Community and Social Investment</B></FONT></TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Payments to GSCOT</B></FONT></TD>
    <TD STYLE="width: 30%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Payments to Zimbabwe Government</B></FONT></TD>
    <TD STYLE="width: 15%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Total 2011</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>306</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>-</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>13,614</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 8.8pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>13,920</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Quarter 1 2012</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">147</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,353</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 8.8pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>3,500</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Quarter 2 2012 </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">38</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,042</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 8.8pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>6,080</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Quarter 3 2012 </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">108</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,366</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 8.8pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>8,474</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Quarter 4 2012</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">123</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,808</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 8.8pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>5,931</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Year 2012</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>$416</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>$3,000</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>$20,569</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 8.8pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>$23,985</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><B>6.3</B></TD><TD STYLE="text-align: justify"><B>Gold Production </B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The tonnes milled, average
mill feed grades, plant gold recovery and gold produced during January and February 2013, and the preceding eight quarters are
shown in the table below.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD COLSPAN="7" STYLE="vertical-align: top; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: windowtext 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Blanket Mine Production Statistics</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 21%; border-left: black 1pt solid; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Period</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Year</B></FONT></TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Tonnes Milled</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>(t)</B></P></TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Gold<BR>
        Head (Feed) Grade</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>(g/t)</B></P></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Gold Recovery</B></FONT></TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Gold Produced</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>(oz)</B></P></TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Average sales price per ounce of gold sold (US$/oz)</B></FONT></TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>TOTAL 2010</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>2010</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>153,500</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>3.90</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>92.0%</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>17,707</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1,273</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">First quarter</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2011</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">61,437</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4.02</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">92.2%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">7,322</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,397</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Second quarter</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2011</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">60,913</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4.52</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">92.9%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">8,226</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,512</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Third quarter</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2011</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">85,442</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.81</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">93.1%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">9,743</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,737</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Fourth quarter</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2011</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">90,967</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.86</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">93.4%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">10,533</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,681</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt solid; font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>TOTAL 2011</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>2011</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>298,759</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>4.01</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>92.9%</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>35,826</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1,577</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">First quarter </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2012</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">83,353</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.67</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">93.2%</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">%</P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">9,164</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,688</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Second quarter </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2012</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">90,315</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4.24</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">93.9%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">11,560</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">1,599</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Third quarter </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2012</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">93,049</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4.59</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">94.1%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">12,918</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,664</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Fourth quarter</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2012</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">96,598</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4.08</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">93.3%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">11,821</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,703</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Total 2012 </B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>2012</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>363,315</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>4.16</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>93.7%</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>45,464</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>65</B></P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1,666</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">January </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2013</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">29,538</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.75</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">93.2%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3,319</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,673</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">February</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2013</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">28,814</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.91</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">92.9%</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3,365</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1,593</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0.3in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Gold production in Q4 was
lower than the preceding quarter as the achieved mined ore grade returned towards the long term average mine reserve grade of 3.84g/t
after above average mined ore gold grades of 4.24 and 4.59 g/t in the 2nd and 3rd quarters. The production of 11,821oz achieved
in Q4 was 18% higher than the targeted production of 10,000oz/quarter. During January and February 2013 Blanket operated as planned
and achieved its production targets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>6.4&#9;Operating Costs</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">A narrow focus on the direct
costs of production (mainly labour, electricity and consumables) does not fully reflect the total cost of gold production. Accordingly,
the all-inclusive cost to produce an ounce of gold during the Quarter and the preceding seven quarters are set out in the table
below. For the purposes of consistency, the total direct costs shown on the table below is as reported in previous quarters.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11" STYLE="border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>Blanket Mine: Total Costs
        per Ounce of Gold Produced (US$/oz)</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 20%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q1</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2011</P></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q2</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2011</P></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q3</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2011</P></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q4</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2011</P></TD>
    <TD STYLE="vertical-align: top; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Year</B></P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: top; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q1</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2012</P></TD>
    <TD STYLE="vertical-align: top; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q2</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2012</P></TD>
    <TD STYLE="vertical-align: top; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">Q3</P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">2012</P></TD>
    <TD STYLE="vertical-align: top; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Q4</B></P>
        <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>2012</B></P></TD>
    <TD STYLE="vertical-align: top; width: 8%; border-bottom: windowtext 1pt solid; border-right: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>Year 2012</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Labour </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">208</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">175</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">157</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">132</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">164</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">179</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">174</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">158</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>176</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>175</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Consumables</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">247</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">212</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">234</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">210</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">227</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">249</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">197</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">189</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>203</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>212</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Electricity (incl. diesel)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">1415</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">154</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">155</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">138</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">148</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">161</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">136</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">119</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>118</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>134</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Other costs</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">48</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">44</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">37</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">41</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">42</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">58</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">40</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">41</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>57</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>50</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Total direct on-mine costs</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>648</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>585</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>583</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>521</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>581</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>648</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>547</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>508</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>554</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>571</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">General and administrative costs</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">53</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">126</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">140</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">122</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">114</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">153</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">115</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">103</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>111</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>118</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Sustaining capital investment</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">510</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">135</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">94</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">109</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">193</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">78</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">71</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">58</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>77</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>70</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Inclusive cost before royalty</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>1,211</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>846</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>825</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>752</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>895</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>878</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>732</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>669</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>741</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>759</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Royalty<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">63</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">74</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">78</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">67</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">71</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">134</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">112</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">117</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>105</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>116</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Total inclusive cost per ounce</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>1,274</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>920</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>903</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>819</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>966</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>1,012</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>844</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>786</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>846</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>875</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Gold ounces produced</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">7,322</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">8,226</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">9,743</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">10,533</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>35,826</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">9,164</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">11,560</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">12,918</FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>11,821</B></FONT></TD>
    <TD STYLE="border-right: windowtext 2.25pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-size: 10.5pt; font-weight: bold"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif"><B>45,465</B></FONT></TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 9pt"><I><SUP>(1)</SUP></I></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 9pt"><I>At 4% in 2011 and 7% in 2012</I></FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The labour cost component
increased by 11% from the preceding quarter due to the lower gold production in Q4 and adjustments incurred in the Quarter which
related to prior quarters in respect of productivity bonuses and increases in the basic labour rate.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The consumable cost component
increased by 7% from the preceding quarter due to the effects of lower gold production on the fixed component of consumable expenditure
and other expenses associated with equipment repairs and servicing.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Electricity tariffs remain
unchanged in the Quarter and although expensive, electricity supplied by the Zimbabwe Electricity Supply Authority (&ldquo;ZESA&rdquo;)
is still considerably cheaper than the cost of electricity generated by the mine&rsquo;s standby diesel generators. Blanket&rsquo;s
standby generators have successfully replaced any lost time that would have resulted from disruptions in the ZESA supply. The standby
diesel generators</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">were run for 12.6 hours during
the Quarter compared with 11.6 hours in the preceding quarter and a total of 108 hours usage during 2012 (2011, 120.5 hours)</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Other costs increased by
39% on the preceding quarter due to, inter alia, increased Claims Protection Fees on licences which fell due for renewal in the
Quarter and an increase in the provision for obsolete stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="background-color: yellow">&nbsp;</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">General and administrative
costs are largely fixed and include the cost of procurement, financial, technical and other services provided to Blanket by Caledonia,
the cost of the Harare office, the cost of shipping gold from Blanket to Rand Refineries in Johannesburg and the cost of gold refining
at Rand Refineries.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Sustaining capital investment
is that investment which is required to maintain Blanket&rsquo;s current level of production and includes the purchase of replacement
equipment, maintenance of existing equipment and infrastructure and normal mine development activities. It specifically excludes
expenses associated with the exploration and development of Blanket&rsquo;s satellite projects.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>6.5&#9;Underground</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify; text-indent: 0in">The AR South and AR Main
ore bodies continue to be the most productive mining areas and provided approximately 80% of the total ore mined during the Quarter.
To reduce the pressure of material movements on the 18 Level and 22 Level haulages, increased mining activity has taken place in
the upper levels of the AR Main and AR South ore bodies where there are remnants from earlier mining activities and undeveloped
zones of medium grade material which are economic to mine at prevailing gold prices.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify; text-indent: 0in">The mined ore gold grade
at 4.08 g/t continued to be higher than the planned 3.84 g/t average mine gold grade.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify; text-indent: 0in">The table below sets
out the development activities in the Quarter.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: justify; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Blanket Mine: Development Activities in Q4 2012 </B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: justify; text-indent: 0in; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 21%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Area</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Budget Advance (m)</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Actual Advance (m)</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Metres on reef</B></FONT></TD>
    <TD STYLE="width: 12%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Payable metres sampled</B></FONT></TD>
    <TD STYLE="width: 12%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Payable width (m)</B></FONT></TD>
    <TD STYLE="width: 12%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Payable grade (g/t)</B></FONT></TD>
    <TD STYLE="width: 12%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 6pt; padding-bottom: 6pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Payability (%)</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">AR Main </FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">480</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">331</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">286</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">186</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2.4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2.9</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">56.1</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">AR South</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">320</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">203</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">189</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">136</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">2.2</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.8</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">66.9</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Eroica</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">240</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">190</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">180</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">153</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1.8</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">4.3</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">80.4</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Blanket Quartz Reef</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">80</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">0</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Blanket/Feudal</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">80</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">148</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">133</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">76</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1.4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.4</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">51.3</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Lima</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">160</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">190</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">166</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">98</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">1.3</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">3.2</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">51.6</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Total </B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1360</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1062</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>953</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>648</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>1.9</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>3.5</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in; font-weight: bold"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>61.0</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The shortfall in mine development
against plan was mainly due to air compressor breakdowns. This matter has been addressed and a new 6,695cfm compressor has been
ordered and is expected to be installed and commissioned during Q3 2013. Management believes that the shortfall in development
during the Quarter can be recovered in future quarters and that the planned development will allow mined ore production to be sustained
at the average target rate of 1,000 tonnes per day (tpd) for 2013 increasing to 1,200tpd in 2014 and to 1,300tpd in 2015.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>6.6&#9;Capital Projects</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>750m AR &ndash; Lima Haulage
</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The 22 Level Haulage Extension
Project will link the Blanket and Lima ore bodies on 22 Level and will also allow for the further down-dip exploration of the Blanket
Mine&rsquo;s known ore bodies. Crosscuts (side tunnels) on 18 Level have
been completed and the crosscuts on the 22 Level Haulage are now being excavated to provide the required drilling platforms from
which the ore bodies below the 22 Level can be drilled for resource evaluation purposes. If this exploration is successful, this
haulage will also allow for the rapid commencement of mining in any new mining areas defined above 750m as a result of exploration
from the 630m haulage (see below). Work on the 22 Level Haulage Extension Project and its associated crosscuts will be carried
out simultaneously with normal mining production with its completion anticipated for mid-2014. It is planned that the underground
exploration drilling of the ore zones below 750m Level, which will be undertaken from the completed crosscuts, will continue into
2014 and beyond. During the Quarter the 22 Level haulage was advanced by 110m. This was less than planned due to a transformer
failure and a shortage of compressed air.</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>630m Haulage </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The 18 Level Haulage extension
will allow access to explore for the extension of the Sheet ore body between 630m and 510m. The haulage was advanced by 22m and
has reached its currently planned extension and exploration drilling has commenced.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>510 Eroica-Lima Haulage</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The 14 Level Haulage was
advanced by 121m in the Quarter and has reached the Lima ore body. Development work will commence on the Lima ore body between
510 and 230m levels. This production section is expected to add an additional daily 200 tonnes of ore production from early 2014
at the average mine grade of 3.84 g/t.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>No. 6 Winze Project </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">This project, which was recently
approved by the new Blanket Board, will provide access to the Blanket ore body below 22 Level by deepening the existing No. 6 Winze.
An existing Double Drum Winder is currently being upgraded and refurbished and will be installed in a new winder chamber to be
excavated on 18 Level. The winze, from 120m above 22 Level, will be widened to accommodate the tipping station for the two x 3
tonne ore skips, and the shaft will then be sunk down to 1,080m with stations and main haulage levels being developed on 870m (26
Level) and 1,000m (30 Level) and with the skip loading station at 1060m. Ore and development waste will then be hoisted up the
deepened No. 6 winze to 22 Level where it will be tipped into the No 4 shaft system for crushing and hoisting to surface via the
No 4 Shaft. The capital cost of this project is estimated to be US$4.4 million, which will be funded from Blanket&rsquo;s internal
cash flows.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Work on this project has
commenced and it is expected that this project will be completed in late 2015. Once complete, management expects that production
from the Blanket ore body below 22 Level will progressively increase to approximately 600 tonnes of ore per day. This production
will be in addition to the continued target production from other areas of Blanket mine of 1,300 tonnes of ore per day from early
2015.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>6.7&#9;Mineral Reserves
and Resources</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">An independent mineral reserve
and resource report for the Blanket Mine calculated as at 31<SUP>st</SUP> December 2010 was prepared by The MSA Group, as the independent
qualified person, in compliance with Canadian National Instrument 43-101, and was published during the 2<SUP>nd</SUP> quarter of
2011. Further NI 43-101 reports are expected to be issued from time to time in order to disclose the results of ongoing operations
and exploration work.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Mr. Mike Robertson, Pr. Sci.
Nat., and&nbsp;Mr. Bruno Bvirakare, Pr. Sci. Nat., both consultants with The MSA Group are the &ldquo;Independent Qualified Persons&rdquo;
for Blanket&rsquo;s reserves and resources as required by National Instrument 43-101 of the Canadian Securities Administrators.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Since the calculation of
the above December 31, 2010, figures, the Corporation has mined 662,074 tonnes with an average recovered gold grade of 4.06g/t
from within the reserves and resource figures set out above to produce 81,291 ounces of gold at a recovery of 93.3%. Management
of Blanket Mine has concluded that on-going work and exploration
on the property has resulted in the establishment of replacement reserves and resources. An updated internal calculation of Blanket&rsquo;s
reserves and resources as at December 31<SUP>st</SUP> 2012 has been prepared by Blanket&rsquo;s Technical Department following
the standards and procedures required by NI 43-101. The Mineral Reserves and Resources calculations have been reviewed by Dr Pearton,
Caledonia&rsquo;s Qualified Person and the results are presented in the following table.</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD COLSPAN="4" STYLE="border: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><B>MINERAL RESERVES as at December 31, 2012 </B>(based on a Gold Price of US$1,500/oz)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 39%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 0in"><B>Classification</B></TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 1.7pt"><B>Tonnes</B></TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><B>Grade(Au g/t)</B></TD>
    <TD STYLE="width: 25%; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><B>Gold Content (oz)</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 1.7pt"><B>Proven Ore</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: 8.8pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 1.7pt">Total Proven Ore including pillars*</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 8.8pt">1,767,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in">3.93</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in"><B>223,000</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 1.7pt"><B>Probable Ore</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 8.8pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 1.7pt">Operating and Development Areas</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 8.8pt">2,140,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in">3.66</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in"><B>252,000</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 1.7pt"><B>Total Proven + Probable Ore</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 8.8pt"><B>3,907,000</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in"><B>3.78</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in"><B>475,000</B></TD></TR>
<TR>
    <TD COLSPAN="4" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><B>MINERAL RESOURCES (</B>based on a Gold Price of US$1,500/oz)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0.3in"><B>Classification</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><B>Tonnes</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><B>Grade(Au g/t)</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; text-indent: 0in"><B>Gold Content ounces</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><B>Indicated</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 15.85pt">448,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 8.8pt">3.81</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 37.15pt; padding-left: 5.4pt; text-align: right; text-indent: 0.3in"><B>54,900</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; text-indent: 0in"><B>Inferred</B></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 15.85pt">2,290,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 15.85pt; padding-left: 5.4pt; text-align: right; text-indent: 8.8pt">5.30</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 37.15pt; padding-left: 5.4pt; text-align: right; text-indent: 0.3in"><B>**</B></TD></TR>
<TR>
    <TD COLSPAN="4" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 37.15pt; text-align: justify; text-indent: -35.45pt"><B>Note *
        </B>Pillar tonnages are discounted by 50%</P>
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 37.15pt; text-align: left; text-indent: -35.45pt"><B>Note **</B> In
        keeping with the requirements of NI 43-101, Inferred Resources are reported without estimates of metal quantities.</P></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Relative to the previous
and independent estimate of reserves and resources as at December 2010, the Reserves have increased by 1.7% in terms of contained
gold. Resources expressed in terms of tonnage have declined by 6.1% over the same period.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>6.8&#9;Indigenisation</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">As noted in the MD&amp;A
for the preceding quarter, the various transactions which make up Blanket&rsquo;s indigenisation programme were completed with
effect from September 5, 2012 and Caledonia has received the Certificate of Compliance from the Government of Zimbabwe which confirms
that Blanket is fully compliant with the requirements of Section 3(1)(a) of the Indigenisation and Economic Empowerment Act (Chapter
14.33). Further information on the terms of the indigenisation transactions is set out in the MD&amp;A for the 3<SUP>rd</SUP> quarter
of 2012. The accounting treatment for the indigenisation of Blanket is set out in Note 5 to the Consolidated Financial Statements.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Blanket and Caledonia are
working with Blanket&rsquo;s new shareholders to further progress operations at Blanket for the benefit of all stakeholders. In
January 2013 Caledonia announced that the Blanket and Caledonia boards had approved a medium term strategy in terms of which US$37m
will be invested at Blanket between 2013 and 2017 and which is expected to result in production of about 76koz per annum from 2016.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 42.55pt"><B>6.9</B></TD><TD STYLE="text-align: justify"><B>Opportunities </B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0 3pt 14.2pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 3pt; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Indigenisation: following the implementation of the indigenisation agreement set out in 6.8, Blanket,
as a fully indigenised entity and with new strategic indigenous shareholders, may be able to take advantage of growth opportunities
that could arise in Zimbabwe.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 3pt; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Increased production: Blanket&rsquo;s existing reserves and resources could support a further increase
in production provided the necessary investments in the resource development can be made.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 3pt; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Surplus capacity: The mine currently has a daily average mining capacity of over 1,000tpd; the
hoisting capacity is approximately 3,000tpd; the crushing and milling plant has the capacity to process approximately 1,450tpd (increasing to approximately 3,000tpd after scheduled investment) and the
CIL plant has capacity of 3,800 tonnes per day. Any 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.</TD></TR></TABLE>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 3pt; margin-bottom: 3pt"></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 3pt; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Exploration success: Blanket&rsquo;s main exploration objectives are the 22 Level Haulage Project
and the related exploration of the down-dip extensions of the known ore bodies and the satellite exploration projects at GG and
the Mascot Project Area. Depending on future exploration success, Blanket may be able to further increase its targeted production
levels from those quoted in 6.2 and 6.8 above.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>6.10&#9;Outlook</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Blanket exceeded its targeted
annual production of 40,000oz in 2012 by 14%. The 2013 target of 40,000 is expected to be sustained as a result of improvements
in the underground mining systems and ongoing mine development. Gold production for the first two months of 2013 was at the targeted
level.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The surplus capacity of the
Blanket leach section and crushing and milling plant enables it to immediately treat additional feed material from the Blanket
underground and from the GG and Mascot Project Area mines if the planned exploration and development work is successful and if
any resultant ore is compatible with Blanket&rsquo;s existing metallurgical process. With the planned increase in crushing and
milling rates to approximately 3,000tpd, the Blanket metallurgical plant could treat its planned increase in production from the
Blanket areas above and below the 22 level and from its satellite projects if they become ore producers.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">There is upward pressure
on costs, taxes and regulatory fees in Zimbabwe. Nevertheless, Blanket has surplus metallurgical plant capacity and is sufficiently
cash generative so that it can invest in projects with a view to further increasing production, thereby helping to maintain downward
pressure on the cost per ounce of gold produced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 106.35pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>7 EXPLORATION AND PROJECT DEVELOPMENT</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><B>7.1</B></TD><TD STYLE="text-align: justify"><B>Nama Copper Project, Zambia</B></TD></TR></TABLE>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Caledonia holds four, contiguous large scale
mining licenses covering approximately 800 square kilometres on the Zambian Copperbelt. The northern boundary of Caledonia&rsquo;s
licenced area is the Democratic Republic of Congo border and the eastern boundary abuts the Lubambe mining licence area that is
held by a joint venture between Vale and African Rainbow Minerals where a new copper mine has recently been commissioned.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 2011 drilling programme, which comprised
5,352m over five holes, identified an apparently contiguous zone of mineralisation.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Phase 1 of the 2012 work programme commenced
in March 2012 and consisted of six holes comprising approximately 2,400m of drilling with the objective of identifying a continuation
towards surface of the mineralized zone identified in 2011. This phase of the work programme was extended into Phase 2 with the
objectives of identifying extensions of this mineralised zone and increasing the confidence level of the information on this mineralised
zone. The 2012 total drilling programme comprised 10,903m over 20 holes.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><B>Preliminary Results of the 2012 Drilling Programme</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Caledonia believes, based on results achieved
to date, that the 2012 drilling programme has confirmed the existence of a mineralised copper zone of substantially greater extent
than first identified in 2011. The in-fill drilling has established that the mineralised zone is locally disturbed by breccia zones
and fold structures which have resulted in some geological losses and local duplication of mineralization. In-fill drilling on
the north-eastern and north-western limits of the target area also identified that the grade and thickness of the mineralised zone
has decreased in those areas. The full extent of these disruptions, which will only be finally established and quantified
once the detailed drilling currently underway is complete, are not anticipated to have a major impact on the quantum of the resource.<U>
</U></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>2013 Drilling Programme</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Caledonia&rsquo;s Board has authorised a program
of percussion drilling to be undertaken on the identified zone in the 2nd quarter of 2013 to improve resource definition close
to surface and to establish whether there is potential for an open-pit operation. Caledonia expects to issue a NI 43-101 compliant
copper resource statement by June 30, 2013 and a pre-feasibility study by the end of 2013 on the possible mining of any economic
near-surface oxide material.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Caledonia&rsquo;s Board has also approved approximately
2,400m of diamond drilling to be carried out on additional zones of mineralisation that have been identified to the immediate west
and south of the mineralised zone that could extend the copper resource both at surface and possibly at depth. A further 5,000m
of diamond drilling will be commenced when the work described above has been completed on a broad copper geochemical anomaly which
has been identified further to the west of the identified zone.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The budgeted cost of the 2013 exploration programme,
the preparation of the NI 43-101 resource report and the feasibility study is approximately US$2.2 million, which will be funded
from Caledonia&rsquo;s cash on hand.</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><B>Status of the Nama Licences</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 24, 2012 Caledonia announced that,
following discussions with the Zambian Mines Development Department (the &ldquo;Department&rdquo;), Caledonia must comply with
certain conditions to continue to hold the Nama Licences. These conditions include, inter alia:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt">&bull;</TD><TD STYLE="text-align: justify">the commencement of cobalt production by June 30, 2013;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt">&bull;</TD><TD STYLE="text-align: justify">the submission of an updated copper sulphide mineral resource and reserve statement and associated
feasibility study and program of operations by June 30, 2013; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt">&bull;</TD><TD STYLE="text-align: justify">the commencement of copper sulphide resource exploitation by March 31, 2015.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Further discussions have been held with the
Department to clarify the precise terms of certain of these conditions. Caledonia intends to comply with these conditions and believes
that its proposed course of action will do so.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>7.2&#9;Nama Cobalt Project, Zambia </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Caledonia has undertaken to commence cobalt
production by June 30 2013. Accordingly, Caledonia has submitted a proposal to the Zambian Mines Development Department for a cobalt
mining operation on the following basis:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Identified resource to be mined: approximately
2 million tonnes grading approximately 0.2% cobalt and 0.1% copper;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Phase 1: mining at a target rate of approximately
30,000 tonnes per month to produce cobalt oxide concentrate using gravity separation;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Phase 2: mining at a target rate of approximately
60,000 tonnes per month to produce cobalt hydroxide using hydrometallurgical processing; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The estimated capital investment to achieve
mine start-up and to complete phase 1 is approximately US$1.1million. </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><B>7.3</B></TD><TD STYLE="text-align: justify"><B>Gold: Blanket Gold Mine, Zimbabwe </B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Corporation&rsquo;s primary exploration
activities in Zimbabwe are at the Blanket Mine, which are discussed in sections 6.5 and 6.6. Other than at Blanket Mine itself,
Blanket&rsquo;s current exploration title holdings in the form of registered mining claims in the Gwanda Greenstone Belt total
78 claims, including a small number under option, covering an area of about 2,500 hectares. Blanket&rsquo;s main exploration efforts
on its satellite properties are focused at this stage on the GG prospect, the Mascot Project and Eagle Vulture which are believed
to have the greatest potential of success and which are both within an economic trucking distance of the Blanket plant.</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depending on the successful outcome of exploration
work and mining development, it is intended that economic ore extracted from GG and the Mascot Project Area would be trucked to
the Blanket plant for processing.<FONT STYLE="color: black"> </FONT>The Blanket Mine metallurgical plant has existing surplus treatment
capacity and when the planned crushing and milling plant extensions have been completed, could handle up to an additional 900 tonnes
per day of ore from Blanket underground and successful exploration project areas.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>GG Project </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The GG project was previously
the site of small-scale surface workings and is located approximately 7km south east of Blanket Mine.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Drilling programs were carried
out at GG over the past eight years included seventeen diamond-cored holes that were drilled amounting to 4,751 metres of drilling.
Two zones of potentially economic gold mineralisation have been established down to a depth of approximately 200 metres, each with
an estimated strike length of approximately 150 metres.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Work commenced on sinking
a 3m by 2m shaft in the 3<SUP>rd</SUP> quarter of 2012 and as at March 18, 2013 the shaft had reached a depth of 90m and work on
excavating the 90m level station had commenced. Once this has been completed the shaft will continue to be sunk to its target depth
of 120m below surface and a station cut at this level. During shaft sinking operations, the shaft encountered a mineralized quartz
shear with a near vertical orientation. As the shaft sinking extended below 40m, this quartz shear swelled and occupied the full
width of the shaft. This zone of mineralisation has persisted down to 60m and on assay returned an average grade of 6.0g/t gold.
The sulphide intensity of this mineralised shear exposed by the shaft between the 60m and 90m levels appear to have weakened but
the shear structure remains intact. Underground diamond drilling will be undertaken to evaluate the mineralisation of this structure.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Horizontal development has
commenced on the 60m level, short side excavations from the main haulage drive (&ldquo;cubbies&rdquo;) have been made to allow
for diamond drilling of the identified mineralised zones. To date, four holes, totalling 400 metres have been drilled to investigate
the North Main Shear and three of these holes have intersected mineralization with averaged grades and thicknesses of about 4g/t
over about 2 metres. Further diamond drilling is in progress to allow for a better understanding of the geometry of the identified
zones. A total of 3,000m of diamond drilling is planned from these three development levels during 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Investment in the GG project
to date has been US$626,000 which has been funded from Blanket&rsquo;s internal cash flows.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>Mascot Project Area</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The Mascot Project Area comprises
three existing shafts (Mascot, Penzance and Eagle Vulture) which extend down to various depths of up to 450 metres. These shafts
and other infrastructure need extensive rehabilitation. Production at these shafts ceased decades ago due to a combination of political
difficulties and the limitations of the technology that was then available. Blanket Mine Management believes that the application
of modern exploration and processing techniques may allow some or all of these shafts to operate profitably for a period of time,
and not just at the prevailing high gold price. Priority has been given to the rehabilitation and installation of infrastructure
at Mascot and Eagle Vulture shafts. Work at Penzance has been deferred pending completion of work and underground development at
Eagle Vulture and Mascot.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>Mascot</I></B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Mascot was previously mined
down to approximately 300 metres, exploiting an ore body which narrowed continuously with depth. The decrease in the extent of
the mined out ore at depth is thought to have been the result of limitations on mining localised low ore grades and thereby not
exposing the full extent of the mineralized zone. Previous drilling undertaken by Blanket has indicated the existence of two further
mineralised zones, one on either side of the mined out area.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">During the 2<SUP>nd</SUP>
quarter of 2012, following the installation of the ZESA electricity connection, surface infrastructure was installed (headgear,
winder house and winder, electricity substation and reticulation, and a 1,000cfm air compressor) and the shaft was re-accessed
down to the 120 metre level below surface and found to be in reasonably good condition.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">During the 3<SUP>rd</SUP>
quarter of 2012 work focussed on re-equipping the shaft: rope guides were installed down to 120metres, the ladder-ways and all
station platforms were installed and the installation of air, water and pump lines is 90% complete at 21<SUP>st</SUP> February
2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Underground lateral development
commenced in November 2012 simultaneously on 1 and 2 levels towards the two new mineralised zones which had been identified by
Blanket&rsquo;s previous surface drilling. A total of 70 metres has been advanced from the shaft in both easterly and westerly
directions. It is hoped that if the gold grades of the exposed mineralized zones prove to be economic that ore from Mascot could
be trucked to the main Blanket plant in commencing in late 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Investment to date at Mascot
has been U$$338,000, which has been funded from Blanket&rsquo;s internal cash flows.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>Eagle Vulture</I></B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The Eagle Vulture mine was
previously mined down to approximately 100 metres below surface and is the most developed property at the Mascot Project Area.
It is a &ldquo;pinch and swell&rdquo; ore-zone structure characterized by a cherty quartz vein. The main shaft has been refurbished
down to the shaft bottom (70 metres depth) and development work to date 120 metres of development in both easterly and westerly
directions towards the ore-zone strike extremities has been completed. The development plan at Eagle Vulture is to advance through
waste material towards a mineralised zone that has been identified by surface drilling.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Investment to date at Eagle
Vulture has been US$139,000, which has been funded from Blanket&rsquo;s internal cash flows.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>8.</B></TD><TD STYLE="text-align: justify"><B>INVESTING </B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the Quarter Caledonia invested $2,996,000
($1,017,000 &ndash; 2011) in property, plant and equipment including mineral properties. Of the amount invested $1,775,000 ($859,000
&ndash; 2011) was spent at Nama and $1,207,000 ($108,000 &ndash; 2011) at Blanket and its satellite properties.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the 2012 Caledonia invested $7,909,000
($8,528,000 &ndash; 2011) in property, plant and equipment including mineral properties. Of the amount invested $3,614,000 ($2,709,000
&ndash; 2011) was spent at Nama and $4,280,000 ($5,769,000 &ndash; 2011) at Blanket, and its satellite properties.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>9.</B></TD><TD STYLE="text-align: justify"><B>FINANCING </B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Caledonia financed all its
operations using funds on hand and those generated by its operations. During 2012, share options for 13,912,500 options were exercised
raising $974,000. No other equity fundraising took place in 2012 and none is currently planned. Blanket&rsquo;s unsecured US$2.5
million loan facility in Zimbabwe has been renewed until November 2013 at <FONT STYLE="color: black">an interest rate of 8% above
the 30-day LIBOR rate. It is unsecured, is renewable and repayable on demand.</FONT> At December 31, 2012 this facility was undrawn
due to the receipt of a payment from Rand Refineries in respect of gold sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>10.</B></TD><TD STYLE="text-align: justify"><B>LIQUIDITY AND CAPITAL RESOURCES </B></TD></TR></TABLE>

<P STYLE="font: 11pt/11.55pt Times New Roman, Times, Serif; margin: 0; text-align: justify">An analysis of the sources and
uses of Caledonia&rsquo;s cash is set out the Consolidated Statement of Cash Flows set out in Section 4. As of December 31,
2012, Caledonia had a working capital surplus of $26,014,000 ($13,593,000 as at December 31, 2011). As of December 31, 2012,
Caledonia had potential liabilities for rehabilitation work
on the Blanket and Eersteling Mines - if and when those Mines are permanently closed - at an estimated present value cost of $1,015,000
(2011: $1,785,000). The South African rehabilitation trust held $175,000 on cash deposit as at December 31, 2012.</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt/11.55pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">It is intended that all of the capital investment
which will be required to fund the planned growth and development at Blanket over the next four years will be funded by Blanket&rsquo;s
internal cash flows. Caledonia has sufficient cash on hand to fund all of the authorised 2013 investment required at the Nama project.</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>11.</B></TD><TD STYLE="text-align: justify"><B>OFF-BALANCE SHEET ARRANGEMENTS</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There are no off balance sheet arrangements.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>12.</B></TD><TD STYLE="text-align: justify"><B>RELATED PARTY TRANSACTIONS</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/12pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt">Caledonia
had the following related party transactions:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 72%; border-right: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: justify; text-indent: 1.1pt">&nbsp;</TD>
    <TD STYLE="width: 14%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2012</B></FONT></TD>
    <TD STYLE="width: 14%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>$&rsquo;000</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">$&rsquo;000</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: justify; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Management fees, bonuses and expense allowances paid or accrued to a company which provides the services of the Corporation&rsquo;s President</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-bottom: 4.5pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>704</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">588</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: justify; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rent paid to a company owned by members of the President&rsquo;s family</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-bottom: 4.5pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>43</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">48</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: justify; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Legal fees paid to a law firm where a Director is a partner</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-bottom: 4.5pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>111</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">97</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: justify; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other fees paid to Directors</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-bottom: 4.5pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>215</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 6pt; padding-left: 6pt; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">145</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Legal fees were paid on an
arms&rsquo; length commercial basis to Tupper, Jonsson &amp; Yeadon in respect of legal services. Other fees paid to directors
were in respect of their contractual remuneration.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>13.</B></TD><TD STYLE="text-align: justify"><B>CRITICAL ACCOUNTING POLICIES</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The major areas where accounting
estimates are made are asset impairment, asset retirement obligations, share based payments, functional currency determination
and future tax liabilities. Discussion of the bases on which these judgements have been made is set in note 3 to the Consolidated
Financial Statement. As significant impairment provisions have already been made against certain assets and there is a reasonable
level of certainty around the estimate it is considered unlikely that any change in estimate would result in a material impact
on the results of Caledonia. The asset retirement obligations are also considered to be estimated with a reasonable degree of certainty.
An independent review of the asset retirement obligation estimation for Blanket was last carried out in December 2012. The current
cost estimation of $1,600,000 was inflated by 5-6% per annum for the expected life of mine and then discounted back to current
value at 15% which is the current borrowing costs attributable to Blanket. The estimations are accreted annually and any change
in circumstances is considered unlikely to have a material impact on the results of Caledonia or its operations</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>14.</B></TD><TD STYLE="text-align: justify"><B>SECURITIES OUTSTANDING</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">As at March 28, 2013 the following securities were outstanding:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/11.55pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt">(1)</TD><TD STYLE="text-align: justify">517,061,780 common shares issued;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/11.55pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt">(2)</TD><TD STYLE="text-align: justify">Options outstanding are as follows:</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 24%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 24.4pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Number of Options</B></FONT></TD>
    <TD STYLE="width: 34%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Exercise Price ($)</B></FONT></TD>
    <TD STYLE="width: 42%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Expiry Date <SUP>(1)</SUP></B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,070,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.07</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Feb 11,2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">437,500</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.07</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">July 1, 2013</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 24%; border: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">210,000</FONT></TD>
    <TD STYLE="width: 34%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.07</FONT></TD>
    <TD STYLE="width: 42%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">April 29, 2014</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">500,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.07</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mar 23, 2014</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,460,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.13</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Jan 31, 2016</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">300,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.07</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">May 11, 2016</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 0.2in; padding-left: 3.1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,319,000</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1.5pt solid; padding-right: 49.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.09</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Aug 31, 2017</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 0.2in; padding-left: 3.1pt; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>33,296,500</B></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 49.85pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 10.25pt; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 31.65pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-size: 9pt"><I><SUP>(1)</SUP></I></FONT></TD><TD STYLE="padding-right: 22.3pt"><FONT STYLE="font-size: 9pt"><I>Options expiring during a &ldquo;closed period&rdquo; will have
the expiry date extended, in terms of the option plan, by 10 days following the cancellation of the closed period.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">As Caledonia&rsquo;s Option Plan allows
the granting of options on a number of shares equal to 10% of the issued shares, Caledonia could grant options on a further 18,149,678
shares.</P>

<P STYLE="font: 11pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">A News Release issued
on March 14, 2013 set out the timetable for the implementation of the 1-for-10 share consolidation which was approved by Caledonia
shareholders on January 24<SUP>th</SUP> 2013. Caledonia&rsquo;s shares is issue and outstanding share options will be reduced on
a 1-for-10 basis with effect from April 12, 2013.</P>

<P STYLE="font: 11pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>15.</B></TD><TD STYLE="text-align: justify"><B>RISKS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 21.3pt; text-align: justify; text-indent: -21.3pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Risks such as interest rate
foreign exchange and credit risks are considered in Notes 6 and 24 to the Consolidated Financial Statements. Caledonia&rsquo;s
business contains significant additional risks due to the jurisdictions in which it operates and the nature of mining, exploration
and development. Included in the risk factors below are details of how management seeks to mitigate the risks where this is possible.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Liquidity risk:</B> The Company needs
to generate capital to be able to continue to invest in properties and projects without raising third party financing. Caledonia
currently has significant cash resources and continues to generate sufficient cash to cover all of its anticipated investment needs.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Exploration Risk</B>: The Company needs
to identify new resources to replace ore which has been depleted by mining activities and to commence new project. Blanket has
embarked on development and exploration programmes as set out in sections 6.5, 6.6, and 7.2. Caledonia is also engaged in exploration
at Nama as set out in section 7.1. No assurance can be given that exploration will be successful in identifying sufficient mineral
resources of an adequate grade and suitable metallurgical characteristics that are suitable for further development or production.
</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif; color: black"><B>Development Risk</B>: The
Company is engaged in development activities at Blanket Mine and the Satellite properties </FONT>and may also commence development
at the Nama project in respect of potential cobalt and copper operations. Construction and development of projects where minerals
are identified is subject to numerous risks: obtaining equipment, permits and services, changes in regulations, currency rate changes,
financing risk, labour shortages, changes in metal prices and the loss of community support. There can be no assurance that construction
will commence or continue in accordance with the current expectations or at all.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Production Estimates</B>: Estimates for
future production are based on mining plans and are subject to change. Production estimates are subject to risk and no assurance
can be given that future production estimates will be achieved. Actual production may vary from estimated production for a variety
of reasons including un-anticipated changes grades and tonnages and geological conditions, accident and equipment breakdown, changes
in metal prices and the cost and supply of inputs and changes to government regulations. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Mineral Rights:</B> The Company&rsquo;s
existing licences and permits are in good standing. The Company has to pay fees etc. to maintain its rights and licence. No assurance
can be given that the Company will be able to make payments by the required date or will meet development and production schedules
that are required to protect licences. </FONT></TD></TR></TABLE>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Mineral Prices: </B>The Company&rsquo;s
operations and exploration and development projects are heavily influenced by the prices of gold, copper and cobalt. The price
of gold in particular is subject to fluctuation and cannot be predicted. Company has not adopted any strategies to control the
effect of mineral price fluctuations. The continued work at Nama will be influenced by prevailing and forecast prices of copper
and cobalt. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt; color: black"><B>Increasing input costs</B></FONT>: Mining companies generally have experienced
higher costs of steel, reagents, labour and electricity and from local and national government for levies, fees, royalties and
other direct and indirect taxes. For example the Zimbabwean gold mining royalty tax rate was increased from 4% to 7% of gold sales
in January 2012. As a low-cost operator, Blanket is well-positioned to withstand any further increases in input costs. In addition,
Blanket&rsquo;s planned growth should allow the fixed cost component to be absorbed over increased production, thereby helping
to alleviate somewhat the effect of any further price increases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt"><B>Illegal mining</B>: During the 4<SUP>th</SUP> Quarter there has been an increase in illegal
mining activities on properties controlled by Blanket. This gives rise to increased security costs and an increased risk of theft
and damage to equipment. Blanket has received adequate support and assistance from the Zimbabwean police in investigating such
cases. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 6pt 14.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11pt"><B>Succession planning</B>: The limited availability of mining and other technical skills
and experience in Zimbabwe and the difficulty of attracting appropriately skilled employees to Zimbabwe creates a risk that appropriate
skills may not be available if, for whatever reason, the current skills base at the Blanket Mine is depleted. The Caledonia management
team is small and will need to be augmented to provide for appropriate succession planning. </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Country risk</B>: The commercial environments
in which the Company operates is unpredictable.&nbsp; Potential risks may arise from unforeseen changes in government policies
and regulations relating to exploration and mining activity, military repression and civil disorder, all or any of which may have
a material adverse effect on operations and/or the ability of Caledonia to receive payments.&nbsp; Management believes that it
has minimised such risks by complying fully with all relevant legislation and by obtaining all relevant regulatory permissions
and approvals.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 21.3pt; text-align: justify; text-indent: -21.3pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 21.3pt; text-align: justify; text-indent: -21.3pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>16.</B></TD><TD STYLE="text-align: justify"><B>CONTROLS</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">Disclosure controls and
procedures are designed to provide reasonable assurance that all relevant information is gathered and reported to senior Management,
including the Corporation's President and Chief Financial Officer, on a timely basis so that appropriate decisions can be made
regarding public disclosure. Management of the Corporation, with the participation of the Chief Executive Officer and the Chief
Financial Officer, have evaluated the effectiveness of the Corporation's disclosure controls and procedures as at December 31,
2012, as required by Canadian securities laws pursuant to the certification requirements of Multilateral Instrument 52-109.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">The Corporation's internal
controls over financial reporting (&ldquo;ICFR&rdquo;) are intended to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">Because of its inherent
limitations, the Corporation's ICFR may not prevent or detect any or all misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">The Corporation previously
engaged independent consultants in 2010 to carry out an assessment of the effectiveness of its internal controls over financial
reporting using an internationally acceptable framework. Prior to this engagement, Management concluded that the following disclosable
material weaknesses existed and still exist as at December 31, 2012.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B></B></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>Segregation of Duties</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">Due to limited personnel
resources at the Corporation&rsquo;s Africa office in Johannesburg, adequate segregation of duties within the accounting group
was not achieved. This created a risk that inaccurate entries could be made and not identified or corrected on a timely basis.
The result is that the Corporation was highly reliant on the performance of mitigating procedures during its financial close processes
in order to ensure the financial statements are presented fairly in all material respects. The Corporation continues to enhance
and monitor this process to ensure that its financial accounting reporting system is able to prevent and detect potentially significant
errors.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">Additional accounting
staff have been recruited to the Corporation&rsquo;s Africa office in Johannesburg and an internal audit function has been added
at the Blanket Mine in Zimbabwe. This has improved but not entirely eliminated the deficiency in the segregation of duties and
lightened the work load of existing staff and improved control of the accounting function.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">Management has concluded,
and the Audit Committee has agreed that the hiring of additional staff to correct segregation of duties weakness and excessive
workloads need to be addressed at this time. There have been no changes in the Corporation&rsquo;s internal controls over financial
reporting since the year ended December 31, 2012, that have materially affected, or are reasonably likely to materially affect,
its internal controls over financial reporting.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify; text-indent: 0in">The Corporation has a
Disclosure Committee consisting of three Directors, and has disclosure controls and procedures which it follows in an attempt to
ensure that it complies with all required disclosures on an adequate and timely basis. The Corporation&rsquo;s Directors and Management,
and the Disclosure Committee, are making all reasonable efforts to ensure that the Corporation&rsquo;s disclosures are made in
full compliance with all of the applicable rules, regulations and requirements. All reasonable efforts are also being made to ensure
that the Corporation&rsquo;s disclosure controls and procedures provide reasonable assurance that material information relating
to the Corporation, including its consolidated subsidiaries, is made known to the Corporation&rsquo;s Certifying Officers by others
within those entities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><B>17.</B></TD><TD STYLE="text-align: justify"><B>QUALIFIED PERSON</B></TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Dr. Trevor Pearton, <FONT STYLE="color: #333333">B.Sc.
Eng. (Mining Geology), Ph.D. (Geology), F.G.S.S.A.,</FONT> VP Exploration is the Corporation&rsquo;s qualified person as defined
by NI 43-101. Dr. Pearton is responsible for the technical information provided on this MD&amp;A except where otherwise stated.</P>



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<TYPE>EX-99.1
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<FILENAME>newsrelease.htm
<DESCRIPTION>NEWS RELEASE DATED MARCH 28,2013
<TEXT>
<HTML>
<HEAD>
     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"><img border="0" src="logo.jpg" width="680" height="119"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>Caledonia Mining Corporation </B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>(TSX: CAL, OTCQX: CALVF, AIM: CMCL)</B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>Fourth Quarter and 2012 Annual
Results; </B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>2012 Gold Production Up 27% to
45,564oz with Cash Costs at US571/oz</B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify"><B>March 28, 2013</B>: Caledonia
Mining Corporation (the &ldquo;Company&rdquo;) is pleased to announce its fourth quarter 2012 (&ldquo;Q4&rdquo; or the &ldquo;Quarter&rdquo;),
and the operating and financial results for the 12 months to December 31, 2012 (the &ldquo;Year&rdquo;). All results are reported
in Canadian dollars unless otherwise indicated. <FONT STYLE="color: black">Following the implementation of Indigenisation, Caledonia
owns 49% of the Blanket Mine in Zimbabwe. Operational and financial information set out below is on a 100% basis unless indicated
otherwise.</FONT></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>Operational Highlights</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">New record high annual
gold production at the Blanket Mine in Zimbabwe of 45,465oz, a 27% increase over the year ended December 31, 2011 (35,826oz). </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Q4 gold production
of 11,821oz, a 12% increase on Q4 2011 (the &ldquo;comparable quarter&rdquo;) of 10,533oz. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Decrease of 1.7% in
direct full year operating cash costs at Blanket to US$571 per ounce compared to US$581 in 2011. Blanket&rsquo;s all-inclusive
costs for 2012 fell by 15.2% to US$759/oz compared to US$895/oz in 2011. The reduction in costs was driven by higher production
and corresponding lower average fixed costs per ounce.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>Financial Highlights</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Gold sales for the
Year were 45,181oz at an average price of US$1,666/oz, compared to 35,504oz at an average price of US$1,577/oz in 2011. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Gold sales during
Q4 were 10,337oz at an average price of US$1,703/oz, compared to 12,918oz at an average price of US$1,664/oz in the preceding quarter
and 9,329oz at an average price of US$1,712/oz. in the comparable quarter.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Gross profit for the
Year increased 41% to $40,915,000 (2011: $29,115,000).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Gross profit (i.e.
after depreciation and amortization but before administrative expenses) for Q4 was $9,250,000 compared to $12,602,000 in the preceding
quarter and $9,012,000 in the comparable quarter. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Net profit after tax
for Q4 was $3,590,000 compared to a loss of $7,240,000 in the preceding quarter and a profit of $1,369,000 in the comparable quarter.
</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Net profit for 2012
attributable to Caledonia&rsquo;s shareholders of $8,720,000<FONT STYLE="color: black"><B> (</B>1.72 cents per share) </FONT>was
after a non-cash, non-recurring accounting charge of $14,161,000 arising from the successful implementation of Indigenisation at
the Blanket Mine. Indigenisation was implemented by the sale of 41% of Blanket to Indigenous Zimbabweans and the donation of 10%
of Blanket to the local Gwanda Community Share Ownership Trust. Further explanation of the basis of this charge is set out in Note
5 to the Annual Consolidated Financial Statements.</FONT></TD></TR></TABLE>


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<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Adjusted basic earnings
per share for 2012 attributable to Caledonia&rsquo;s shareholders (after excluding the effect of the non-cash, non-recurring Indigenisation
charge and unrealised foreign exchange profits) was 4.12 cents per share &ndash; a 31% increase on 2011.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Cash flow from operations
in 2012 before capital investment was $29,721,000 (2011: $17,428,000). </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">At December 31, 2012,
the Company had cash and cash equivalents of $27,942,000 compared to $24,615,000 at September 30, 2012, and $9,686,000 at December
31, 2011.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify"><B>Indigenisation</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">On October 11, 2012
Caledonia announced the completion of the transactions that implemented the Indigenisation of Blanket. Following completion of
these transactions Caledonia now owns 49% of Blanket. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Caledonia has received
the Certificate of Compliance from the Government of Zimbabwe which confirms that Blanket is fully compliant with the Indigenisation
and Economic Empowerment Act. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/110% Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><FONT STYLE="font: 11pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 12.1pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Caledonia will receive
the $30.09 million proceeds of the sale to indigenous Zimbabweans as the facilitation loans are progressively repaid. The outstanding
facilitation loans carry interest at LIBOR plus 10%. </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>Nama Base Metals Project,
Zambia</B></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">The 2012 drilling programme
at the Company&rsquo;s Nama base metals project comprised 10,903m over 20 holes and confirmed the existence of a copper-bearing
mineralised zone. Shallow drilling will be undertaken on the identified zone to improve resource definition. Initial exploration
work will also be carried out on additional zones of mineralisation that have been identified to the west and south of the mineralised
zone. Caledonia expects to issue a NI 43-101 compliant copper resource statement by June 30, 2013 and a preliminary feasibility
study by the end of 2013, on the possible mining of near-surface copper oxide material.</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>Growth Strategy</B></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">As an indigenised entity,
Blanket can now develop and implement its long term growth strategy. The recently re-constituted Blanket board, which includes
representatives of the Indigenous Zimbabwean shareholders, has approved a capital investment programme for 2013 and a 4-year growth
strategy for 2014 to 2017.</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">This investment programme
is estimated to cost US$37 million and will be funded pro-rata by all of Blanket&rsquo;s shareholders from Blanket&rsquo;s internally
generated cash.</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">The investment programme
is expected to result in progressive increases in gold production to approximately 76,000oz in 2016 (of which 49% will be attributable
to Caledonia) with further upside potential coming from the development of the satellite deposits which are built into the capital
expenditure programme but not reflected in the gold production target.</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>Dividend Policy</B></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">Caledonia will continue
to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take
advantage of further opportunities without the need to raise third party finance. The directors will to continue to assess further
dividend payments at least annually in light of Caledonia&rsquo;s continued financial performance and financial resources.</P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><B>Commenting on these results,
Stefan Hayden, Caledonia&rsquo;s President and Chief Operating Officer said: </B></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify">&ldquo;<I>I am delighted
to again report further strong operational and financial performance. Since production re-commenced at the Blanket Mine in 2009,
we have quadrupled gold production and for the 12 months to December 31, 2012 we achieved Blanket&rsquo;s all-time record high
for annual production at 45,465 ounces of gold. As a result of the latest production increases, we have also reduced the cash cost
of production to US$571 per ounce; making Caledonia one of the lowest cost gold producers in the world. </I></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><I>Following the implementation
of Indigenisation at Blanket, Caledonia announced in January 2013 a growth strategy to increase production at Blanket by 90% to
76,000 ounces of gold in 2016. This plan is estimated to cost US$37 million and will be entirely funded from Blanket&rsquo;s internally
generated cash. The target production of 76,000 ounces excludes any potential production upside from any of Blanket&rsquo;s highly
prospective 18 satellite properties. Exploration and development work is currently well underway at the first three satellites
and I look forward to announcing the preliminary results of this work in due course. Importantly, the Blanket crushing and metallurgical
plant has surplus capacity and any incremental ore from these satellites could be treated with modest additional capital investment.</I></P>

<P STYLE="font: 11pt/110% Arial, Helvetica, Sans-Serif; margin: 6pt 12.1pt 6pt 0; text-align: justify"><I>In addition, further
exploration work at our base metals project, Nama in Zambia is being carried out with a view to issuing a NI 43-101 compliant copper
resource statement this year.</I>&rdquo;</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">Further information regarding Caledonia&rsquo;s
exploration activities and operations along with its latest financial statements and Management&rsquo;s Discussion and Analysis
can be found at <FONT STYLE="color: blue"><U>www.caledoniamining.com.</U></FONT></P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 11.65pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 11.65pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 11.65pt 0 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify"><B>Caledonia Mining Corporation</B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">Mark Learmonth</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">Tel: + 27 11&nbsp;447 2499</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">marklearmonth@caledoniamining.com</P></TD>
    <TD STYLE="width: 51%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 25.9pt; text-align: justify"><B>Canaccord Genuity Limited</B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 25.9pt; text-align: justify">Andrew Chubb / Sebastian Jones</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 25.9pt; text-align: justify">Tel: + 44 20 7523 8000</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; padding-right: 12.1pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; padding-right: 12.1pt; padding-left: 25.9pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 2.4pt; text-indent: -2.4pt"><B><U>Newgate Threadneedle </U></B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">Beth Harris / Adam Lloyd</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: justify">Tel: +44 20 7653 9850</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 25.9pt"><B>CHF Investor Relations</B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 25.9pt">Jeremy Hill</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 25.9pt">Tel : +1 416 868 1079 x 238</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 25.9pt">jeremy@chfir.com</P>
        <P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 25.9pt">&nbsp;</P>
        <P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 25.9pt">&nbsp;</P></TD></TR>
</TABLE>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="7" STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0"><B>Consolidated Statement of Comprehensive Income </B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0"><B>(<I>In thousands of Canadian dollars except per share amounts)</I></B></P></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>For the 3 months ended Dec 31</B></FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>For the 12 months ended</B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Dec 31</B></P></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>2012</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2011</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>2012</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2011</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">$</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Revenue</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>17,612</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">15,972</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>75,221</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">55,705</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">22,388</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Royalty</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,227)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(723)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(5,261)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(2,514)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(825)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Production costs</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(6,502)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(5,233)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(25,653)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(21,093)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(12,617)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Depreciation</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(633)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(1,004)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(3,392)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(2,983)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(2,586)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Gross profit</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>9,250</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">9,012</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>40,915</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">29,115</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">6,360</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,108)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(1,418)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(4,055)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(3,351)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(2,807)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Share-based payment expense</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(14,569)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(1,101)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(354)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Indigenisation expenses </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(425)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,700)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(326)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Foreign exchange gain/(loss)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>570</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">143</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(4)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">303</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">359</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Impairment</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(330)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(3,884)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(330)</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(3,884)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Other income/(expense)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(2)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(1,064)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Results from operating activities</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>7,957</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">3,851</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>20,257</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">20,756</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2,494</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Net finance income/(cost)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>25</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">28</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(81)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(162)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">3</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Profit before tax</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>7,982</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">3,879</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>20,176</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">20,594</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2,497</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Tax expense</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(4,032)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(2,510)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(12,818)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(8,464)</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(1,042)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Profit for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>3,950</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1,369</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>7,358</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Other comprehensive (loss)/income</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Valuation of investments to fair value</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(45)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Foreign currency translation differences for foreign operations</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>370</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(812)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,589)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">265</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: right">(1,404)</P></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Other comprehensive income/(loss) for the period, net of income tax</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>370</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(812)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,589)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">265</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">(1,449)</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Total comprehensive income for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>4,320</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">557</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>5,769</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">12,395</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Profit/(loss) attributable to:</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Owners of the Company</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>3,353</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1,369</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>8,720</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>597</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,362)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Profit for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>3,950</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1,369</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>7,358</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">12,130</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1,455</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Total comprehensive income/(loss) attributable to:</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Owners of the Company</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>3,685</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">557</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>7,112</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">12,395</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>635</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>(1,343)</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Total comprehensive income for the period</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>4,320</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">557</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>5,769</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">12,395</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">6</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Earnings per share (cents)</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Basic </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>0.64</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.27</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>1.72</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2.42</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.30</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Diluted </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>0.64</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.25</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>1.72</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">2.38</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.30</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>Adjusted earnings per share (cents)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Basic</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>0.60</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">1.02</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>4.12</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">3.14</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.26</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">Diluted</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>0.60</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.94</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><B>4.10</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">3.08</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif">0.26</FONT></TD></TR>
<TR>
    <TD STYLE="width: 47%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD></TR>
</TABLE>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="9" STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0"><B>Consolidated Statement of Cash Flows </B></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0"><I>(In thousands of Canadian dollars)</I></P></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD>
    <TD NOWRAP COLSPAN="7" STYLE="vertical-align: bottom; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>For the 12 months ended Dec 31</B></FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>2012</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">2011</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>$</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Cash flows from operating activities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Profits for the period</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>7,358</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">12,130</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">1,455</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Adjustments for:</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Adjustments to reconcile net cash from operations</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>31,099</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">16,648</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">4,210</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Changes in non-cash working capital</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>2,963</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(3,183)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">950</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Cash flows provided from operations </B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>41,420</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">25,595</FONT></TD>
    <TD COLSPAN="3" STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">6,615</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Net interest paid</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(81)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(162)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(3)</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Tax paid</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(11,618)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(8,005)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(1)</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Net cash from operating activities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>29,721</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">17,428</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">6,611</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Cash flows from investing activities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Property, plant and equipment additions</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(7,909)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(8,528)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(7,304)</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Proceeds on sale of investment</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>38</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">51</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Net cash used in investing activities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(7,871)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(8,528)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(7,253)</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Cash flows from financing activities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Bank overdraft increase/(decrease)</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(430)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(317)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">159</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Advance dividend paid</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(3,739)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Proceeds from the issue of share capital</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>974</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">38</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Net cash from (used in) financing activities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(3,195)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(279)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">159</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Net increase in cash and cash equivalents</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>18,655</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">8,621</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(483)</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Cash and cash equivalents at beginning of the year </FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>9,686</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">1,145</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">1,622</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Effect of exchange rate fluctuations on cash held</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>(399)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">(80)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">6</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Cash and cash equivalents at year end </B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>27,942</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">9,686</FONT></TD>
    <TD COLSPAN="3" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">1,145</FONT></TD></TR>
<TR>
    <TD STYLE="width: 56%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP COLSPAN="6" STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Consolidated Statements of Financial Position </B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><I>(In thousands of Canadian dollars) </I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><I>As at</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Dec 31,</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Dec 31,</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Dec, 31</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>2012</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">2011</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">2010</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>$</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">$</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-bottom: 4.5pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Total non-current assets</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>36,533</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">34,248</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">31,978</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Inventories</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>5,508</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">4,482</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">2,624</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Prepayments</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>126</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">334</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">93</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Trade and other receivables</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>1,718</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">3,652</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">2,314</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Cash and cash equivalents</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>27,942</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">9,686</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">1,145</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Total assets</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>71,827</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">52,402</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">38,159</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-bottom: 4.5pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Total non-current liabilities</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>6,928</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">7,822</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">7,050</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Trade and other payables</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>5,775</B></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">3,841</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">3,882</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Zimbabwe advance dividend accrual</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>1,987</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Income taxes payable</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>1,518</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">295</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">-</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">Bank overdraft</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">430</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">747</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Total liabilities</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>16,208</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">12,388</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">11,679</FONT></TD></TR>
<TR>
    <TD STYLE="border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Total equity</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>55,619</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">40,014</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">26,480</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>Total equity and liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-style: italic; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black"><B>71,827</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">52,402</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif; color: black">38,159</FONT></TD></TR>
<TR>
    <TD STYLE="width: 45%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 12.1pt 0 0; text-align: center"><B>&nbsp;</B></P>



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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
