Annual Information Update

2007 OBJECTIVES and ACHIEVEMENTS

     2007 Objectives                               2007 Achievements

  -  Complete the planned metallurgical test       Completed the planned test work and have signed
     work on Nama mineralization, and conclude     four 5 year Cobalt Hydroxide Sales Agreements for
     the long term cobalt purchase agreements.     over 10,000 tonnes of cobalt metal per annum with
                                                   large Chinese refiners.

  -  Arrange necessary financing to support the    Raised $4,380,000 from the exercise of
     activities required to meet these objectives. 29,888,259 warrants.

  -  Conclude the sale of Barbrook and             Accepted offers of $9,100,000 from Eastern
     Eersteling Gold Mines.                        Goldfields for Barbrook and $3,810,000 for
                                                   Eersteling from a private Canadian company in the
                                                   first quarter of 2008.

  -  Complete the No. 4 shaft expansion project    Shaft equipping and commissioning from surface
     at Blanket Mine, expand the milling rate      down to 825 meter level completed. The shaft
     from 600 tonnes per day to 1,000 tonnes       bottom loading infrastructure and crusher stations
     per day, and increase gold production from    will be completed once outstanding foreign
     25,000 ounce per annum to approximately       exchange for gold sold is received from the
     40,000 ounces per annum                       Reserve Bank of Zimbabwe.

  -  Further explore the PGE, Ni, Cu resource      Completed the soil sampling program on the
     on the Rooipoort and Grasvally properties     Jaagbaan, Moorddrift and Grasvally properties
     which form the Rooipoort PGE/Ni/Cu            acquired from Falconbridge.
     Exploration Project in South Africa

  -  Finalise agreement with joint-venture         Protracted negotiations with potential JV partner
     partner to carry out additional exploration   were eventually terminated by the Corporation.
     programs at the Kadola copper/cobalt and      Negotiations with the Ministry to convert Kadola
     the Eureka copper/gold properties in          licenses to retention licenses continue.
     Zambia.

  -  Conclude necessary agreements to satisfy      Agreement reached with suitable BEE partners
     the South Africa Black Economic               which will be implemented as required by the
     Empowerment ("BEE") requirements.             exploration projects.

  -  Pursue possible acquisitions and/or           Application has been made for three additional
     strategic partnerships to expand the          PGE exploration licenses on the Eastern Limb of
     Corporation's portfolio of properties in      the Bushveld complex in South Africa.
     Southern Africa.

2008 OBJECTIVES

 2008 Objectives

- Recruit a suitable CEO and management team for Caledonia Nama Limited
- Complete the re-construction of portions of the existing access road into Nama to facilitate easieraccess into the Project Area.
- Complete the 2008 trenching programs on "A ore body" with a view to confirming the mining grade, and on the newly identified Anomaly "R- Clinic" which was pitted during the 2007 exploration program.
- Complete the conversion of Nama Retention License to a Large Scale Mining License.
- Complete and have approved by the Zambian authorities the Environmental Impact Assessment for the operations at Nama.
- Amend the National Instrument ("NI") 43-101 Resource Statements on Nama Project Anomaly A and C based on 2007 Drilling Program and 2008 trenching program.
- Commission a Chinese Feasibility Study ("CFS") on the Nama Project and then complete the Bankable Feasibility Study ("BFS").
- Commence and complete the planned 2008 Exploration and Drilling Programs at Nama.
- Dependent and based on the successful BFS, complete the financing requirement for the establishment of the mining and metallurgical operations at Nama.
- Upon completion of the financing arrangements establish the Nama mine site as rapidly as possible.
- Commence operations at Nama as early in 2009 as possible, and thereafter build the Nama operations to full production as quickly as practical.
- Complete the Blanket No.4 Shaft Expansion Project to be able to produce 40,000 oz of gold per annum, subject to the economic situation in Zimbabwe.
- Conclude the sales of the Barbrook and Eersteling Gold mines in South Africa.
- Conclude a JV for the Mulonga Plain diamond exploration project and renew the Mulonga Plain and Kashiji River licenses.
- Drill the central zone targets identified on the Rooipoort project.
- Conclude a JV Agreement on the platinum group metals, gold and nickel and copper base metals ("PGE") Projects in South Africa.

PERFORMANCE HIGHLIGHTS
Financial - C$ 000's                        2007     2006   2005(2)  2004(2) 2003(1)(2)
Revenue from Sales                        10,039   13,586        6        3         58
Gross Income (Loss)                          294    5,014     (751)    (466)       (94)
(Expenses)/Income (General and
 Administration, Interest ,               (4,195)  (2,047)  (2,997)  (2,304)    14,476)
Amortization and foreign exchange)
Net Income (Loss) - before Write-Downs,
 tax and discontinued operations          (3,901)   2.967   (3,748)  (2,770)    (4,811)
Discontinued Operations                     (709)  (7,990)  (5,932)  (7,222)       (36)
Income (Loss) - after Write-Downs and
 discontinued operations.                 (4,615)  (5,675)  (9,680)  (9,979)   (14,496)
Cash                                          76    1,252    1,076    6,470      4,179
Current Assets                             4,408    8,773    2,264    7,481      4,573
Assets                                    29,492   31,456   22,338   23,666     19,530
Current Liabilities                        4,343    5,899    2,589    1,062        790
Long Term Liabilities                      1,054    1,221      377      423      1,089
Working Capital surplus/(Deficiency)          65    2,874     (325)   6,419      3,783
Shareholders' Equity                      24,095   24,336   19,372   22,181     17,651
Total Capital Expenditures including
 Mineral Properties                        3,250    3,579    5,284    3,813      2,279
Expenditures on Mineral Properties         2,633      659    2,583    2,298      2,042
Financing Raised                           4,380    7,559    6,588   14,314      9,511
Share Information
Market Capitalization ($ Thousands)       53,666   45,798   42,632   39,145    105,955
Shares Outstanding (Thousands)           487,869  457,981  370,715  301,112    252,274
Warrants & Options (Thousands)            35.148  102,354   34,748   52,342     27,348
Basic and diluted eps from continuing
 operations                               (0.008)   0.005   (0.012)  (0.010)     (0.06)
Basic and diluted eps from discontinued
 operations                               (0.001)  (0.018)  (0.019)  (0.024)     (0.00)
Basic and diluted eps for the year        (0.009)  (0.013)  (0.031)  (0.034)     (0.06)
TSE Share Price High                        0.23     0.23     0.18    0.465      0.610
TSE Share Price Low                         0.09    0.095     0.10     0.12      0.215
TSE Share Volume (Thousands)             101,156  132,323   61,214   56,934     99,233
NASDAQ Share Price High (US$)               0.20    0.204     0.15     0.37       0.39
NASDAQ Share Price Low (US$)               0.074    0.082     0.08     0.10       0.16
NASDAQ Share Volume (Thousands)          194,192  212,028  105,151  210,251    440,811
AIM Share Price High (pence)                 8.0     13.0     6.25        -          -
AIM Share Price Low (pence)                  4.1      4.9     4.50        -          -
AIM Share Volume (Thousands)               8,710   12,162      856        -          -
Operating Results (1) (3)
Gold Production (Ounces)                  13,985   12,437    4,951    1,693      1,187
Silver Production (Ounces)                 1,332    1,038      264        -          -
                                                                         66         42
Year End Gold Resource (Thousand Ounces)
 - Blanket Mine                              441      500        -        -          -

(1) Restated for the adoption of the Asset Retirement Obligations change in accounting policy 
(2) Restated to reflect the discontinued operations nature of Barbrook and Eersteling Mines
(3) 2006 reflects Blanket Mine only, 2005 and before are historical numbers reflecting Barbrook and Eersteling
Mines

Letter to Shareholders

The 2007 Financial Year proved to be a difficult year particularly for the Blanket Mine in Zimbabwe. For the
financial year ended December 31, 2007 the Corporation recorded a gross profit of $294,000 from revenues of
$10,039,000, which translated into a loss of $4,615,000 and a diluted loss of $0.009 per share.

The extremely challenging economic environment in Zimbabwe caused delays in completing the No 4 shaft expansion
project as planned, which in turn severely interfered with production at the Blanket Gold Mine. Despite the
restrictive economic conditions, the frequent power supply shortages and the continuous delays in receiving
foreign currency for gold sale proceeds from the Reserve Bank of Zimbabwe ("RBZ"), Blanket produced 13,985 ounces
of gold during the 2007 year. The No.4 shaft expansion could not be completed as planned due entirely to the
delays in receiving US dollar funds from the RBZ and the frequent power cuts. These delayed payments caused an
unplanned three month extension of the shaft expansion project timetable which then ran from February until the
end of July 2007. During this period Blanket had to focus on processing lower grade sands rather than ore in order
to achieve gold production. Since then and as a direct result of the ongoing delays in receiving foreign exchange
payments Blanket has been unable to restore gold production to the 25,000 oz per year level or to complete the No
4 shaft expansion project

While the prognosis for Zimbabwe remains problematic, the Blanket mine continues, at this stage, to be self-
funding. Blanket will however only be able to return to the 25,000 oz per annum production level once the RBZ
restores foreign exchange payments to their correct and legislated levels. Management continues to engage
proactively with the RBZ to ensure that gold already delivered is promptly paid for. Hopefully at some stage
during 2008 Blanket will be able to focus on completing the No.4 shaft expansion project in order to realize the
planned increase in production to 40,000 oz per annum, and to continue with the underground development necessary
to open up sufficient reserves to sustain the planned increase in production, and to further explore ways to
control costs in the hyperinflationary environment.

In Zambia, the Nama Cobalt Project continued to progress well and the focus for this year will be on advancing the
project through to the development phase, provided the Chinese Feasibility Study and the subsequent Bankable
Feasibility Study allow sufficient funds to be raised. Two National Instrument ("NI") 43-101 resource statements,
compiled by a qualified independent, covering Anomaly A and C were published in 2007. Drilling programs were
undertaken in 2007 and a total of 4,099 meters diamond drilling and 5,560 meters of reverse circulation drilling
was completed. The assay and modeling results from the 2007 drilling program are being evaluated along with the
historic drill results and a further Independent Technical Report will be issued once the 2007 drilling evaluation
is completed. The Environmental Impact Assessment for Nama, covering the new access road and power line routes,
was completed and has been submitted to the Zambian authorities for approval.

Negotiations with cobalt end-users continued during the year and have recently resulted in the successful
conclusion of four off-take agreements to supply a total of 51,560 tonnes of cobalt metal equivalent from 2009 to
2013.

Turning to our other assets, we recently signed agreements for the sale of the Barbrook and Eersteling companies
including their liabilities of $1.59 million for a total cash consideration of $12.91 million. These transactions
are expected to close during the second and third quarter of this year respectively.

The sale of Eersteling has necessitated the transfer of the Rooipoort platinum interest from Eersteling into our
100% South African subsidiary Maid O' The Mist (Pty) Ltd, a process which is well underway. We have also applied
for three Prospecting Licenses on highly prospective PGE properties located on the Eastern limb of the Bushveld
Igneous Complex in South Africa and await the granting of these licenses. We have commenced negotiations with a
suitable JV partner for our platinum interests as the Corporation's focus for the next few years will be on Nama.

Looking to the year ahead, the Corporation's priority focus will be on developing the Nama cobalt project by
completing a favorable feasibility study and raising sufficient funding with a view to starting operations as
early in 2009 as possible.

On behalf of the Board of Directors,
S. E. Hayden 31 March, 2008 President and Chief Executive Officer

CALEDONIA MINING CORPORATION March 31, 2008
Management's Discussion and Analysis

This discussion and analysis of the consolidated operating results and financial condition of Caledonia Mining
Corporation ("the Corporation") for the fiscal years ended December 31, 2007, December 31, 2006 and December 31,
2005 should be read in conjunction with the Consolidated Financial Statements and Press Releases issued by the
Corporation, all of which are available from the System for Electronic Data Analysis and Retrieval at
www.sedar.com or from the Corporation's website at www.caledoniamining.com. The Consolidated Financial Statements
and related notes have been prepared in accordance with Canadian Generally Accepted Accounting Principles
("GAAP").

Note that all currency references in this document are to Canadian dollars. All figures are in thousands of
Canadian Dollars unless otherwise specified.

Overall Performance
The Corporation was formed in February 1992 and is listed on the Toronto Stock Exchange as "CAL", on NASDAQ-OTCBB
as "CALVF", and on London's AIM as "CMCL".

1. VISION AND STRATEGY

The Corporation is an exploration, development and mining company with a large primary cobalt deposit in Zambia, a
producing gold operation in Zimbabwe, two non-producing gold mines in South Africa which are in the process of
being sold, and a diversified exploration portfolio of PGE projects in South Africa, diamond projects in Canada,
Zambia and South Africa, one of which is in joint venture with an unrelated company.  The Corporation's objective
is to develop its asset base into a significant diversified international mining company through profitable cobalt
and gold production and successful exploration activity, focused primarily on Southern Africa.

The Corporation's business model is to identify and acquire properties or projects early in the development cycle
which have the potential to become low cost operations, and then add value by developing the asset, either as an
operator or through a joint venture agreement. The possibility of divestiture in whole or part will be considered
at different points in time and will be governed by the benefit to shareholders. Where appropriate, the
Corporation will seek strategic alliances with well-managed exploration or operating companies through existing or
new joint ventures.

The Corporation has a strong management team and Board of Directors with diverse expertise in mineral exploration,
mine development, finance, production and marketing.

With the expectation of continuing high levels of commodity prices over the long term, the Corporation is
following the strategy of diversification through its current exploration activities for cobalt, gold, platinum
group metals, base metals and diamonds.  With the potential of improved political conditions in many Southern
African countries, the Corporation is reviewing mining opportunities in these countries.

The sales of the Barbrook and Eersteling Gold mines in South Africa are expected to be completed during the second
and third quarter of 2008 respectively.

2. OPERATIONS

Blanket Mine (1983) Private Limited - Gold
The Blanket Mine owned by the Corporation's 100% held subsidiary Caledonia Holdings Zimbabwe is located 560 km
south of Harare the capital city of Zimbabwe and 150 km south of Bulawayo, the country's second largest city. The
town of Gwanda, the provincial capital of Matabeleland South, is located 16 km from the mine. The mine is situated
in the Gwanda Greenstone Belt from which gold was first produced in the 1800's. Blanket Mine owns extensive claims
throughout this belt. The mine property was first pegged

in 1904 with mining and metallurgical plant operations starting in 1906. The mine to date has produced over a
million ounces of gold.

Geological Setting
Like most of the gold mines in Zimbabwe, the Blanket Mine is situated in a typical greenstone terrain, the 70 km
long by 15 km wide Gwanda Greenstone belt. This terrain comprises supra crustal metavolcanic rocks similar to
those found in the Barberton area of South Africa and the Abitibi area of Canada. The Blanket property is one of
three remaining large, gold producers, from a belt that has had no less than 268 operating mines over time. The
other two current producers are the neighbouring Vubachikwe mine owned and operated by Forbes and Thompson and the
Jessie mine on the south eastern end of the belt and owned by F. A. Stewart Pvt. Ltd.

Property Geology
Blanket mine is part of the group that makes up the North Western Mining camp also called the Sabiwa group of
mines extending from Jethro to the south, through Blanket itself, to the currently defunct Feudal, AR South, AR
Main, Sheet, Eroica and Lima mines. Gold showings from Sabiwa, Jean, Provost, Redwick, Old Lima and Smiler form a
northern continuation of the Vubachikwe property where gold is hosted by banded iron formations.

The geological sequence strikes north-south, dips vertically and consists, from east to west, of a basal felsic
unit which is not known to carry mineralisation.  It is generally on this lithology type that the various tailings
disposal sites are located. Above this unit is the ultramafic unit that includes the banded iron formations
hosting the eastern dormant cluster of mines and the ore bodies of the nearby Vubachikwe mine complex. The active
Blanket ore bodies are found on the next unit, the mafics. An andesitic unit which lies to the west, caps this
whole stratigraphy. A regional dolerite sill cuts the entire sequence from Vubachikwe through Blanket to Smiler.

Ore bodies at Blanket are epigenetic. They are associated with a later, regionally developed deformation zone
characterized by areas of high strain, wrapping around relatively underformed remnants of the original basaltic
lava flows. It is within the higher strain regime (highly sheared rocks) that the wider of the ore bodies are
located.

Summary of Reserves and Resources at Blanket Mine at December 31, 2007
 MINERAL RESERVES ( at a Gold price of US$500/oz)
 Classification                              Tonnes       Grade Au g/t   Gold Content
                                                                                  (oz)
 Proven Ore
 Total Proven Ore including Pillars       1,301,000               3.84        160,800
 Probable Ore
 Operating and Development Areas          2,332,000               3.74        280,400
 Total Proven + Probable Ore              3,633,000               3.78        441,200
 MINERAL RESOURCES (at a Gold price of US$500/oz)
 Classification                              Tonnes       Grade Au g/t   Gold Content
                                                                                  (oz)
 Indicated                                  520,300               3.79         63,400
 Inferred                                 2,519,800               5.27         (i)(i)
 Tonnages and ounces are rounded to the nearest 100

Note (i)(i) In keeping with the requirements of NI 43-101, Inferred Resources are reported without estimates of metal quantities.

(i) 1 tonne  equals  1,000 kilograms  equals  2,204.6 pounds
(ii) Some numbers may not add due to rounding

Mr. David Grant, C. Geol, FGS, Pr. Sci. Nat., an independent consultant is the "Independent Qualified Person" for
Blanket's reserves and resources as required by National Instrument 43-101 of the Canadian Securities
Administrators.

Metallurgical Process
Run of mine ore is crushed to - 12mm in the 3 stage crushing circuit. This material is then fed into two 1.8m by
3.6m rod mills where it is milled down to approximately 70% passing 75 microns, before being passed through two 30
inch Knelson Concentrators where approximately 49% of total gold production is recovered as gravity gold. The
Knelson Concentrator tails are pumped through cyclones whose underflow reports to a 3.66 meter by 4.9 meter, 750
kW regrind ball mill.  The product from the regrind mill is pumped into a carbon-in-leach ("CIL") plant consisting
of eight, 600 cubic meter leach tanks each equipped with 45 kW mixers where leaching at 50% solids and
simultaneous adsorption of dissolved gold onto activated carbon takes place.

Elution of the gold from the loaded carbon and subsequent electro-winning is done on site. Gold is deposited on
wire wool cathodes, the loaded cathodes are acid-digested and the resultant gold solids are smelted after which
the bullion is delivered, as required by Zimbabwean law to the Government-operated Fidelity Printers and Refiners.
The Reserve Bank of Zimbabwe ("RBZ") is then responsible for payment of the gold delivered which has been
nominated for payment either as 100% in the local currency or as to 35% in the local currency and 65% in foreign
(US Dollar) currency amounts.

The CIL plant has a design capacity of 3,800 tonnes of milled ore per day, from its previous use for reclaimed
tailings processing. The present crushing and milling circuit is being expanded from 600 tonnes per day to 1,000
tonnes per day ore throughput capacity to handle the planned increase in mine production from the No 4 shaft
expansion project. The plant tailings are reduced in cyanide content and deposited on two licensed tailing
impoundment areas.

Production Operations
The underground workings produce 600 tonnes of ore daily using a long-hole open stoping method. Ore is trammed to
one of a number of shafts and hoisted to surface. The current capital program at the No. 4 shaft will, once it
becomes operational, streamline the ore hoisting and increase the overall hoisting capacity at the mine to over
1,000 tonnes per day. Blanket employs approximately 800 people.

3. DISCONTINUED OPERATIONS

Barbrook Mines Limited
On February 21, 2008 the Corporation accepted an offer from Eastern Goldfields to purchase the entire issued share
capital in Barbrook Mines Limited, its debts to the Corporation, and its payables of approximately $1,440,000 for
approximately $9,100,000.

Eersteling Gold Mining Company Limited
On March 3, 2008 the Corporation signed an Interim Agreement with a private Canadian company to purchase the
entire issued share capital in Eersteling Gold Mining Company Limited ("EGM") for $3,810,000 excluding the
Rooipoort platinum exploration assets currently held by EGM which are in the process of being transferred to Maid
O' The Mist, a 100% held South African subsidiary of the Corporation.

4. MARKETING

All gold bullion produced in Zimbabwe is delivered to Fidelity Printers and Refiners in Harare and sold under
various methods of election, more fully described in Section 6.

5. KEY PERFORMANCE FACTORS

The key performance factor of a gold mine is the ability to produce gold at a cost per ounce that is low enough to
pay all obligations and generate an acceptable return to shareholders.  The price of gold is established in an
international market. The price of gold plays a large part in determining the profitability of gold mines and
similarly the Zimbabwean dollar price of gold plays a large part in determining the profitability of Zimbabwean
gold mines. During 2007, the USD gold price per ounce ranged from a low of $608 to a high of $834 i.e. a 37%
increase. The benefit of this increase was not fully realized in Zimbabwe as gold is not sold at international
prices but in terms of Government Monetary policy (more fully described under 6 below) which results in a
discounted gold price being received irrespective of whether it is paid for solely in Zimbabwe Dollars or a
combination of US Dollars (65%) and Zimbabwe Dollars (35%).

Blanket Mine has been consolidated into the results of the Corporation from July, 1, 2006. During 2007 the
Zimbabwe economy continued to falter with inflation moving from 1,200% at the beginning of the year to 25,000% pa
by year end and to 100,000% by the end of February 2008.  The Zimbabwe dollar was officially devalued against the
US dollar during the third quarter of 2007 from Z$250:USD1 to Z$30,000: USD1 and remained at that fixed rate to
year end. The Corporation believes it is appropriate to consolidate Blanket Mine into its annual financial
statements as it exercises control over the operations, is able to sell 65% of gold produced in US dollars, retain
these US dollars in a foreign currency, and has government approval to make loan repayments from its available
foreign currency funds.

During the year the gold support price was reviewed more regularly than in previous years but because of high
inflation and declining value of the Zimbabwe Dollar, gold continued to be sold to the Government pursuant to the
current Zimbabwean legislation at a substantial discount to the international price as detailed above.

Negotiations are currently in progress with a suitable partner regarding a "farm-in" arrangement in respect of the
Corporation's PGE assets. Platinum, palladium, nickel and copper - the principle contained metals in the PGE
properties as well as gold, previously discussed, have shown substantial price increases in 2007 and will render
the properties more attractive to JV partners.

6. SELECTED ANNUAL INFORMATION -

The following information is given for the last three fiscal year-ends of the Corporation:

C$000's except for earnings per share amounts. 

                                           December  31,   December  31, December  31,
                                                   2007         2006 (1)      2005 (1)
Net sales or total revenues                      10,039          13,586             6
Net (loss) or income before discontinued
items or extraordinary items:                    (3,906)          2,315        (3,748)
- per share undiluted                           ($0.008)     $    0.005       ($0.012)
- per share diluted                             ($0.008)     $    0.005       ($0.012)
Discontinued Operations                            (709)         (7,990)       (5,932)
Net (loss)                                       (4,615)         (5,675)       (9,680)
- per share undiluted                           ($0.009)        ($0.013)      ($0.031)
- per share diluted                             ($0.009)        ($0.013)      ($0.031)
Comprehensive (loss)                             (4,703)         (5,675)       (9,680)
Total assets                                     29,492          31,456        22,338
Total long-term financial liabilities             1,054           1,221           377
Cash dividends declared per share                   Nil             Nil           Nil

(1) Figures have been reclassified to reflect Barbrook and Eersteling Mines under Discontinued Operations.

The above data was prepared in accordance with Canadian Generally Accepted Accounting Principles. The results for
2007 and prior years have been presented on the basis that Barbrook and Eersteling Mines

are discontinued operations and are classified as assets for sale. Neither sale transaction was concluded by
December 31, 2007 but subsequent Sale Agreements for the purchase of the entire share capital of Barbrook Gold
Mines Limited and Eersteling Gold Mining Company were signed with two independent buyers. The price for Barbrook
is approximately $9,100,000 and for Eersteling is $3,810,000.

The above results for 2007 include Blanket Mine's results for the 12 months ending December 2007. During 2007 gold
production at Blanket was disrupted by the shaft expansion project from February until the end of July. The delays
were caused by a combination of frequent power cuts and the irregular and partial payment of US Dollars for gold
delivered. During this period production was focused on processing sands as underground operations were curtailed
by the shaft closure for equipping. Due to the economic climate in Zimbabwe, Blanket did not receive the full US
Dollar proceeds for gold sales and thus the completion of the shaft expansion project was not possible. Entirely
as a result of these factors Blanket has not been able to achieve and sustain gold production even at the levels
achieved prior to the shaft expansion.

For the year ended December 31, 2007, the Corporation recorded a net loss after taxes, before discontinued
operations, of $3,906,000 ($2,315,000 income in 2006 and a $3,748,000 loss in 2005), of which Blanket Mine
contributed a loss of $510,000. Included in the 2007 loss is a foreign exchange loss of $1,012,000 ($143,000 gain
in 2006 and a $50,000 loss in 2005). Blanket Mine reported an unrealized loss on foreign exchange of $1,203,000
during 2007. During 2007 the gross income from operations (before discontinued operations) was $294,000
($5,014,000 income in 2006 and a $751,000 loss in 2005).

During 2007 the carrying value of $750,000 of the Kikerk Lake venture was written off leading to a total asset
write-down of $750,000 ($nil in 2006 and $152,000 in 2005 of other mineral properties).    The income tax expense
of $5,000 relates to withholding taxes paid by Blanket Mine. The operating income of $294,000 includes an
amortization charge of $18,000 ($40,000 in 2006 and $27,000 in 2005).

Blanket Mine recorded revenue for the 12 months of $10,001,000 from the 13,985 ounces of gold sold. During 2007
the RBZ (RBZ) stipulated various possible payment methods for gold sales. The methods varied from "65% of revenue
in USD and 35% of revenue in Zimbabwean dollars ("Z$") to 100% revenue received in Z$ if gold is sold at the gold
support price. During the same period, the official exchange rate in Zimbabwe changed from Z$250 per US$1 to
Z$30,000 per US$1.

The changes in the gold support price and the effective exchange rate received are shown in the table below

                           Jan        Feb        Mar        Apr        May        June
Ave gold price
 USD/oz                    631        665        655        679        667         655
Z$ Gold support
 price per gm           16,000     16,000     16,000     16,000    350,000   1,000,000
Effective Z$:USD
 exchange rate             789        748        760        733     16,322      47,489
Old Mutual Implied
 Rate- Z$'s per US$1     3,508      5,735     16,646     17,618     26,794     126,828
Effective discount
to gold price based
 on buying power of the
 Z$                         78%        87%        95%        96%        39%         63%

                           Jul        Aug       Sept        Oct        Nov         Dec
Ave gold price
 USD/oz                    665        665        713        755        806         803
Z$ Gold support
 price per gm        3,000,000  3,500,000  4,000,000  5,000,000  7,500,000  10,000,000
Effective Z$:USD
 exchange rate         140,324    163,712    174,503    205,995    289,440     387,362
Old Mutual Implied
 Rate- Z$'s per US$1   139,747    141,164    298,371    884,062  2,545,416   4,422,203
Effective discount
to gold price based
 on buying power of the Z$   0%         0%        42%        77%        89%         91%

In January 2008 the gold support price was increased to Z$100 million per gram and in March 2008 was further
increased to Z$700 million per gram.

During the year, the quarterly results ("Q") of Blanket Mine have been translated into C$ using the rates of
exchange ("ROE") per the table below.

Z$'s per C$1                      Q4 ROE  Q3 ROE Q2 ROE Q1 ROE
Sales revenue                    275,926 156,590 14,220    713
Other income statement items     260,870 150,507 21,070    758
Monetary assets and liabilities  378,644 168,645 47,451    758
All other assets and liabilities  101.19  101.19 101.19 101.19

The use of the above rates is a change in estimate, and the rates are determined as follows:

Sales Revenue                    The actual rate of exchange received on gold sales
                                 depending on the sale method chosen

Other income statement items     The average effective rate of exchange determined
                                 by the gold support price during the quarter

Monetary assets and liabilities  The quarter end effective rate of exchange
                                 determined by the gold support price during the
                                 quarter

All other assets and liabilities Historic rate determined at July 1, 2006

During 2007, the Corporation invested $3,250,000 in capital assets and mineral properties ($3,579,000 in 2006 and
$5,284,000 in 2005). Of the amount invested in 2007, Blanket Mine spent $616,000 Nama spent $2,470,000 and
Rooipoort spent $141,000. During the year $4,380,000 was raised from private placements, and the exercise of
warrants and options, ($7,559,000 in 2006 and $6,588,000 in 2005) all net of issue costs.

The basic net income/ (loss) per share, for continuing operations, of ($0.008) in 2007, ($0.005 in 2006 and
($0.012) in 2005) has been calculated using a weighted average number of shares of 477,930,290 (423,838,628 for
2006 and 313,565,142 for 2005).

The funds raised were used to finance exploration activities at Nama and Rooipoort, to fund the holding costs at
Barbrook and Eersteling Mine and to provide working capital for Greenstone Management Services. Capital projects
at Blanket Mine were funded from internally generated funds.

The Corporation had related party transactions with several of the Corporation's Directors relating to their
compensation and members of the President's family in fiscal years 2007, 2006 and 2005.  They are detailed in Note
10 to the Corporation's December 31, 2007 audited financial statements. It is expected that related party
transactions of a similar nature will continue during the current fiscal year of the Corporation.

7. OPERATIONAL REVIEW AND RESULTS OF OPERATIONS

The plans for the non-revenue generating exploration projects continue to be determined by the availability of
funds and are more fully described below.

7.1 Gold Production Blanket Mine - Zimbabwe

Safety, Health and Environment

 - The mine recorded four lost time injuries, including one fatality, and four restricted work activity cases
during the period. This is compared to the same period in 2006 which recorded three lost time and 7 restricted
work activity cases. With the exception of the single fatality, the reduction in incidents in restricted work
activity cases was attributable to the intensive safety training undertaken under the National Occupational Safety
Association ("NOSA").

 - An occupational health centre has been established and all employees were screened for occupational ailments.
There were no occupational health illnesses detected during the year.
HIV/AIDS continues to be an area of concern and management has put in place awareness programs to educate workers.
The prevalence of medical retirees is increasing due to the HIV/AIDS pandemic.

The Mine continues to monitor the ground water in the ground-water pumping wells downstream of the tailings
impoundment. Results continue to be well within the Governmental Environmental Management Agent ("EMA") minimum
levels. Re-grassing of the slopes on Dam B was undertaken and is ongoing. As a result of management's continuing
efforts to improve pollution control measures at Blanket Mine, the EMA has now upgraded the slimes dam from the
red to the yellow category and management intends to strive for achievement of the highest ("green") safety
category.

Capital Projects
Number 4 Shaft Expansion Project
Projects at Blanket focused mainly on the expansion program which involved the upgrading of the No. 4 shaft and
the crushing/milling section of the plant. Shaft equipping of the No. 4 shaft continued throughout the year and
was completed at the end of October. Work remaining to complete the shaft upgrade includes the equipping of
loading and ore bin arrangements at the shaft bottom as well as the installation of a crusher and conveyor system
to reduce the size of the ore prior to hoisting.

This expansion project is designed to facilitate the increase in underground production from the current 600
tonnes per day ("tpd") to 1,000 tpd. This should enable the total gold recovered to increase from 25,000 oz to
40,000 oz per annum.

Operations
Contrary to the project plan, Blanket suffered a prolonged unplanned No4 shaft closure from February to the end of
July which was beyond Management's control and was due mainly to a lack of power supply and severely restricted
foreign currency receipts from the RBZ. During July, production was halted and the mine put on care and
maintenance to save costs as the high grade sands being processed during this period were depleted and the
contractor cost of transporting the sands to the plant escalated to an uneconomic level. In order to gain rapid
access to the new mid-shaft loading bins underground, the decision was taken to speed up equipping of the No. 4
shaft by operating around the clock when power availability allowed. This decision paid some dividends, as Blanket
was able to partially commission the No. 4 shaft to haul from 14 level at the end of July, thereby allowing the
resumption of some underground operations building up to the planned production level of up to 600 tonnes per day.
However recurring power outages continued to cause major disruptions to the final quarter operations, but these
were eventually resolved by the mine undertaking to pay the Zimbabwe Electricity Supply Authority ("ZESA") in
foreign currency for its power supply. Absenteeism, power supply problems, and the consistent withholding of
foreign currency by the RBZ so severely limited Blanket's ability to restore production to the 600 tpd level that
it was unachievable. The RBZ controls all foreign currency needed by Blanket which includes US Dollars from gold
sales proceeds and payments to ZESA and certain suppliers, and also South African Rand required for certain
supplier payments.  Gold production has averaged 1,000 ounces per month since underground mining operations were
resumed in July 2007 compared to the pre-shaft expansion target of 2,100 ounces per month.

Frequent power disruptions during the last two quarters of the year allowed the shafts and metallurgical plant to
operate for only 86% of the available time, processing 100,082 tonnes instead of a forecast 178,000 tonnes. Both
the nearly completed No. 4 shaft expansion and the plant are currently running well although foreign currency
shortages are beginning to affect the plant availability, in particular the crushing and screening plant and the
carbon in leach (C.I.L) sections due to the inability to purchase critical wear parts due to the foreign currency
delays. Discussions are ongoing with RBZ to try to improve the receipt of US Dollars for gold delivered.

Production results for year to December 2007               2008
                                                2007 Jan.- Feb.

Ore mined                             tonnes 100,082     17,165
Development advance (ROM)             meters     669         85
Development advance (Capital)         meters     504         26
Ore milled                            Tonnes 100,082     17,285
Ore Gold Grade milled            grams/tonne    3.58       3.51
Ore - Gold Recovered                  ounces   9,885      1,719
Sands Processed                       tonnes 125,137          -
Sands Grade                      grams/tonne    1.29          -
Sands Gold Recovered                  ounces   3,414          -
Gold produced                         ounces  13,299      1,719
Gold Sold                             ounces  13,985      1,876

Outlook
The aims and objectives of Blanket Mine for 2008, subject to the return of reliable payment procedures for gold
sales proceeds by the RBZ, are:  - To complete the No. 4 shaft project in order to realize the planned increase in
ore production to 1,000 tonnes per day and gold production to 3,330 ounces of gold per month.

 - To intensify underground development initiatives in order to open up sufficient reserves to sustain the planned
increase in ore production.

 - To explore ways of controlling input costs in a hyperinflationary environment (such as off-shore purchasing).

 - To explore ways of retaining key staff in a hyperinflationary economy.

 - To formulate a development strategy for the exploration properties in the Gwanda Greenstone Belt. - To focus
employee and management attention and effort on issues of safety, health and environment.

 - To focus on off-mine exploration to supply additional ore to the plant

7.2 Exploration and Project Development COBALT AND BASE METALS
Nama Cobalt Project - Zambia

Property
Caledonia Nama Limited ("Nama"), a wholly owned subsidiary of the Corporation, holds a Retention License in
northern Zambia on which near-surface cobalt/copper mineralization has been discovered. This area lies immediately
northwest of the operating Konkola Copper mine and adjoins the extensive land holdings of Teal Mining and
Exploration Limited.  This Retention License covers an area of 80,625 hectares and is valid for two years.

Work Completed
The 2001/2002 soil sampling program carried out jointly by Nama and BHP Billiton was completed over the remainder
of the original license areas not covered by Nama in its 1995 and 1996 soil sampling and drilling program. The
1995/1996 programs identified a number of high priority anomalous targets (anomalies A, B, C, D and E) within the
required geological setting. Reverse Circulation ("RC") drilling was carried out on anomalies A, B, C, and D to a
depth of at least 150 meters.  The 2001/2002 soil

sampling program results identified an additional 11 anomalous areas for further investigation including anomalies
F to P. These targets have not yet been followed up in the search for copper/cobalt oxide and sulphide bodies.

In the second quarter of 2004, a mini bulk sample of 30 tonnes was excavated at Nama A (Discovery) site and
underwent successful screening tests and heavy media/gravity separation tests in South Africa. Following
encouraging results, a further one tonne sample were sent for additional test work to fine tune the extraction
process for the cobalt oxide.

During 2006 metallurgical test work provided a metallurgical flow-sheet. Two further bulk samples were taken from
Anomaly A to enhance and refine the metallurgical processes and cost parameters for producing a marketable and
economically viable cobalt product.

In 2006/2007 a Technical Report, compliant with NI 43-101 was prepared for Anomaly A at Nama by Mr. David Grant,
C.Geol., FGS, Pr.Sci.Nat., an independent consultant who is the "Independent Qualified Person" for Nama's
resources as required by NI 43-101 of the Canadian Securities Administrators.

In his report, which has been filed on SEDAR and is available on the Corporation's website, Mr. Grant estimates
the Indicated Resources at Anomaly A as 43,656,000 tonnes grading 0.055% Co, 0.099% Cu and 0.011%Ni. Mr. Grant
subsequently re-evaluated the data for Anomaly C and prepared an update to the previous Technical Report which
included the following additional Indicated Resources for Anomaly C; 78,218,000 tonnes grading 0.043% Co, 0.012%
Cu and 0.019% Ni. The combined resource is therefore 121,874,000 tonnes grading 0.047% Co, 0.043% Cu and 0.016%
Ni. This second NI 43-101 report has been filed on Sedar and is available on the Corporation website.

Mr. Grant also states that Anomalies F through Q inclusive are worthy of further investigation.

Nama continued exploration on the Nama Retention License area during the 2007 field season. During the year $2,470
was spent on exploration consisting mainly of drilling diamond and reverse circulation holes. The results of the
exploration activities will be released as soon as available.

Diamond drill core holes were drilled for both geological and bulk density measurement purposes. Bulk density
measurements are required in order to determine ore volumes and tonnages for mining purposes with an acceptable
level of accuracy. The bulk density drill holes were sited so as to provide information of a geological nature in
critical areas and thereby provide the added benefit of improving the definition and understanding of the ore
bodies.

A total of 4,099 meters of Diamond drilling was completed during the 2007 exploration field season, and the
breakdown per anomaly area is as follows:

Anomaly Diamond   Drill Holes   Meters Drilled                          Comment
A                           7            1,769        Geological and assay data
A                           4              320   Bulk Density & Geological data
C                           3              770        Geological and assay data
C                           8              640   Bulk Density & Geological data
D                           6              600   Bulk Density & Geological data
Total                      28            4,099

A total of 5,560 meters of Reverse Circulation drilling was completed during the 2007 exploration season and the
breakdown per ore body area is as follows:

Anomaly RC   Drill Holes   Meters Drilled
A                      2              160
C                     23            1,309
D                     51            4,091
Total                 76            5,560

The earlier than usual onset of the rains in early November made it impossible to drill some outstanding areas of
Anomaly D and Anomaly Q which is a prominent but untested geochemical target. In order to obtain at least some
geological information on Anomaly Q in early 2008, a shallow pit and trench sampling program has been implemented.

The diamond drill core was logged and split on site prior to dispatch to an accredited analytical laboratory in
Kalulushi, Zambia for analysis of cobalt, copper, nickel and zinc, amongst others. Quality Control and Quality
Assurance control procedures were put in place to verify the accuracy of the drill core splitting and handling and
the laboratory results.

All assay data has been received and is currently being verified and consolidated into the project database. The
resource modelling and re-evaluation of the various anomalies is in progress and a revised independent Technical
Report compliant with NI 43-101 standards will be issued once this work is completed.

The metallurgical testing to establish the likely product specification of the cobalt hydroxide product has been
completed.  Based on this metallurgical test work the cobalt hydroxide specification has been discussed with, and
is acceptable, to the refiners who have signed purchase agreements for the cobalt hydroxide product.

Five year supply agreements have been finalized with four large Chinese refiners to supply a total of 51,560
tonnes of cobalt metal equivalent over a five year period commencing in 2009. Nerin China (Nanchang Engineering
and Research Institute of Nonferrous Metals) has been commissioned to produce a Feasibility Study in accordance
with the Regulations and Preparation Basis of a Project Feasibility Study Report for the Nonferrous Metals
Industry, and related Chinese specifications and standards.

During the year the Nama Environmental Impact Assessment (EIA) covering the new access road and power line routes
to the proposed Nama Plant Site was completed, and has been submitted to the Environmental Council of Zambia for
their final approval. This EIA study is currently being expanded to cover the anticipated future mining operations
at Nama.

Rooipoort PGE/Ni/Cu Project (including Grasvally) - South Africa

Property
In 2002, Eersteling Gold Mining Company Limited ("EGM") acquired the Rooipoort property, containing platinum group
elements (PGE), nickel (Ni) and copper (Cu), from Rustenburg Platinum, owned by Anglo Platinum Limited. The
property is located approximately 30 km southwest of the Eersteling Gold Mine property in an area that is
presently undergoing a surge in platinum group metal exploration along a well-mineralized feature known as the
"Platreef".  An additional 342 hectares on the farm Grasvally, immediately adjacent to, and south of, the
Rooipoort property was optioned in 2004, and over which the Company was granted a New Order Prospecting Right in
May 2005 (3 year period). A further 43 hectare portion was granted in April 2006 (5 year period).

Application for conversion of the Rooipoort property into a New Order Right in terms of the Mineral and Petroleum
Development Act ("MPRDA") was granted in November 2006.

In March 2006, the Company concluded an agreement, with Falconbridge Ventures of Africa (Pty) Ltd ("Falconbridge")
to acquire a 100% interest in Falconbridge's prospecting rights covering a total area of 4,315.81 hectares
contiguous with the Rooipoort property which effectively doubles the area of the Rooipoort Project property
underlain by Bushveld Complex rocks with PGE potential. The Falconbridge properties were granted New Order
Prospecting Rights in April 2006 (3,099 hectares, for a period of 5 years) and September 2006 (1,217 hectares, for
a period of 5 years). The total area of EGM's New Order Prospecting Rights in the Rooipoort PGE/Ni/Cu properties
is now 8473.39 hectares.

EGM's rights to the Rooipoort Project, together with the Falconbridge agreement are in the process of being
transferred to Maid O' The Mist (Pty) Ltd, a 100% South African registered subsidiary of the Corporation.

Exploration
To date, the Company has diamond-drilled a total of 18,450 meters in 54 holes on the Rooipoort PGE/Ni/Cu
Exploration Project. This drilling covers the full 6 km strike length that makes up the project area.

Falconbridge drilled a total of 7,393 meters in 22 holes on the portions of Grasvally and the farms Jaagbaan and
Moorddrift that comprise most of the property purchased from Falconbridge.

At the end of 2004, very preliminary, flotation amenability test work was performed at the SGS Lakefield
laboratories in Johannesburg, South Africa on mineralized composite samples from 5 lithological units prepared
from the early diamond drill-hole cores to verify the flotation amenability of the ore. The tests included milling
and basic flotation to produce a flotation concentrate. The tests indicated that from each of the five mineralized
zones, a re-cleaner flotation concentrate of low mass recovery can be produced that contains medium to high
recovery of platinum, palladium, gold, copper and nickel. This initial test work indicates that a relatively
simple metallurgical process route could possibly produce a flotation concentrate from high-tonnage, low-grade
feed material.

In September 2005, an independent resource estimate was calculated and incorporated into a NI 43-101 -compliant
report by RSG Global of Australia. The results of this estimate are:

Inferred Resource: At 0.5g/t 2PGE+Au and 200m below surface (900m base)

Zone Average True      Tonnes 2PGE+Au    Pt    Pd    Au    Ni   Cu
         Width (m)               (g/t) (g/t) (g/t) (g/t)
M2            1.8  12,791,200    1.34  0.42  0.83  0.10  0.20 0.12
L3            1.3   5,337,154    1.15  0.59  0.51  0.05  0.15 0.10

The resource estimate is the work of Dr. Julian Verbeek supported by Mr. Ken Lomberg, both of RSG Global.

During 2007, field work consisting of geochemical sampling was conducted over the land acquired from Falconbridge.
A total of 37.37 line kilometers was sampled during this phase of the work and 1500 samples submitted for assay
for Ni, Cu and PGMs. Based on the results of this sampling, the drilling program for the coming 2008 drilling
season will be laid out.

Maps and drill logs for the Rooipoort PGE/Ni/Cu Exploration Project shown on the Corporation's website provide an
overview of the exploration activity that has been carried out on the Rooipoort property. The Project Status
Report and the full RSG NI 43-101 Technical Report are available on the Corporation's website. As a result of the
work done to date, additional target areas have been identified on the west and north-west of the property, and
these are identified in the Project Status Report on the website.

Discussions with a suitable Joint Venture partner regarding a "farming-in" arrangement are currently underway.
GOLD

Zimbabwe Exploration - Gold
The Corporation's exploration activities in Zimbabwe are conducted by the Blanket Mine's exploration department.
Blanket'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 a total area of 2,500 hectares. 47 claims of
these claims are registered as precious metal (gold) blocks covering 415 hectares and 31 claims were pegged and
are registered as base metal (Cu, Ni, As) blocks covering a total area of 2,085hectares

Blanket's efforts were focused in certain key areas in the Gwanda Greenstone Belt (that are within trucking
distance of the Blanket plant) such as GG and Mbudzane where it is believed there is the greatest chance of
success. A drilling program initiated in late 2005 to probe for down-dip and strike extension mineralization
associated with the GG prospect was continued into 2007 with 281 meters of drilling completed. The assay results
establish the presence of two zones of potentially economic gold mineralization. The main

exploration activities involved diamond core drilling and the development of a prospect shaft down to the first
level aimed at exposing the ore body and providing a bulk sample for metallurgical testing.

The Bubi Greenstone Belt ground holding portfolio comprises a total of 27 base metal claims covering a combined
total area of 2,820 hectares. Reconnaissance exploration work by soil, sampling and geological mapping has been
completed in all the claims areas. In 2008 the focus will mainly be directed to conduct additional follow-up work
to define drill targets on potentially prospective metal-in-soil anomalies so far identified in the area. The work
in the Sandy Claims constitutes part of this detailed follow-up exploration work.

During the first quarter of 2008, and assuming the availability of funds, Blanket's exploration focus is centered
on the Gwanda area with the main emphasis being delineation of a potentially economic ore resource at the GG
prospect and Mbudzane. At GG, this will be achieved through continued core drilling from the surface to establish
the strike extent of established economic mineralization as well as by deepening the prospect shaft and extending
underground development. At Mbudzane, a second phase core-drilling program has been planned to follow up on
several highly prospective deep seated IP-anomalies generated in 2006.

In addition, Blanket is conducting basic reconnaissance exploration work on the Bunny's Luck claims, the target
being to determine the potential strike length of a 1m to 1.5m wide shear zone hosted quartz vein so far mapped
over a strike length of 300m. Blanket needs to formulate a development strategy for its outside properties in the
Gwanda area, in particular, and elsewhere in general, in order to prevent forfeiture under the current
indigenization proposals.

DIAMONDS

Kikerk Lake - Canada
The Kikerk Lake property consists of 5 mineral leases covering 12,912.5 acres (5,225.5 hectares). In 2001 and
2002, the Corporation announced the discovery of two diamondiferous kimberlites, "Potentilla" and "Stellaria", on
the Kikerk Lake property in Nunavut Canada, by its joint venture partner and operator of the property, Ashton
Mining of Canada Inc. ("Ashton"), a wholly owned subsidiary of Stornoway Diamond Corporation ("Stornoway").  The
two kimberlite pipes are approximately 700 meters apart.  In 2005, Ashton collected 108 heavy mineral samples to
follow up on previous anomalous results. These samples were sent to Ashton's laboratory and results were received
in the first quarter of 2007.

Ashton reported that approximately 24 line-kilometers of ground magnetic survey were conducted over a structural
trend line, but there were no new magnetic features noted that would be indicative of kimberlite emplacement.

Four diamond drill holes, totaling 382 meters were drilled to test the Stellaria kimberlite and a possible source
of kimberlite indicator minerals east of Stellaria. Results confirm that the Stellaria body has a steep dip to the
north-west and limited width.

The Corporation's 17.5% share of this program is funded by Ashton.  Ashton holds a 52.5% interest, having incurred
in excess of $750,000 in exploration expenditures on the property. This interest can be increased to 59.5% if
Ashton funds the Corporation's share of the costs through to a completed feasibility study.  The remaining 30%
interest is held by Stornoway.  Recently Stornoway has amalgamated with Ashton.

Due to a lack of recent activity on this joint venture the carrying value of $750,000 has been written off.

Mulonga Plain - Zambia
Work Completed
Motapa Diamonds has given the Corporation notice that it intends withdrawing from the joint venture and intends to
transfer all rights in and title to the properties to the Corporation for a nominal amount.

The Corporation has applied for a retention license over the properties managed under the joint venture.

The Mulonga Plain License area is located in Western Zambia, between the Zambezi River and the Angolan border. The
Company has identified discrete areas within the license area. An airborne gravity survey was completed on the
easternmost of these in late 2004.

Ten, out of an original eleven, airborne gravity and magnetic targets were drill tested during 2005 and one hole
was abandoned due to poor drilling conditions. Basalt basement was intersected in each of the holes at depths
ranging from 87 meters to 173 meters with no kimberlite intercepts reported from any of the holes. Motapa has
defined four prospective regions within the extensive Mulonga Plain anomaly through prior heavy mineral sampling,
airborne magnetics and reconnaissance drilling.  The 2005 drill program was designed to test the easternmost of
these prospective regions and followed on from completion and interpretation of an airborne gravity survey in late
2004.  A Falcon airborne survey was flown and the results interpreted in 2006.

Commenting on the 2005 results, Motapa's CEO Dr. Larry Ott noted: "The extensive Mulonga Plain diamond and
kimberlite indicator mineral anomaly remains highly prospective for discovery. This program has provided an
initial drill test of one of four well defined indicator mineral dispersions. The remaining three areas, in the
central and western portions of the Mulonga Plain remain essentially untested and results of this program should
add considerably to our understanding of kimberlite indicator mineral dispersion within the Mulonga Plain and
better constrain likely source kimberlite areas." No further work was carried out in 2006 and 2007 as Motapa
prioritized other areas of their property portfolio over Mulonga.

Kashiji Plain - Zambia
This license area is located in northwest Zambia, adjacent to the Angolan border. Prior work by Motapa has
recovered 22 micro diamonds in association with numerous kimberlitic ilmenites.  Work in 2005 focused on
interpretation of results from the field work of 2004 in two discrete areas of anomalous kimberlite indicator
mineral and diamond recoveries. No further field work was carried out on the Kashiji or Lukulu licenses in 2006
and 2007. This license is due to expire in June 2008, however as stated above the Corporation has also applied for
retention licenses covering the Kashiji and Lukulu areas.

Goedgevonden - South Africa
The Corporation holds prospecting rights over the Goedgevonden diamond bearing kimberlite pipe and surrounding
area. This property is located approximately 20km north of the Stilfontein gold mine in the Klerksdorp district of
the North West Province in South Africa and 200km south west of Johannesburg.

In April 2005 an application for conversion of these rights was submitted in terms of the Mineral and Petroleum
Resources Development Act ("MPRDA") and the rights were granted in December 2006. An additional application for
New Order Prospecting rights was submitted over an adjoining farm, Eleazar in June 2005. It is expected that this
application will be granted shortly as soon as documentary proof of BEE participation has been presented.

Previous prospecting activities carried out in the mid 1970's on Goedgevonden indicate that the pipe is oval in
shape and covers a surface area of approximately 0.27 hectares. This work also confirms that the pipe was drill
intersected at a depth of 425 meters, and that further down-dip extensions remain undefined. Previous drilling
reported an average diamond content of 35 to 45 carats per hundred tonnes of material ("cpht"), with one hole
yielding 65 cpht.  The Corporation has not completed the work necessary to estimate a resource in terms of NI 43-
101 for the Goedgevonden property.

A preliminary drilling program conducted in 2002 consisted of 7", 8" and 12" diameter reverse circulation drill
holes, followed by the collection of the drill samples and diamond recovery. Four holes were drilled in the centre
of the pipe, three to a depth of 150 meters, and the other to 120 meters. The three remaining holes were drilled
to delineate the pipe in more detail. All of the seven holes drilled entered the kimberlite at a depth of about 6
meters, and the four centrally-located holes were stopped whilst still in the kimberlite. A total of about 56
tonnes of drilling sample was collected and processed through a Van Eck and Lurie

dense-media separation ("DMS") plant and wet Sortex machine. From the diamond recoveries it was confirmed that the
Goedgevonden pipe was diamondiferous, and sufficient gem-quality diamonds were recovered to warrant a larger bulk
sample. Geological interpretive work as well as detailed ground gravity and magnetometer surveys were completed
during 2003 but there was no further exploration activity on this property as corporate resources were
concentrated on the Corporation's other projects which were considered to be of higher priority in adding
shareholder value.

Granting of the New Order Prospecting Rights (not yet signed) gives the Company security of tenure. Discussions
are in progress with other parties with a view to realizing value by joint venture or disposal of the properties
in the Goedgevonden Diamond Project.

Outlook
The outlook for the aforementioned exploration properties, except for Nama,is difficult to quantify. Exploration
by its nature is speculative with a high degree of risk accompanied by the potential for high returns. The
Corporation manages this risk by using well-qualified exploration professionals, senior mining company joint
venture partners and by exploring in areas which are considered as having a better than average potential for
discovery.  The recent increases in the prices of precious and base metals should improve exploration expenditures
of the major mining companies and could improve the likelihood of the Corporation negotiating joint venture
agreements for its remaining wholly-owned exploration properties.

The Corporation intends to continue to focus its exploration activities of prospective properties by developing
the properties through strategic alliances where possible with senior mining companies and metal producers.

In terms of the South Africa Minerals and Petroleum Resources Development Act (No 28 of 2002) ("MPRDA") and
implemented May 1, 2004, all "old order" mineral rights in South Africa are required to be converted to "new
order" rights, by a process of re-applying for these rights. Holders of all inactive prospecting and mining rights
(immediately preceding May 1, 2004) were required to apply for conversion by April 30, 2005. Active prospecting
right conversion applications closed on April 30, 2006 and active mining right conversions close on April 30,
2009.

Apart from various technical requirements for conversion, the new legislation requires that companies give
attention to the requirements of the MPRDA as defined in Section 2(d) as well the Mining Charter as "substantially
and meaningfully expand opportunities for historically disadvantaged persons, including women, to enter the
mineral and petroleum industries and to benefit from the exploitation of the nation's mineral and petroleum
resources.  The Mining Charter was formulated in negotiations between the government, the mining industry as
largely represented by the Chamber of Mines of South Africa, and organized labour.

The Mining Charter seeks to address the implementation of section 2(d) in practical and measurable terms. Lack of
clarity as to the status of prospecting under the Mining Charter has led to considerable debate and confusion in
terms of the ability of companies involved in early stage prospecting work to meet or even indicate their
commitment to meeting the terms of the Mining Charter, even before any sort of mineral resource has been
established. This in part has been the cause of considerable delays in processing of the thousands of applications
submitted as part of this process. However, there has recently been an apparent relaxing of the attitude of the
South African authorities in respect of New Order Prospecting Rights and many companies, including the Corporation
have received these new rights in recent months.

The Zimbabwe economy continues to be depressed and inflation is rampant. The survival of the mining industry is a
high priority of the Government as its ability to generate foreign currency is of paramount importance.
Management's focus is to complete the No 4 shaft expansion and to bring production up to the 1000 tpd level. Cash
flow management is critical to ensure the mining operations are protected, as much as possible,  from the effects
of local inflation by the utilization of foreign currency proceeds to fund operations. Management is also
continuing with exploration in the areas near the Blanket mine to enable Blanket to expand its operation should
economic improvements in Zimbabwe occur.

The President of the Republic of Zimbabwe brought the Indigenisation and Economic Empowerment Act into law through
decree in March 2008. The law seeks to ensure that a majority stake (at least 51%) in all companies is held by
Indigenous Zimbabweans. Additionally the Mines and Minerals Amendment Bill was presented before the closure of the
last session of Parliament but not passed into law, and has thus lapsed. The Mines and Minerals Amendment Bill if
enacted into law also seeks to ensure among other things that a majority stake is held in all mining companies by
either indigenous Zimbabweans or the Government of Zimbabwe. Whilst neither the two pieces of legislation allow
for compulsory acquisition, the Mines and Minerals Amendment Bill did provide for severe penalties in the form of
extremely prohibitive taxes and potential withdrawal of mineral rights in the event of non voluntary compliance
within certain time frames.

The Zambian government has announced the following proposed changes to their tax laws that will have a bearing on
the Nama cobalt project if passed into law. The key changes are:

 - Increase in mineral royalty from 0.6% to 3% 
 - Increase in profit tax rate from 25% to 30%
 - Introduction of variable profits tax of 15% for net profits above 8% 
 - Introduction of a windfall profit tax for copper mines 
 - Capital allowances reduced from 100% to 25%

These measures have been highly controversial with mining companies, many of which invested in the country under
specific tax incentives and formalised their business models accordingly. Some mining companies are threatening
legal recourse as they argue their businesses will become unviable. Proposed capital expenditure projects are
being reconsidered. Various representations have been made by the mining companies through the Chamber of Mines to
the government since the budget announcement at the end of January, however the government has taken a firm
position, and we understand that the changes have been approved by parliament.

8. ENVIRONMENTAL POLICY

The Corporation is committed to maintain 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. The
Corporation and its subsidiaries operate under the Corporation's Environmental Policy that encompasses the
following:  - The Corporation directs its employees and its subsidiary companies to conduct their exploration and
operations activities in a professional, environmentally responsible manner, in compliance with all applicable
legislation and policies in the jurisdictions in which they undertake business.

 - The Corporation liaises closely with the applicable government regulatory bodies and the public to optimize
communication and an understanding of the Corporation's activities in relation to environmental protection.

 - The Corporation is committed to the diligent application of technically proven, economically feasible,
environmental protection measures throughout its exploration, development, mining, processing and decommissioning
activities.

 - The Corporation on a regular ongoing basis monitors its environmental protection management programs to ensure
their compliance with the applicable regulatory requirements.

It is the responsibility of all the employees of the Corporation and its subsidiaries to carry out their
employment activities in accordance with this code of practice. Operational line management has the direct
responsibility for regular environmental protection management.

9. SUMMARY OF QUARTERLY RESULTS - (C$ 000's - except per share amounts.)

The following information is provided for each of the 8 most recently completed quarters of the Corporation -
ending on the dates specified - in thousands of Canadian dollars. The figures are extracted from underlying
financial statements that have been prepared according to Canadian GAAP.

                  Dec     Sept     June      Mar      Dec     Sept     June      Mar
                31/07    30/07    30/07    30/07    31/06    30/06    30/06    30/06
Sales before
discontinued    3,231    1,950    1,539    3,319    9,044    4,539        1        1
operations
Income/(loss)
before
discontinued      494     (855)     364   (3,909)   3,841     (455)    (683)    (388)
operations
-- per share
undiluted       0.001   (0.002)   0.001   (0.009)   0.008   (0.001)  (0.002)  (0.001)
- per share
Diluted         0.001   (0.002)   0.001   (0.009)   0.008   (0.001)  (0.002)  (0.001)
Discontinued
operations       (249)     (80)    (126)    (254)  (1,283)  (2,619)  (2,210)  (1,878)
(loss)
Net Income/
(loss) after
discontinued      245     (935)     238   (4,163)   2,558   (3,074)  (2,893)  (2,266)
operations
- per share     0.001   (0.002)  0.0005   (0.008)   0.006   (0.007)  (0.007)  (0.006)
undiluted
- per share     0.001   (0.002)  0.0005   (0.008)   0.006   (0.007)  (0.007)  (0.006)
Diluted
No of shares  487,869  487,869  487,869  457,981  457,981  455,209  398,142  380,714
basic '000
No of shares  487,975   488,61  489,454  457,981  458,087  455,951  403,055  381,663
diluted '000

The discontinued operation relates to Barbrook and Eersteling Mines. Barbrook Mine was operational during the
first three quarters of 2006. All foreign exchange gains or losses are reported in the results before discontinued
operations.  The gold sales at Blanket Mine were 4,352 ounces in the first quarter, 2,858 ounces in the second
quarter, 2,263 ounces in the third quarter and 4,512 ounces in the fourth quarter. Production at Blanket Mine was
affected from February 2007 to July 2007 when underground operations were halted. Included in the loss before
discontinued operations are the unrealized foreign exchange gains or (losses) of $456,000 in the fourth quarter,
($1,016,000) in the third quarter, ($707,000) in the second quarter and $255,000 in the first quarter.

Note: The effect of the dilution on the earnings per share has been calculated only for each quarter of 2006 as
income was earned before discontinued operations for the year. No calculation for 2007 or 2005 was made as the
result for the years was a loss and the diluted earnings per share would be anti-dilutive.

10. INVESTING

During 2007 the Corporation invested $3,250,000 in capital assets and mineral properties ($3,579,000 in 2006 and
$5,284,000 in 2005). Of the amount invested in 2007 $2,470,000 was spent at Nama, $616,000 at Blanket Mine, and
$141,000 at Rooipoort.

11. FINANCING

During the year $4,380,000 was raised from private placements, and the exercise of warrants and options
($7,559,000 in 2006 and $6,588,000 in 2005) all net of issue costs. In all 22,888,259 shares were issued when an
equal number of warrants were exercised (2006- 87,265,885 common shares) The funds were used to finance
exploration activity on the Corporation's most prospective projects and on other working capital requirements.

12. LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2007, the Corporation had a working capital surplus of $65,000 (surplus of $2,874,000 at
December 31, 2006 and a deficit of $325,000 at December 31, 2005). Current assets of $4,408,000 ($8,773,000 -
2006) reduced mainly due to lower inventory levels at Blanket Mine while the US dollar amount owed by RBZ
increased due to late payment for gold sales. During the first quarter of 2008 the US dollar amount owed by the
RBZ has increased from $1,780,000 at the 2007 year end to $2,500,000 in mid March despite having received $325,000
in payments. Details of financing activities are presented in note 5 (b) of the notes to the consolidated
financial statements. During 2008, it is expected that the cash requirements of the Corporation will be met from
the proceeds of the sale of Barbrook Mine and Eersteling Gold Mine and gold sales from Blanket Mine.

Anticipated cash inflows in 2008 will be used mainly by the Corporation on its exploration, development and
production activities such as:

- at Blanket Mine (internally generated) for the completion of the No 4 shaft expansion  

- at an estimated cost of $750,000 to regain the 600 tpd ore delivery to the plant and an amount of $1,500,000 to reach the expanded rate of 1,000 tpd ore delivery.

 - the defined activities at the Corporation's Nama Cobalt/Copper Project at an estimated cost of $ 4,000,000

 - at Rooipoort and the other exploration of the South African PGE & Ni properties at an estimated cost of
$1,250,000.

 - corporate working capital

The funds raised will be sufficient to move forward with the direct development of the above assets if the
projects are proven to be economically and technically justified.  Notwithstanding the estimated expenditure
amounts for each of the programs described above, the Corporation cannot predict the actual amounts that will be
spent on those programs. It can be stated that the projects with top priority are the development of Nama, the
installation of the 20 tpd metallurgical optimization testing plant at Nama, and the No. 4 shaft expansion project
at Blanket Mine. Decisions will be made to go ahead on the programs from time to time by Management as they, at
that time, determine appropriate, based on results received in previous programs and funding available.

The Corporation does not have any significant long-term contractual obligations or commercial commitments other
than the payment of its current liabilities and its four cobalt sales agreements. It had two joint venture
agreements with Ashton Mining of Canada Inc. and Motapa Diamonds Inc., in each case these partners were
responsible for all property expenditures until a feasibility study has been completed. The Corporation has minor
obligations in respect of licence fees for its exploration and mining properties some of which are paid in full by
the Corporation's joint venture partners. Now that Motapa wishes to withdraw from its JV on Mulonga Plain, the
Corporation will be responsible for maintaining the Licences. As of December 31, 2007 the Corporation had
potential/contingent liabilities to do rehabilitation work on the Blanket, Barbrook and Eersteling Mines - if and
when those Mines are permanently closed - at an estimated cost of $1,043,000. With the proposed sales of the
Barbrook and Eersteling Mines, these obligations will pass on to the new owners.

13. OFF-BALANCE SHEET ARRANGEMENTS

There are no off balance sheet arrangements.

14. FOURTH QUARTER

The operating results for the fourth quarter reflect the mining activity at Blanket Mine which sold 4,512 ounces
of gold. The Corporation generated revenue of $3,231,000 and an operating income of $1,020,000 after expenses of
$525,000 a net income after tax of $493,000 was realized. Included in the expenses was unrealized income from
foreign currency of $456,000. Discontinued operations loss of $249,000 is made up of holding costs at Barbrook and
Eersteling comprising of minimum charges for electricity, limited managerial employment costs, and ongoing
security costs to safeguard the property and interest accrual on outstanding creditors of $145,000. As Barbrook
and Eersteling mines were on care and maintenance no amortization charge was provided for on plant and equipment
but $25,000 was provided for on vehicles and computer equipment.

The RBZ held the official exchange rate at Z$30,000:USD1 for the whole quarter and did not alter the exchange rate
during the monetary policy announcement during the first quarter of 2008.

15. CRITICAL ACCOUNTING POLICIES

There are two major areas where accounting estimates are made, asset impairment and asset retirement obligation.
As significant impairment provisions have already been made against the 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 the Corporation. Based on indicative purchase offers made for Barbrook and Eersteling
Mines no further asset impairment has been made against these assets. The asset retirement obligation is also
considered to be estimated with a reasonable degree of certainty, although the original estimation was calculated
some years ago. The estimation is accreted annually at 5% and thus any change in circumstances is considered
unlikely to have a material impact on the results of the Corporation or its operations.
The following are the changes to accounting policies adopted during 2007:

i) Financial Instruments

Recognition and Measurement Section 3855, Disclosure and Presentation Section 3861.These standard set out criteria
for the recognition, measurement, disclosure and presentation of financial instruments for fiscal years beginning
on or after October 1, 2006. This standard requires all financial instruments within its scope, including
derivatives, to be included on a Company's balance sheet and measured either at fair value or, in certain
circumstances when fair value may not be considered most relevant, at cost or amortized cost. Changes in fair
value are to be recognized in the statements of operations and comprehensive income.

All financial assets and liabilities are recognized when the entity becomes a party to the contract creating the
item. As such, any of the Company's outstanding financial assets and liabilities at the effective date of adoption
are recognized and measured in accordance with the new requirements as if these requirements had always been in
effect. Any changes to the fair values of assets and liabilities prior to October 1, 2006 are recognized by
adjusting opening deficit or opening accumulated other comprehensive income.

All financial instruments are classified into one of the following five categories: held for trading, held-to-
maturity, loans and receivables, available-for-sale financial assets, or other financial liabilities. Initial and
subsequent measurement and recognition of changes in the value of financial instruments depends on their initial
classification.

The various assets and liabilities were classified as follows on adoption:

1. Cash and cash equivalents are classified as "assets held for trading". They are stated at fair value and any
gains/losses arising on revaluation at the end of each period are included in the statement of operations. We have
no derivative financial instruments that would have been classified on a similar basis.
2. Investments are classified as "assets available for sale". They were previously presented at cost but will now
be presented at fair value and the gains/losses arising from their revaluation at the end of each quarter will be
included in other comprehensive income. When a decline in fair value is other than temporary, the accumulated loss
that had been recognized directly in other comprehensive income is removed from accumulated other comprehensive
income and recognized in net income even though the financial asset has not been derecognized.
3. Trade receivables are classified under "loans and receivables". They are recorded at their original cost which
is deemed their fair value at that time. Subsequent measurement will be at amortized cost using the effective
interest rate method.
4. Bank overdraft is classified as a "financial liability held for trading" as there is a contractual obligation
to deliver cash. It is measured at fair value which is book value plus accrued interest. It is stated at fair
value and any gains/losses arising on revaluation at the end of each period are included in the statement of
operations.
5. Accounts payable and accrued liabilities and long term debt are classified under "other financial liabilities".
They are recorded at their fair value at that time. Subsequent measurement will be at amortized cost using the
effective interest rate method.

Unless otherwise noted, it is the opinion of management that the Company is not exposed to significant interest
rate or credit risks arising from its financial instruments. A significant portion of the Company's assets and
liabilities are denominated in South African rand and Zimbabwe dollars.  Management do not consider that the
fluctuation of the value of the South African Rand to the Canadian Dollar could have a significant impact on the
results of operations. Blanket Mine operation is subject to a hyperinflationary environment in Zimbabwe, foreign
creditors are denominated in Rands and local costs increase with inflation. As the official exchange rate is fixed
and the effective buying power of the Zimbabwe Dollar decreases accordingly there could be a significant impact on
the results of the operations. The shareholder loan account in Zimbabwe is denominated in US Dollars and will
generate foreign exchange losses for Blanket Mine in Zimbabwe Dollar terms but the effect on the consolidated
financial statements in Canadian Dollars is unlikely to be significant. The fair values of these financial
instruments approximate their carrying values, unless otherwise noted. The Company does not use any derivative
instruments to reduce its foreign currency risks.

Below is a summary of the cash or near cash items denominated in a currency other than the Canadian dollar that
would be affected by changes in exchanges rates relative to the Canadian dollar. All values are in thousands.

                         US     Zimbabwe  SA Rand
                    Dollars      Dollars
Cash                    470 (179,738,803)     331
Accounts Receivable   1,780   79,027,980      986
Accounts Payable             195,488,055   10,830

ii) Comprehensive Income (CICA Handbook Section 1530)

Comprehensive income is the change in shareholders' equity during a period from transaction and other events from
non-owner sources. This standard requires certain gains and losses that would otherwise be recorded as part of the
net income/(loss) to be presented in other "comprehensive income" until it is considered appropriate to recognize
into net income/(loss). This standard requires the presentation of comprehensive income and its components in a
separate financial statement that is displayed with the same prominence as the other consolidated financial
statements. Accordingly, the Company now reports a Statement of Operations and Comprehensive Income and a
Statement of Shareholder's Equity which

includes the account "accumulated other comprehensive income" in the shareholder's equity section of the
consolidated balance sheet.

The adoption of Sections 3855 and 1530 determines how the Company records its investment in Motapa Diamonds Inc.
and Old Mutual Plc which are now classified as financial instruments "available for sale" and thus recorded at
fair value. The adjustment to opening balance to recognize this was $31 and any further unrealized gains or losses
during the year are reported in the current period.

iii) Equity (Section 3251)

Along with the adoption of the above standards, the Company adopted CICA Handbook Section 3251, Equity, effective
from the beginning of the current fiscal year. This Standard establishes the presentation of equity and changes in
equity during the reported period. The Company now presents a Statement of Changes in Shareholders' Equity as part
of the annual consolidated financial statements.

iv) Foreign Currency Translation (Section 1651)

The Company maintains its accounts in Canadian dollars. The accounts of its foreign subsidiaries are maintained in
the local currency where the subsidiary is incorporated. The Corporations foreign subsidiaries are considered to
be integrated operations. Accordingly, the foreign operations are translated to Canadian dollars using the
temporal method. As such, monetary assets and liabilities are translated using the exchange rates in effect at the
consolidated balance sheet date and non-monetary assets and liabilities at historical exchange rates. Revenue and
expense items have been translated using the average exchange rate prevailing during the year. The gains and
losses resulting from changes in exchange rates are recognized in earnings.

v)  Accounting Changes (Section 1506)

This new section establishes criteria for changes in accounting policies along with the accounting treatment and
disclosures required upon adoption of the new accounting policies, estimates and corrections of errors. The
standard is applied prospectively for the Company's 2007 financial year. The adoption of this standard did not
have a material impact on our consolidated financial statements.

The following accounting policy changes will be adopted in the following financial year:

(i) Financial instruments and capital disclosure, Section 3862 and Section 1535 (ii) Financial instruments
presentation, Section 3863 (iii) Inventories, Section 3031 (iv) General standards of financial statement
presentation, Section 1400

These standards are effective for the Company for interim and annual consolidated financial statements beginning
on January 1, 2008 and the Company is currently evaluating the impact of the adoption of these new Sections on its
consolidated financial statements.

16. SECURITIES OUTSTANDING

As at March 31, 2008 the following securities were outstanding: (1) 500,169,280 common shares;

(2) Options and warrants as follows:

Number                        Description   Exercise Price                   Validity
33,038,000  Common share purchase options   Average $0.186 Various until May 11, 2016
12,300,000 Common share purchase warrants $           0.15     Until January 11, 2009

As the Corporation's Option Plan allows the granting of options on a number of shares equal to 10% of the issued
shares, the Corporation could grant options on 50,016,928 shares. As only 18,588,000 options are outstanding a
further 31,428,928 options are available to be granted.

17. CONTROLS

The CEO and CFO have evaluated the effectiveness of the Corporation's disclosure controls and procedures and
assessed the design of the Corporation's internal control over financial reporting as of December 31, 2007,
pursuant to the certification requirements of Multilateral Instrument 52-109. They confirm that the internal
control over financial reporting will prevent any material misstatement of the annual financial statements.

The Corporation has a Disclosure Committee consisting of four Directors and one Officer, 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's Directors and Management, and the Disclosure Committee, are
making all reasonable efforts to ensure that the Corporation's disclosures are made in full compliance with the
applicable rules and requirements. All reasonable efforts are also being made to ensure that the Corporation'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's Certifying Officers by
others within those entities.

18. FORWARD LOOKING STATEMENTS

This Management Discussion and Analysis contains certain forward-looking statements relating but not limited to
the Corporation's expectations, intentions, plans and beliefs. Forward-looking information can often be identified
by forward-looking words such as "anticipate", "believe", "expect", "goal", "plan", "intend", "estimate", "could",
"should", "may" and "will" 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.

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 numerous

assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that
the predictions, forecasts, projections and various future events will not occur. The Corporation 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.

19. QUALIFIED PERSON

James Johnstone, P.Eng., is a qualified person as defined by NI 43-101. Mr Johnstone is responsible for the
technical information provided on this MD&A except where otherwise stated. He was assisted by employees of the
Corporation who are qualified persons for the individual projects and, where appropriate, outside consultants
and/or qualified persons for joint-ventured projects.

20. BOARD AND SENIOR MANAGEMENT CHANGES

Dr. Trevor Pearton was appointed VP Exploration on February 15, 2008.

Mr Leigh A. Wilson was appointed as a non-executive Director of the Corporation and a member of the Audit
committee.

At the present time there is a worldwide shortage of senior mining industry professionals and the Corporation is
one of many companies looking for suitable staff. With the anticipated sale of the South African gold mines and
the planned expansion of the Zambian exploration, mining and metallurgical pilot plant programs the Corporation is
re-evaluating its requirements for replacement senior staff.

Caledonia Mining Corporation