Caledonia Installing a Standby Generator at Bla...

FOR:  CALEDONIA MINING CORPORATION

TSX SYMBOL:  CAL
OTC Bulletin Board SYMBOL:  CALVF
AIM SYMBOL:  CMCL

May 7, 2010

Caledonia Installing a Standby Generator at Blanket Gold Mine in Zimbabwe

TORONTO, ONTARIO--(Marketwire - May 7, 2010) - Caledonia Mining Corporation ("Caledonia")
(TSX:CAL)(OTCBB:CALVF)(AIM:CMCL) has taken immediate steps to address the significant worsening in
recent weeks of the electricity supply to its Blanket Gold Mine. Accordingly, it has ordered the first
of several planned 2.5MVA diesel generators. This first set is planned to be installed and
commissioned in early June 2010.

Blanket Gold Mine currently relies exclusively on a Zimbabwe Electricity Supply Authority 33kV
electricity supply to run all of its operations. In recent weeks, the continuity of electricity
supplies has deteriorated significantly: average daily power outages at Blanket have increased from
approximately 5 hours per day in February 2010 to over 9 hours per day in May. The increased
frequency, coupled with the unpredictabilty and duration of power outages has an adverse effect on
gold production, and also on the underground installations essential for the completion of the No. 4
Shaft Expansion Project.

In light of the rapid deterioration in electricity supply, Caledonia has decided to accelerate
Blanket's program to install sufficient diesel generating capacity to allow mining operations to
continue at the current rate of production during electricity outages. The first standby generator
will allow the continuous operation of the Four Shaft Winders to operate on production and the
installation works necessary to complete the No. 4 Shaft Expansion without interruption during
outages.

Blanket plans to install additional generators after completion of the No. 4 Project. These additional
generators will give Blanket sufficient standby generating capacity to maintain its target production
of 40,000 ounces of gold per annum even if the current level of electricity outages continues. This
situation will remain under review as circumstances relating to electricity supply change.

The cost of the standby generator will be met out of an increase in Blanket's existing US$1.25 million
debt facility which is in the process of being finalized.

Further information regarding Caledonia's exploration activities and operations along with its latest
financials may be found at www.caledoniamining.com.

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FOR FURTHER INFORMATION PLEASE CONTACT:

Caledonia Mining
Mark Learmonth
[phone]

OR

BuckBias
Alex Buck
[phone]

OR

RBC Capital Markets
Martin Eales
[phone]

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Caledonia Mining Corp