(CALEDONIA MINING CORPORATION LOGO)

                          CALEDONIA MINING CORPORATION

                                  NEWS RELEASE

         CALEDONIA COMPLETES PRIVATE PLACEMENT, ANNOUNCES SECOND QUARTER
                  RESULTS, AND LAUNCHES IT'S REDESIGNED WEBSITE

                          AUGUST 28TH, 2003, IMMEDIATE

Caledonia Mining Corporation ("Caledonia") of Toronto (TSX: CAL and
NASDAQ-OTCBB: CALVF) is pleased to report the completion of a $5 million private
placement financing.

The placement, a portion of which was handled by IBK Capital Corp. of Toronto as
Caledonia's fiscal agents, was for 20,000,000 units priced at $0.25 each. Each
unit consists of one common share of Caledonia and one half-share purchase
warrant. Each full warrant entitles the holder to purchase one common share of
Caledonia at a price of $0.35 for a period of eighteen months from the date of
issue.

The funds raised will be used to fund the capital improvements at the Barbrook
Mine in South Africa, exploration activities at the Goedgevonden diamond and
Rooipoort platinum properties in South Africa, and for general corporate
activities.

The Corporation reports an overall loss for the quarter of $1,406,000 ($0.006
per share). The year-to-date loss was $1,614,000 ($0.007 per share) compared to
a loss of $837,000 for the same six month period in 2002.

During the quarter, the Corporation's subsidiary, Barbrook Mines Limited
accounted for its first operating expenses at the Barbrook Gold Mine. Revenue
was then received from the first gold poured in early July. The resultant loss
was offset to a degree by a foreign exchange gain of $128,000 during the quarter
($304,000 year to date) resulting from the strengthening of the South African
Rand against the dollar. This currency fluctuation has been largely compensated
by the increase in the US dollar price of gold so that the Rand price of gold
continued to remain at over R80,000 per Kg.

Caledonia's Second Quarter report, which includes a property update will be
issued and posted on Caledonia's website on Thursday August 28th.

You are invited to visit Caledonia's redesigned website at
www.caledoniamining.com. The website provides information on Caledonia's
Corporate activities, Financial Reports, Press Releases, Property descriptions
and Maps showing Caledonia's worldwide projects.

FOR FURTHER INFORMATION PLEASE CONTACT CALEDONIA MINING CORPORATION:



                                                                          
S. E. HAYDEN                                JAMES JOHNSTONE                     CHRIS HARVEY
Chairman, President and CEO                 V-P Operations and COO              Technical Director
South Africa                                Canada                              Canada
Tel: (011-27-11) 447-2499                   Tel: (1-905) 607-7543               Tel: (1-905) 607-7543
Fax: (011-27-11) 447-2554                   Fax: (1-905) 607-9806               Fax: (1-905) 607-9806


FURTHER INFORMATION REGARDING CALEDONIA'S EXPLORATION ACTIVITIES AND OPERATIONS
ALONG WITH ITS LATEST FINANCIALS MAY BE FOUND ON THE CORPORATION'S WEBSITE
HTTP://WWW.CALEDONIAMINING.COM