Caledonia Announces a Second Joint Venture Agreement With SODIMICO Over Lubembe North Copper Cobalt Deposit in the Katanga Province of the Democratic Republic of Congo.

TORONTO--(BUSINESS WIRE)--July 15, 1998--Caledonia Mining Corporation of Toronto (TSE:CAL) (NASDAQ:CALVF) is pleased to announce that it has concluded a second agreement with Societe de Developpement Industriel et Minier du Congo (SODIMICO) managed and represented by Gecamines as the appointed agent of the Government, to explore and develop the Lubembe North copper cobalt deposit and surrounding anomalous area.

The Ministry of Mines of the Democratic Republic of Congo (DRC) has approved the agreement and authorized Gecamines accordingly.

The deposit, as indicated on the map attached, lies within Caledonia's existing SODIMICO concession area ZER LIV/KT in the Katanga Province on the northern extension of the famous Zambian-Congolese Copperbelt close to the Zambian border.

Existing mines in the immediate vicinity include Kinsenda and Musoshi (production history of 25 million tonnes grading 2.6% copper and unreported cobalt) to the north-west in the DRC, and in Zambia, Nchanga (3.7%copper) to the south-west and Mufulira (1994 proven reserves of 42 million tonnes grading 3% copper) in the south-east. The main railway line from Zambia to Lubumbashi runs across the Lubembe deposit which can also be easily accessed by road and air.

First discovered in the 1930's, the Lubembe North deposit is hosted in Lower Roan sediments on the northern margin of the Kafue anticline and appears to be associated with basement faulting. The deposit sits in an anomalous copper soil geochemical trend which extends for over 9 kilometers.

A portion of the Lubembe North anomaly was drill tested between 1935 and 1991 with 11,700 meters of diamond drilling. A resource of 47.5 million tonnes averaging 2.20% copper over a strike length of one kilometer, at depths from 90 to 400 meters was identified. Cobalt grades were generally unreported, but are indicated to average 0.1%.

The deposit remains open along strike and on both the up-dip and the down-dip extensions. One isolated drill hole SDM-4, 2.5 kilometers along strike from the initial discovery, intersected over 21 meters grading 2.22% copper and 1.44% cobalt. The potential for near surface oxide ores has still to be evaluated. The surrounding area remains completely untested.

Future work, to establish the extent and tonnage of the deposit, will include soil geochemistry, aeromagnetics and reverse circulation and diamond drilling and will commence immediately in conjunction with SODIMICO.

Both Caledonia and SODIMICO are convinced that Lubembe is a world class deposit which can be rapidly brought into production as a low cost producer.

    CONTACT:  Caledonia Mining Corporation
               S.E. Hayden, (27-11) 447-2499 (South Africa)
               or
               Steve Poad, 905/829-4848 (Canada)
               or
               Jim Johnstone, 905/829-4848  (Canada)
               or
               http://www.caledoniamining.com