Amended Report of Foreign Issuer (6-k/a)

FORM 6-K/A

(Amendment No. 1)

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Of the Securities Exchange Act of 1934

For the month of September 2014

Commission File Number: 000-13345

CALEDONIA MINING CORPORATION

(Translation of registrant’s name into English)

Suite 1000

36 Toronto Street

Toronto, ON M5C 2C5

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F___x___ Form 40-F _____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ____ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Caledonia Mining Corporation

(Registrant)

By: /s/ Steve Curtis

Name: Steve Curtis

Title: VP Finance, CFO, Director

Dated: September 5, 2014

Exhibit Index

Exhibit	Description

99.1	Interim Financial Statements
99.2	Interim MD&A
99.3	Interim Certificate - CEO
99.4	Interim Certificate - CFO

Exhibit 99.1

Caledonia Mining Corporation

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION

To the Shareholders of Caledonia Mining Corporation:

RESTATED AND RE-FILED

During the review of the Q2 2014 unaudited condensed consolidated financial statements in August 2014, an error was identified in these Q1 unaudited condensed consolidated financial statements. The error has been corrected and the unaudited condensed consolidated financial statements have been restated and re-filed as required. There was no effect on Total Comprehensive Income or Total Equity for Q1 2014.

Management has prepared the information and representations in this interim report. The unaudited condensed consolidated financial statements of Caledonia Mining Corporation (“Group”) have been prepared in accordance with International Accounting Standard 34 (“IAS 34”) Interim Financial Reporting and, where appropriate, these statements include some amounts that are based on best estimates and judgment. Management have determined such amounts on a reasonable basis in order to ensure that the unaudited condensed consolidated financial statements are presented fairly, in all material respects.

The Management Discussion and Analysis (“MD&A”) also includes information regarding the impact of current transactions, sources of liquidity, capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

The Group maintains adequate systems of internal accounting and administrative controls, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information is produced.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting (“ICOFR”). Any system of internal controls over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

As part of their monitoring and oversight role, the Audit Committee performs a review and conducts discussions with management. No material exceptions were noted based on the additional procedures and no evidence of fraudulent activity was found.

The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Audit Committee is composed of three independent directors. This Committee meets periodically with management and the external auditor to review accounting, auditing, internal control and financial reporting matters.

These condensed consolidated financial statements have not been reviewed by the Group’s auditors.

These restated unaudited condensed consolidated financial statements for the period ended March 31, 2014 were approved by the Board of Directors and signed on its behalf on August 11, 2014.

(Signed) S. E. Hayden (Signed) S. R. Curtis

President and Chief Executive Officer Vice-President, Finance and Chief Financial Officer

Caledonia Mining Corporation

Condensed consolidated statements of profit or loss and other comprehensive income - Restated
(In thousands of Canadian dollars except for earnings per share amounts)
For the three months ended March 31,
Unaudited
			Restated
	Note		2014	2013


Revenue			17,063	19,218
Less: Royalty			(1,195)	(1,349)
Production costs	6		(8,788)	(8,019)
Depreciation			(1,058)	(803)
Gross profit			6,022	9,047
Administrative expenses	7		(1,847)	(1,175)
Foreign exchange gain(1)_			257	-
Results from operating activities (1)			4,432	7,872
Finance income			-	67
Finance cost			(41)	(131)
Net finance (costs)			(41)	(64)
Profit before income tax (1)			4,391	7,808
Income and other tax expense			(1,300)	(2,278)
Profit for the period (1)			3,091	5,530
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation differences for foreign operations (1)			2,134	827
Other comprehensive income for the period, net of income tax (1)			2,134	827
Total comprehensive income for the period			5,225	6,357
Profit attributable to:
Shareholders of the Company (1)			2,425	4,593
Non-controlling interests			666	937
Profit for the period (1)			3,091	5,530
Total comprehensive income attributable to:
Shareholders of the Company			4,558	5,530
Non-controlling interests			667	827
Total comprehensive income for the period			5,225	6,357
Earnings per share
Basic earnings per share (1)		0.05		0.09
Diluted earnings per share (1)		0.05		0.09

(1)

Restated

The accompanying notes on pages 6 to 18 are an integral part of these condensed consolidated interim financial statements.

On behalf of the Board: “S.E. Hayden” - Director and “S.R.Curtis” - Director

Caledonia Mining Corporation

Condensed consolidated statements of financial position - Restated
(In thousands of Canadian dollars)
Unaudited

		Restated
		March 31,	December 31,
As at	Note	2014	2013

Assets
Property, plant and equipment	8	36,181		33,448
Total non-current assets		36,181		33,448

Inventories	9	6,847		6,866
Prepayments		179		177
Trade and other receivables	10	3,854		3,889
Cash and cash equivalents	11	26,714		25,222
Total current assets		37,594		36,154
Total assets		73,775		69,602

Equity and liabilities
Share capital		57,607		57,607
Reserves (1)		158,202		156,069
Accumulated deficit (1)		(160,011	)	(161,651	)
Equity attributable to shareholders		55,798		52,025
Non-controlling interest		494		(51	)
Total equity		56,292		51,974

Liabilities
Provisions		2,094		1,572
Deferred tax liability		8,528		8,522
Total non-current liabilities		10,622		10,094

Trade and other payables		5,027		4,600
Income taxes payable		1,834		1,138

Bank Overdraft	-	1,796
Total current liabilities	6,861	7,534
Total liabilities	17,483	17,628
Total equity and liabilities	73,775	69,602

(1)

Restated

The accompanying notes on pages 6 to 18 are an integral part of these condensed consolidated interim financial statements.

On behalf of the Board: “S.E. Hayden” - Director and “S.R.Curtis” - Director

Caledonia Mining Corporation

Condensed consolidated statements of changes in equity - Restated

(expressed in thousands of Canadian dollars)

Unaudited	Share Capital			Investment Revaluation Reserve			Foreign Currency Translation Reserve			Contributed Surplus		Share based Payment Reserve		Accumulated Deficit			Total			Non-controlling interest (NCI)			Total Equity

Balance at December 31, 2012		197,137			5			(2,010	)		-		15,682		(153,399	)		57,415			(1,796	)		55,619
Transactions with owners:
Reduction of stated capital		(140,000	)		-			-			140,000		-		-			-			-			-
Shares-based payment		-			-			-			-		68		-			68			-			68
Dividend paid		-			-			-			-		-		(5,202	)		(5,202	)		(745	)		(5,947	)
Shares issued		470			-			-			-		-		-			470			-			470
Movement within equity		-			(5	)		-			-		-		5			-			-			-
Total comprehensive income:
(Loss)/profit for the year		-			-			-			-		-		(3,055	)		(3,055	)		2,565			(490	)
Other comprehensive income		-			-			2,329			-		-		-			2,329			(75	)		2,254
Balance at December 31, 2013		57,607			-			319			140,000		15,750		(161,651	)		52,025			(51	)		51,974
Transactions with owners:
Dividend paid		-			-			-			-		-		(785	)		(785	)		(122	)		(907	)
Total comprehensive income:
Profit for the period (1)		-			-			-			-		-		2,425			2,425 770			666			3,091
Other comprehensive income (1)		-			-			2,133			-		-		-			2,133			1			2,134
Balance at March 31, 2014 Unaudited		57,607			-			2,452			140,000		15,750		(160,011	)		55,798			494			56,292

(1)

Restated

The accompanying notes on pages 6 to 18 are an integral part of these condensed consolidated interim financial statements.

On behalf of the Board: “S.E. Hayden” - Director and “S.R.Curtis” - Director

Caledonia Mining Corporation

Condensed consolidated statements of cash flows
(In thousands of Canadian dollars)
For the three months ended March 31,
Unaudited

Cash flows from operating activities	Note		2014			2013


Cash generated by operating activities		12		6,868			5,435
Interest received				-			67
Interest paid				(41	)		(131	)
Tax paid				(600	)		(3,163	)
Cash from operating activities				6,227			2,208

Cash flows from investing activities
Property, plant and equipment additions				(2,032	)		(1,340	)
Net cash used in investing activities				(2,032	)		(1,340	)

Cash flows from financing activities
Dividend paid				(907	)		(2,834	)
Advance dividend paid		5		-			(969	)
Proceeds from the exercise of share options				-			182
Net cash used in financing activities				(907	)		(3,621	)
Net increase/(decrease) in cash and cash equivalents				3,288			(2,753	)
Cash and cash equivalents at beginning period				23,426			27,942
Cash and cash equivalents at end of period		11		26,714			25,189

The accompanying notes on pages 6 to 18 are an integral part of these condensed consolidated interim financial statements.

On behalf of the Board: “S.E. Hayden” - Director and “S.R.Curtis” - Director

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

1 Reporting entity

Caledonia Mining Corporation (the “Company”) is a company domiciled in Canada. The address of the Company’s registered office is Suite 4009, 1 King Street West, Toronto, Ontario, M5H 1A1, Canada. The Condensed Consolidated Financial Statements of the Group as at and for the three months ended March 31, 2014 comprises the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group is primarily involved in the operation of a gold mine and the acquisition, exploration and development of mineral properties for the exploration of base and precious metals.

2 Basis for preparation

(a) Statement of compliance

These unaudited Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all the information required for full annual financial statements. Accordingly, certain information and disclosures normally included in the annual Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) have been omitted or condensed. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended December 31, 2013.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following item in the statement of financial position:

equity-settled share-based payment arrangements are measured at fair value on grant date.

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company. All financial information presented in Canadian dollars has been rounded to the nearest thousand.

3 Use of estimates and judgements

Management makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and assumptions are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual experience may differ from these estimates and assumptions. The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income.

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

3 Use of estimates and judgements - (continued)

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at December 31, 2013.

Accordingly, the accounting policy relating to the provision has been included below:

The condensed consolidated interim financial statements should be read in conjunction with the Group’s annual financial statements for the year ended December 31, 2013.

4 Significant accounting policies

Except as stated otherwise, the same accounting policies and methods of computation have been applied consistently to all periods presented in these interim financial statements as compared to the Group’s annual financial statements for the year ended December 31, 2013. In addition, the accounting policies have been applied consistently by the Group entities.

(i) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market risk free rate applicable to the currency in which the liability will be incurred. The unwinding of the discount is recognised as finance cost.

(ii) Site restoration

The Group recognises liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of property, plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to mineral properties along with a corresponding increase in the rehabilitation provision in the period incurred.

Discount rates used are a pre-tax rate that reflects the risk free rate applicable to the currency in which the liability will be incurred and are used to calculate the net present value. The Group’s estimates of rehabilitation costs, which are reviewed annually, could change as a result of changes in regulatory requirements, discount rates, effects of inflation and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mineral properties with a corresponding entry to the rehabilitation provision. Changes resulting from production are charged to profit and loss for the period. The costs of rehabilitation projects that were included in the rehabilitation provision are charged against the provision as incurred. The cost of on-going current programs to prevent and control pollution is charged against profit and loss as incurred.

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

5	Blanket Zimbabwe Indigenisation Transaction

On February 20, 2012 the Group announced it had signed a Memorandum of Understanding (“MoU”) with the Minister of Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Blanket Mine for a paid transactional value of US$30.09 million. Pursuant to the above, the Group entered into agreements with each Indigenisation Shareholder to sell its 51% ownership interest in Blanket Mine as follows:

·	A 16% interest was sold to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for US$11.74 million.

·	A 15% interest was sold to Fremiro, which is owned by Indigenous Zimbabweans, for US$11.01 million.

A 10% interest was sold to Blanket Employee Trust Services (Private) Limited (BETS) for the benefit of present and future managers and employees for US$7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust (Employee Trust) with Blanket Mine’s employees holding participation units in the Employee Trust.

·	A 10% interest was donated to the Gwanda Community Share Ownership Trust (Community Trust). Blanket Mine undertook and paid a non-refundable donation of US$1 million to the Community Trust.

The Group facilitated the vendor funding of these transactions which are repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining 20% unconditionally accrues to the respective Indigenous Shareholders.

Outstanding balances on the facilitation loans attract interest at a rate of 10% over the 12-month LIBOR. The timing of the repayment of the loans depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine.

The facilitation loans were declared by Caledonia Holdings Zimbabwe (Blanket Mine’s parent company) to a wholly-owned subsidiary of Caledonia Mining Corporation as a dividend in specie on February 14, 2013 and withholding tax amounting to US$1.504 million was paid and expensed on March 5, 2013.

Accounting treatment

The directors of Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) a wholly owned subsidiary of the Company, performed an assessment, using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10), and concluded that CHZ should continue to consolidate Blanket Mine and accordingly the subscription agreements will be accounted for as a transaction with non-controlling interests and share based payments.

Accordingly, on the effective date of the transaction, the subscription agreements were accounted for as follows:

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

5 Blanket Zimbabwe Indigenisation Transaction-(continued)

·	Non-controlling interests (NCI) were recognised on the portion of shareholding upon which dividends declared by Blanket Mine will accrue unconditionally to equity holders as follows:

(a)

20% of the 16% shareholding of NIEEF;

(b)

20% of the 15% shareholding of Fremiro;

(c)

100% of the 10% shareholding of the Community Trust.

·	This effectively means that NCI is recognised at Blanket Mine level at 16.2% of the net assets.

·	The remaining 80% of the shareholding of NIEEF and Fremiro is recognised as non-controlling interests to the extent that their attributable share of the net asset value of Blanket Mine exceeds the balance on the

facilitation loans including interest. At March 31, 2014 the attributable net asset value did not exceed the balance on the respective loan accounts and thus no additional NCI was recognised.

The transaction with the BETS will be accounted for in accordance with IAS 19 Employee Benefits (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket Mine if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceed the balance on the BETS facilitation loan they will accrue to the employees at the date of such declaration.

·	The Employee Trust and BETS are structured entities which are effectively controlled and consolidated by Blanket Mine. Accordingly the shares held by BETS are effectively treated as treasury shares in Blanket Mine and no NCI is recognised.

USD 000s	Shareholding			NCI Recognised			NCI subject to facilitation loan			Balance of facilitation loan at 31 March 2014 #		Dec, 31 2013
NIEEF		16	%		3.2	%		12.8	%		11,742		11,742
Fremiro		15	%		3.0	%		12.0	%		11,478		11,360
Community Trust		10	%		10.0	%		-			-		-
BETS ~		10	%		-	*		-	*		7,652		7,573
		51	%		16.2	%		24.8	%	US$30,872		US$30,675

The balance on the facilitation loans is reconciled as follows:

		USD 000s
Subscription price funded on loan account – at 5 September 2012		30,090
Interest accrued		3,222
Dividends used to repay loans		(2,440)
Balance at March 31, 2014		30,872

*The shares held by BETS are effectively treated as treasury shares (see above).

~ Accounted for under IAS19 Employee Benefits.

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

5 Blanket Zimbabwe Indigenisation Transaction – (continued)

# Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable (see above).

Advance dividends

In anticipation of completion of the underlying subscription agreements, Blanket Mine agreed to an advance dividend arrangement with NIEEF and the Community Trust as follows:

(a)	Advances to the Community Trust against their right to receive dividends declared by Blanket Mine on their shareholding as follows:

A US$2 million payment on or before September 30, 2012;

A US$1 million payment on or before February 28, 2013; and

A US$1 million payment on or before April 30, 2013.

These advance payments have been recorded to a loan account bearing interest at a rate of 10% over the 12-month LIBOR. The loan is repayable by way of set off of future dividends on the Blanket Mine shares owed by the Community Trust.

(b)	An advance payment of US$1.8 million to NIEEF against their right to receive dividends declared by Blanket Mine on their shareholding. The advance payment has been debited to an interest-free loan account and is repayable by way of set off of future dividends on the Blanket Mine shares owned by

NIEEF. Whilst any amount remains outstanding on the NIEEF dividend loan account, interest on the NIEEF facilitation loan is suspended.

The movement in the advance dividend loans is reconciled as follows:

	NIEEF			Community Trust			Total
	US$ 000s			US$ 000s			US$ 000s
Balance at January 1, 2013		1,800			2,062			3,862
Paid		-			2,000			2,000
Interest accrued		-			346			346
Dividends used to repay advance dividends		(1,442	)		(901	)		(2,343	)
Balance at December 31,2013		358			3,507			3,865
Paid		-			-			-
Interest accrued		-			95			95
Dividends used to repay advance dividends		-			(136	)		(136	)
Balance at March 31, 2014		358			3,466			3,824

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

6 Production costs

	2014		2013

Salaries and wages		2,749		2,395
Consumable materials		5,160		4,494
Site restoration		9		25
Exploration		120		300
Safety		125		118
On mine administration		625		687
		8,788		8,019

7 Administrative expenses

	2014		2013

Investor relations		82		182
Management contract fee		260		182
Professional consulting fees		325		-
Audit fee		67		45
Legal fee and disbursements		51		122
Accounting services fee		8		9
Listing fees		58		16
Travel		86		74
Directors fees		138		66
Salaries and wages		483		339
Other		289		140
		1,847		1,175

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

8 Property, plant and equipment

	Land and buildings			Mineral properties being depreciated		Mineral properties not depreciated		Plant and equipment		Fixtures and fittings		Motor vehicles		Total

Cost

Balance at January 1, 2013		4,534			11,325		10,838		19,346		1,196		1,782		49,021
Additions		3,240			2,695		4,451		979		85		288		11,738
Foreign exchange movement		378			971		1,031		1,151		25		149		3,705
Balance at December 31, 2013		8,152			14,991		16,320		21,476		1,306		2,219		64,464
Additions		134			1,019		692		596		33		3		2,477
Foreign exchange movement		(135	)		627		387		714		31		75		1,699
Balance at March 31, 2014		8,151			16,637		17,399		22,786		1,370		2,297		68,640

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

8 Property, plant and equipment - (continued)

	Land and buildings			Mineral properties being depreciated		Mineral properties not depreciated		Plant and equipment		Fixtures and fittings		Motor vehicles		Total
Depreciation and Impairment losses

Balance at January 1, 2013		978			2,028		-		7,759		982		803		12,550
Depreciation for the year		272			620		-		2,016		70		298		3,276
Impairment		399			-		13,713		91		-		-		14,203
Foreign exchange movement		85			178		620		20		11		73		987
Balance at December 31, 2013		1,734			2,826		14,333		9,886		1,063		1,174		31,016
Depreciation for the year		142			202		-		502		124		88		1,058
Foreign exchange movement		(353	)		73		393		198		34		40		385
Balance at March 31, 2014		1,523			3,101		14,726		10,586		1,221		1,302		32,459
Carrying amounts
At December 31, 2013		6,418			12,165		1,987		11,590		243		1,045		33,448
At March 31, 2014		6,628			13,536		2,673		12,200		149		995		36,181

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

9 Inventories

			December 31
	2014		2013

Consumable stores		6,847		5,995
Gold in progress		-		871
		6,847		6,866

Inventory is comprised of gold in circuit at Blanket and consumable stores utilised by Blanket Mine. Consumables stores are disclosed net of any write downs or provisions of obsolete items.

10 Trade and other receivables

			December 31
	2014		2013

Bullion sales receivable		1,956		1,662
VAT receivables		885		1,331
Deposits for stores and equipment and other receivables		1,013		896
Current portion		3,854		3,889

The bullion receivable is received shortly after the delivery of the gold and no provision for non-recovery is required.

11 Cash and cash equivalents

	2014		December 31 2013

Bank balances		26,714		25,222
Cash and cash equivalents in the statement of financial position		26,714		25,222
Bank overdrafts used for cash management purposes		-		(1,796	)
Cash and cash equivalents in the statement of cash flows		26,714		23,426

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

12 Cash flow information

Non-cash items and information presented separately on the cash flow statement:

	2014			2013
	$			$
Profit for the period (1)		3,091			5,530
Adjustments for:
Net finance costs		41			64
Income tax expense		1,300			2,278
Site restoration		76			25
Depreciation		1,058			803
Foreign exchange (1)		823			(53	)
Cash generated by operations before working capital changes		6,389			8,647
Inventories		19			615
Prepayments		(2	)		(20	)
Trade and other receivables		35			(3,488	)
Trade and other payables		427			(319	)
Cash generated by operating activities		6,868			5,435

(1)

Restated

13 Related parties

Transactions with key management personnel

Key management personnel compensation:

A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities.

A number of these entities transacted with the Group in the reporting period. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

						Balance outstanding
3 months to Mar 31,						As at March 31,
Note		2014		2013		2014		2013
		$		$		$		$
Management fees, allowances and bonus paid or accrued to a company for management services provided by the Group’s President	(i)		227		151		-		-
Rent for office premises paid to a company owned by members of the President’s family.			9		10		-		-

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

(expressed in thousands of Canadian dollars)

(i)

The Group has entered into a management agreement with Epicure Overseas S.A. (“Epicure”), a Panamanian Group, for management services provided by the President. The Group is required to pay a base annual remuneration adjusted for inflation and bonuses set out in the agreement. In the event of a change of control of the Group, Epicure can terminate the agreement and receive a lump sum payment equal to 200% of the remuneration for the year in which the change occurs.

We note that, because management compensation may be considered to be a related party transaction for purposes of the financial statements, the related party note to the audited financial statements may still continue to make reference to the Epicure contract.

14 Operating Segments

The Group's operating segments have been identified based on geographic areas. The Group has four reportable segments as described below, which are the Group's strategic business units. The strategic business units are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group’s CEO reviews internal management reports on at least a quarterly basis. The following geographical areas describe the operations of the Group's reportable segments: Corporate, Zimbabwe, South Africa and Zambia. The accounting policies of the reportable segments are the same as described in note 4.

The Zimbabwe operating segments comprise an operating gold mine. The Zambia segments consist of Nama copper project and cobalt project. The South Africa geographical segment comprise a gold mine under care and maintenance as well as sales made by Greenstone Management Services (Proprietary) Limited to the Blanket Mine.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management report that are reviewed by the Group's CFO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

Information about reportable segments

2014		Corporate	Zimbabwe	South Africa	Zambia	Inter-group eliminations adjustments	Total

External Revenue		-	17,063	2,173	-	(2,173)	17,063
Royalty		-	(1,195)	-	-	-	(1,195)
Production costs		-	(8,760)	(1,960)	(64)	1,996	(8,788)
Management fee		-	(1,289)	1,289	-	-	-
Administrative expenses		(974)	(95)	(686)	(92)	-	(1,847)
Depreciation		-	(1,013)	(3)	(104)	62	(1,058)
Foreign exchange gain/(loss) (1)		195	-	282	-	(220)	257
Finance expense		-	(41)	-	-	-	(41)
Segment profit before income tax(1)		(779)	4,670	1,095	(260)	(335)	4,391
Income tax expense		(56)	(971)	(273)	-	-	(1,300)
Segment profit after income tax(1)		(835)	3,699	822	(260)	(335)	3,091
Geographic segment assets:
Current assets Current assets	14,812		10,950	11,796	36	-	37,594
Property, Plant and Equipment	55		37,507	357	-	(1,738)	36,181
Intercompany assets	63,173		1,664	6,286	-	(71,123)	-
Expenditure on property, plant and equipment	-		2,035	20	-	(23)	2,032
Geographic segment liabilities :
Current liabilities	140		4,422	2,297	2		6,861
Non-current liabilities	-		-	9,869	753		10,622
Intercompany liabilities	3,655		1,039	38,623	-	(43,317)	-

(1)

Restated

Caledonia Mining Corporation

Notes to the Condensed Consolidated Financial Statements

For the three months ended March 31, 2014 and March 31, 2013

Restated

14 Operating Segments – (continued)

2013	Canada			Zimbabwe			South Africa			Zambia			Inter-group eliminations adjustments			Total

External Revenue		-			19,218			1,726			-			(1,726	)		19,218
Royalty		-			(1,349	)		-			-						(1,349	)
Production costs		-			(8,269	)		(1,651	)		-			1,901			(8,019	)
Management fee		-			(1,184	)		1,184			-			-			-
Administrative and share-based payment expenses		(698	)		(82	)		(395	)		-			-			(1,175	)
Depreciation		-			(849	)		(6	)		-			52			(803	)
Finance cost		8			(72	)		-			-			-			64
Foreign exchange gain/(loss)		-			-			-			-			-			-
Segment profit before income tax		(690	)		7,413			858			-			227			7,808
Income tax expense		(1,532	)		(433	)		(313	)		-			-			(2,278	)
Segment profit after income tax		(2,222	)		6,980			(545	)		-			227			5,530
Geographic segment assets:
Current assets		15,964			13,016			6,681			43			(270	)		35,434
Non- Current assets
Property, Plant and Equipment		55			27,686			574			11,133			(1,560	)		37,888
Expenditure on property, plant and equipment		-			1,148			3			189			-			1,340
Intercompany balances		-			-			-			-			-			-
Geographic segment liabilities
Current liabilities		(336	)		(5,754	)		(1,009	)		(7	)		-			(7,106	)
Non-current liabilities		-			(6,658	)		(295	)		-			-			(6,953	)
Intercompany balances		-			-			-			-			-			-

Major customer

Revenues from Fidelity printers and Refiners in Zimbabwe amounted to approximately $17,063 for the period ended March 31, 2014. In 2013, revenue from Rand Refinery in South Africa amounted to approximately $19,218.

Directors and Management at May 7, 2014

BOARD OF DIRECTORS	OFFICERS
L.A. Wilson (1) (2) (3) (4) (5) (7) - Chairman	S. E. Hayden
Non- executive Director	President and Chief Executive Officer
New York, United States of America	Johannesburg, South Africa

S. E. Hayden (2) (4) (5) (6) (7)	S. R. Curtis
President and Chief Executive Officer Johannesburg, South Africa	Vice-President Finance and Chief Financial Officer
	Johannesburg, South Africa

J. Johnstone (3) (5) (6) (7)	D. Roets (6) (7)
Retired Mining Engineer	Chief Operating Officer
Gibsons, British Columbia, Canada	Johannesburg, South Africa

S. R. Curtis (3) (4) (5) (7)	Dr. T. Pearton (6) (7)
Vice-President Finance and Chief Financial officer	Vice-President Exploration
Johannesburg, South Africa	Johannesburg, South Africa

J. L. Kelly (1) (2) (3) (7)	J.M. Learmonth (5) (7)
Non- executive Director	Vice-President Business Development
New York, United States of America	Johannesburg, South Africa

R. Patricio (2) (3) (7)	DSA Corporate Services Inc.
Non- executive Director	Company Secretary
Toronto, Ontario, Canada	36 Toronto Street – Suite1000
	Toronto, Ontario, M5C 2C5
J. Holtzhausen (1) (2) (5) (6) (7) - Chairman Audit Committee
Non- executive Director	Board Committees
Cape Town, South Africa	(1) Audit Committee
	(2) Compensation Committee
	(3) Corporate Governance Committee
	(4) Nominating Committee
	(5) Disclosure Committee
	(6) Technical Committee
	(7) Strategic Planning Committee

CORPORATE DIRECTORY as at May 7, 2014

CORPORATE OFFICES	SOLICITORS
Canada - Head Office	Borden Ladner Gervais LLP
Caledonia Mining Corporation	Suite 4100, Scotia Plaza
Suite 4009, 1 King West	40 King Street West
Toronto, Ontario M5H 1A1	Toronto, Ontario M5H 3Y4 Canada
Tel:(1)(416) 369-9835 Fax:(1)(416) 369-0449
info@caledoniamining.com	AUDITORS
South Africa – Africa Office	KPMG Inc.
Greenstone Management Services (Pty) Ltd.AUDITORS	85 Empire Road
P.O. Box 834BDO Dunwoody LLP	Parktown 2193
Saxonwold 2132Chartered Accountants	South Africa
South AfricaSuite 3300, 200 Bay Street	Tel: +27 83 445 1400, Fax: + 27 11 647 6018
Tel: (27)(11) 447-2499 Fax: (27)(11) 447-2554
	REGISTRAR & TRANSFER AGENT
Zambia	Computershare
Caledonia Mining (Zambia) Limited	100 University Ave, 8th Floor,
P.O. Box 36604	Toronto, Ontario, M5J 2Y1
Lusaka, ZambiaSuite 400 200 University Ave	Tel:+1 416 263 9483
Tel:(260)(1) 29-1574 Fax(260)(1) 29-2154
	BANKERS
Zimbabwe	Canadian Imperial Bank of Commerce
Caledonia Holdings Zimbabwe (Limited)	6266 Dixie Road
P.O. Box CY1277	Mississauga, Ontario L5T 1A7 Canada
Causeway, Harare
Zimbabwe	NOMAD
Tel: (263) (4) 701 152/4 Fax: (263)(4) 702 248	Numis Securities Limited
	The London Stock Exchange Building
CAPITALIZATION at May 7, 2014 RBC Capital Markets	10 Paternoster Square
Authorised: Unlimited71 Queen Victoria Street	London EC4M 7LT
Shares, Warrants and Options Issued:	Tel: +44 207 260 1000
Common Shares: 52,117,908Tel: +44 20 7653 4000
Warrants: Nil	JOINT BROKERS (AIM)
Options: 2,817,920	Numis Securities Limited

SHARES LISTED	WH Ireland
Toronto Stock Exchange Symbol “CAL”	24 Martin Lane
NASDAQ OTCQX Symbol "CALVF"	London EC4R ODR
London “AIM” Market Symbol “CMCL”	Tel: +44 207 220 1751

Exhibit 99.2

CALEDONIA MINING CORPORATION

AUGUST 11, 2014

RESTATED

Management’s Discussion and Analysis

This management’s discussion and analysis (MD&A”) of the consolidated operating results and financial position of Caledonia Mining Corporation ("Caledonia” or the “Company”) is for the fiscal quarter ended March 31, 2014 (“Q1 2014” or the “Quarter”). It should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Caledonia for the quarter year ended March 31, 2014 (“the Unaudited Condensed Consolidated Financial Statements”) which are available from the System for Electronic Data Analysis and Retrieval at www.sedar.com or from Caledonia’s website at www.caledoniamining.com. The Unaudited Condensed Consolidated Financial Statements and related notes have been prepared in accordance with International Accounting Standard 34 (“IAS 34”) Interim Financial Reporting. In this MD&A, the terms “Caledonia”, the “Company”, “we”, “our” and “us” refer to the consolidated operations of Caledonia Mining Corporation and our subsidiaries unless otherwise specifically noted or the context requires otherwise.

Note that all currency references in this document are to Canadian Dollars, unless otherwise stated.

TABLE OF CONTENTS

Overview

2.	Highlights

3.	Summary Financial Results

4.	Operations at the Blanket Gold Mine, Zimbabwe

4.1.	Safety, Health and Environment

4.2.	Social Investment and Contribution to the Zimbabwean Economy

4.3.	Gold Production

4.4.

Costs

4.5.	Underground

4.6.	Metallurgical Plant

4.7.	Capital Projects

4.8.	Indigenisation

4.9.	Opportunities

4.10.

Outlook

5.	Exploration and Project Development

Investing

Financing

8.	Liquidity and Capital Resources

9.	Off-Balance Sheet Arrangements, Contractual Commitments and Contingencies

10.	Non-IFRS Measures

11.	Related Party Transactions

12.	Critical Accounting Policies

13.	Financial Instruments

14.	Dividend Policy and Other Shareholder Information

15.	Securities Outstanding

16.	Risk Analysis

17.	Forward-Looking Statements

18.

Controls

19.	Qualified Person

OVERVIEW

Caledonia is an exploration, development and mining corporation focused on Southern Africa. Following the implementation of indigenisation at the Blanket Gold Mine (“Blanket” or the “Blanket Mine”) in September 2012, Caledonia’s primary assets is a 49% legal ownership in Blanket, an operating gold mine in Zimbabwe. Caledonia continues to consolidate Blanket, as explained in Note 5 to the Unaudited Condensed Consolidated Financial Statement, accordingly operational and financial information set out in this MD&A is on a 100% basis, unless otherwise specified.

Caledonia’s shares are listed in Canada on the Toronto Stock Exchange (symbol - “CAL”), on London’s AIM (symbol - “CMCL”) and are also traded on the American OTCQX (symbol - “CALVF”).

During the review of the Q2 2014 unaudited condensed consolidated financial statements in August 2014, an error was identified in the Q1 unaudited condensed consolidated financial statements. The error has been corrected and the unaudited condensed consolidated financial statements have been restated and re-filed as required. There was no effect on Total Comprehensive Income or Total Equity for Q1 2014.

This MD&A has been restated and re-filed. Refer to the restated Unaudited Condensed Consolidated Financial Statement for the period ended March 31, 2014, dated August 11, 2014 for reference to the statements that have been restated.

2.	HIGHLIGHTS

	Q1 2013	Q1 2014 Restated	Comment
Gold produced (oz)	10,472	10,241	Gold production in Q1 2014 was adversely affected by lower head grade and lower tonnage throughput
On Mine cash cost (US$/oz)1	652	651	On-mine costs for gold sold in Q1 2014 benefitted from work in progress brought forward from the preceding quarter with a carrying value of $411/oz.
All-in sustaining cost (US$/oz)1	924	923	All-in sustaining cost remains stable
Gold Sales (oz)	11,964	12,210	Gold sales in Q1 2014 includes work in progress brought forward from the preceding quarter of 1,969 oz
Average realised gold price (US$/oz)1	1,600	1,288	The lower realised gold price was primarily due to the lower gold price
Gross profit ($’m)2	9.0	6.0	Lower gross profit was mainly due to the lower realised gold prices, ameliorated by the sale of gold work in progress brought forward
Net profit attributable to shareholders ($’m) Restated	4.6	2.4	Lower gross profit was ameliorated by a small foreign exchange gain, reduced effective tax rate and the sale of work in progress brought forward from the preceding quarter
Adjusted basic earnings per share3 (cents)	11.9	4.1	Adjusted basic earnings per share excludes foreign exchange profits.
Cash and cash equivalents ($’m)	25.2	26.7	Caledonia’s cash is held in Canadian, UK and South African banks.
Cash from operating activities ($’m)	2.2	6.2	Strong cash generation in Q1 due to stable working capital and lower taxation payments.
Payments to the community and Zimbabwe government ($’m)	5.6	2.8	Payments including direct and indirect taxes, royalties, licence fees and levies were lower in the Quarter primarily due to lower income tax payable on the reduced profit and reduced royalty payments due to the lower prevailing gold price.

________________________

1	Non-IFRS measures such as “on-mine cash cost per ounce” “all-in sustaining cost per ounce” and “average realised gold price” are used throughout this document. Refer to Section 10 of this MD&A for a discussion of non-IFRS measures.

2 Gross profit is after deducting royalties, production costs and depreciation but before administrative expenses.

Gold Sales Mechanism

On January 28, 2014 Caledonia announced that as a result of new regulations introduced by the Zimbabwe Ministry of Finance, all gold produced in Zimbabwe must now be sold to Fidelity Printers and Refiners Limited (“Fidelity”), a company which is controlled by the Zimbabwean authorities and which is now responsible for the final refining and marketing of all gold produced in Zimbabwe. Accordingly, all of Blanket’s production has subsequently been sold to Fidelity. Blanket receives 98.5% of the value of the gold within a maximum of 7 days of a sale to Fidelity. Blanket has received all payments due from Fidelity under these new arrangements in-full and on-time.

Indigenisation

Transactions that implemented the indigenisation of Blanket were completed on September 5, 2012 following which Caledonia owns 49% of Blanket and received a Certificate of Compliance from the Government of Zimbabwe which confirms that Blanket is fully compliant with the Indigenisation and Economic Empowerment Act.

As a 49% shareholder Caledonia receives 49% of Blanket’s dividends plus the repayment of the $30 million vendor facilitation loans and a monthly management fee. Caledonia continues to consolidate Blanket for accounting purposes.

As an indigenised entity, Blanket can implement its long term growth strategy. The Board of Directors of Blanket, which includes representatives of the Indigenous Zimbabwean shareholders, has approved a capital investment programme for 2014 to 2017. This investment programme, which was endorsed by the Board of Directors of Caledonia, will be funded from Blanket’s internally generated cash, and is expected to result in progressive increases in gold production.

Exploration Highlights

Exploration continued at the Blanket Mine focussed on the potential to extend the Blanket mineralisation below the 750 meter level and at certain of its satellite properties. Mineralisation was identified at the Eroica and AR Main target zones and work is in progress to incorporate this mineralisation into the mineral resource basis for the Blanket Mine. Exploration development and diamond drilling at the two satellite projects, the GG Project and the Mascot Project have established the existence of multiple mineralized zones with potentially favourable gold grades. Further work is being done to define the extent and viability of these mineralized zones.

Dividend Policy and Shareholder Matters

On November 25, 2013 Caledonia announced a revised dividend policy in terms of which it intends to pay a dividend of 6 Canadian cents per share in 2014, split into 4 equal quarterly payments of 1.5 Canadian cents per share. The first quarterly dividend was paid on January 31, 2014; the second quarterly dividend was paid on April 30, 2014. Caledonia will continue to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take advantage of any suitable opportunities that may arise without the need to raise third party finance.

________________

3	Adjusted earnings per share (“EPS”) is a non-IFRS measure which aims to reflect Caledonia’s ordinary trading performance. Refer to Section 10 of this MD&A for a discussion of non-IFRS measures

Strategy

Caledonia’s primary strategy is to continue the existing investment programme at Blanket with the objective of increasing production. Caledonia believes the continuation of this strategy is in the best interests of shareholders because it is expected to increase cash flows and accelerate the repayment of the outstanding facilitation loans. Subject to an ongoing evaluation of the investment climate in Zimbabwe, Blanket and Caledonia will also consider additional acquisition opportunities in Zimbabwe on the basis of, inter alia, their fit with the existing operations and their capacity to enhance value for both Blanket’s indigenous shareholders and Caledonia.

Caledonia may also consider using its financial and managerial resources which are outside Zimbabwe to consider any suitable opportunities elsewhere in sub-Saharan Africa.

3.	SUMMARY FINANCIAL RESULTS

The table below sets out the unaudited consolidated profit and loss for the quarters ended March 31, 2014 and 2013 prepared under IFRS.

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (unaudited) (in thousands of Canadian dollars except per share amounts)
	Three months ended March 31
	Restated(1)
	2014			2013
	$			$
Revenue		17,063			19,218
Royalty		(1,195	)		(1,349	)
Production costs		(8,788	)		(8,019	)
Depreciation		(1,058	)		(803	)
Gross profit		6,022			9,047
Administrative expenses		(1,847	)		(1,175	)
Foreign exchange gain/(loss) (1)		257			-
Results from operating activities (1)		4,432			7,872
Net finance income/(expense)		(41	)		(64	)
Profit before tax (1)		4,391			7,808
Tax expense		(1,300	)		(2,278	)
Profit for the period (1)		3,091			5,530

Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences for foreign operations (1)		2,134			827
Other comprehensive income net of income tax		2,134			827
Total comprehensive income for the period		5,225			6,357

Profit attributable to:
Shareholders of the Company (1)		2,425			4,593
Non-controlling interests		666			937
Profit for the period (1)		3,091			5,530

Total comprehensive income attributable to:
Shareholders of the Company		4,558			5,530
Non-controlling interests		667			827
Total comprehensive income for the period		5,225			6,357

Earnings per share (cents)(ii)
Basic (1)		4.7			9.0
Diluted (1)		4.7			9.0
Adjusted earnings per share (cents) (i), (ii)
Basic		4.1			11.9
Diluted		4.1			11.9

(i)	Adjusted earnings per share (“EPS”) is a non-IFRS measure which aims to reflect Caledonia’s ordinary trading performance. Refer to Section 10 for a discussion of non-IFRS measures

(ii)	The EPS for Q1 2013 has been restated based on the 10: 1 consolidation that took place in April 2013.

Revenues in Q1 2014 were lower than Q1 2013 due mainly to the lower realised gold price: gold sales in Q1 2014 were 12,210 ounces, 246 ounces (i.e. 2%) more than in Q1 2013, but the average realised gold price in Q1 2014 was US$1,288 per ounce – 20% lower than the average realised gold price per ounce in Q1 2013. The royalty paid in the Quarter was lower than the comparative period mainly due to the lower gold price.

Production costs in the Quarter were $8,788,000, representing an on-mine cash cost4 of US$651 per ounce of gold and an all-in sustaining cost4 of US$923 per ounce of gold. Further discussion of production costs is set out in Section 4.4 of this MD&A.

Administrative expenses in the Quarter were $1,847,000 compared to $1,175,000 in the comparative period and are analysed in Note 7 to the Unaudited Condensed Consolidated Financial Statements. The increased administrative expense reflects increased wages and salaries resulting from the strengthening of the management team and professional consulting fees. Caledonia’s management team has been strengthened by the appointment of Dana Roets as Chief Operating Officer in August 2013 and the appointment of an individual to assist in the areas of project management and mine design and an assistant for the CFO.

The foreign currency gain is a non-cash item which reflects the profit or loss arising on the translation into Canadian dollars of the cash balances that are held in currencies other than Canadian dollars.

The taxation expense in the Quarter was lower than the first quarter of 2013 because the tax charge for the first quarter of 2013 included approximately US$1.5 million of withholding tax which was incurred on the distribution in specie of the US$30 million facilitation loans receivable from Blanket’s indigenous partners.

The non-controlling interest is the profit attributable to Blanket’s Indigenous Zimbabwean shareholders and reflects their participation in the economic benefits generated by Blanket from the effective date of the indigenisation and is explained in Note 5 of the Unaudited Condensed Consolidated Financial Statements.

The adjusted earnings per share4 aims to reflect Caledonia’s ordinary trading performance and is calculated on the share of profit attributable to Caledonia shareholders excluding foreign exchange profits.

Risks that may affect Caledonia’s future financial condition are discussed in Section 16 of the MD&A.

The table below sets out the consolidated statements of cash flows for the three months to March 31, 2014 and 2013 prepared under IFRS.

__________________________________

4 Non-IFRS measures such as “on-mine cash cost per ounce”, “all-in sustaining cost per ounce” and “adjusted earnings per share” are used throughout this document. Refer to Section 10 of this MD&A for a discussion of non-IFRS measures.

Condensed Consolidated Statement of Cash Flows (unaudited) (in thousands of Canadian dollars)
		Three months ended March 31
		2014	2013
		$	$
Cash flows from operating activities
Cash generated by operating activities	6,868		5,435
Net interest paid	(41)		(64)
Tax paid	(600)		(3,163)
Net cash from operating activities	6,227		2,208

Cash flows from investing activities
Acquisition of Property, plant and equipment	(2,032)		(1,340)
Net cash used in investing activities	(2,032)		(1,340)

Cash flows from financing activities
Advance dividends paid	-		(969)
Dividends paid	(907)		(2,834)
Proceeds from the exercise of share options	-		182
Net cash from (used in) financing activities	(907)		(3,621)
Net increase/(decrease) in cash and cash equivalents	3,288		(2,753)
Cash and cash equivalents at beginning of the year	23,426		27,942
Cash and cash equivalents at year end	26,714		25,189

Cash generated from operating activities is analysed in note 12 to the Unaudited Condensed Consolidated Financial statements. Cash generated from operating activities was higher in the Quarter compared to the comparable quarter due to lower taxation payments and a small reduction in working capital in the Quarter, compared to a $3.2 million increase in working capital in the comparable quarter. The lower taxation payment reflects the lower taxation expense in the Quarter as discussed above in the review of the Condensed Consolidated Statement of Profit or Loss. Movements in working capital are discussed below in the review of the Condensed Consolidated Statement of Financial Position.

Investment in property, plant and equipment increased from $1.3 million in Q1 of 2013 to $2.0 million. The increase in capital investment was due to the investment in Blanket’s capital projects as described in Sections 4.7 and 5 of this MD&A. An analysis of Caledonia’s capital investment is set out in Section 6 of this MD&A.

The advance dividends paid in the Q1 of 2013 relate to two installments of US$1 million each which were paid to the Gwanda Community Share Ownership Trust (“GCSOT”) in terms of Blanket’s indigenisation transactions. The final tranches of advance dividends were paid in Q2 of 2013 and Blanket has no further obligation to make advance dividend payments.

The dividends paid in the Quarter primarily relate to the quarterly dividend of 1.5 cents per share which was paid by Caledonia on January 30, 2014 in terms of the quarterly dividend policy which was announced in November 2013. The consolidated dividends also includes the dividends that were paid to Blanket’s indigenous shareholders after retentions to repay the facilitation loans as described in Section 4.8 of this MD&A.

At March 31, 2014, Caledonia’s cash was held with banks primarily in the United Kingdom, and also in Canada and in non-resident accounts in South Africa.

The table below sets out the consolidated statements of Caledonia’s financial position at March 31, 2014 and December 31, 2013 prepared under IFRS.

As at	March 31	December 31,
	2014	2013
	$	$

Inventories	6,847	6,866
Prepayments	179	177
Trade and other receivables	3,854	3,889
Cash and cash equivalents	26,714	25,222
Total assets	73,775	69,602
Non-current liabilities	10,622	10,094
Trade and other payables	5,027	4,600
Income taxes payable	1,834	1,138
Bank overdraft	-	1,796
Total liabilities	17,483	17,628
Total equity	56,292	51,974
Total equity and liabilities	73,775	69,602

The increase in non-current assets reflects investment at Blanket to sustain the current level of production, investment in Blanket’s capital projects and investment at Blanket’s satellite properties. Blanket’s capital projects are discussed in section 4.7 of this MD&A; Blanket’s exploration and development projects (i.e. Blanket’s satellite properties) are discussed in section 5 of this MD&A. An analysis of Caledonia’s capital investment is set out in section 6 of the MD&A.

Inventories at March 31 2014 comprise consumable stores, which include the build-up of stock of consumables and other equipment for use at Blanket’s capital projects. Inventories at December 31, 2013 also included $871,000 of gold in progress at December 31, 2013; there was no gold in progress at March 31, 2014.

Trade and other receivables includes Value Added Tax receivable, bullion sales receivables and deposits for stores and equipment as analysed in Note 10 to the Unaudited Condensed Consolidated Financial Statements.

Non-current liabilities comprises a liability for deferred taxation and a provision for rehabilitation at the Blanket and Eersteling5 Mines if and when they are permanently closed. The provision for rehabilitation at Blanket increased as at March 31, 2014 due to a lower discount rate being used. The revised estimate uses a discount rate of 2.75% being a 10 year US Dollar bond yield.

The following information is provided for each of the eight most recent quarterly periods ending on the dates specified. The figures are extracted from underlying unaudited financial statements that have been prepared using accounting policies consistent with IFRS.

(Thousands of Canadian dollars except per share amounts)	June 30, 2012		Sept 30, 2012			Dec 31, 2012		Mar 31, 2013		June 30, 2013		Sept 30 2013		Dec 31, 2013			Mar 31 2014
Revenue from operations		18,612		21,494			17,612		19,218		17,190		16,591		12,114			17,063
Profit/(loss) after tax from operations		5,497		(9,199	)		3,950		5,530		3,055		4,589		(14,354	)		3,091
Earnings/(loss) per share – basic (cents)		11		(14	)		6.4		9		5.8		7.2		(27.7	)		4.7
Earnings/(loss) per share – diluted (cents)		11		(14	)		6.4		9		5.8		7.2		(27.7	)		4.7
Cash and cash equivalents		18,323		24,615			27,942		25,189		22,475		25,099		25,222			26,714

Quarterly results fluctuate materially from quarter to quarter primarily due to changes in production levels and gold prices but also due to the recording of impairments and other unusual costs such as indigenisation. Significant changes relating to prior quarters are discussed in the relevant MD&A’s and financial statements.

4. OPERATIONS AT THE BLANKET GOLD MINE, ZIMBABWE

______________________

5 Eersteling Mine is a South African gold property, which has been held on a care and maintenance basis for several years pending the identification of a purchaser.

4.1	Safety, Health and Environment (“SHE”)

The following safety statistics have been recorded for the Quarter and the preceding six quarters.

Blanket Mine - Safety Statistics
Incident Classification	Q3 2012	Q4 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Q1 2014
Fatal	0	0	0	0	1	0	0
Lost time injury	0	3	2	1	7	2	1
Restricted work activity	7	7	0	7	5	9	6
First aid	4	5	4	2	2	0	3
Medical aid	1	1	2	3	2	3	2
Occupational illness	0	0	0	0	0	0	0
Total	12	16	8	13	17	14	12
Incidents	11	10	12	12	11	17	10
Near misses	3	5	3	4	7	3	2
Disability Injury Frequency Rate (i)	0.00	0.81	0.52	0.25	1.75	0.46	0.24
Total Injury Frequency Rate (ii)	3.04	4.34	2.09	3.25	4.00	3.20	2.86
Man-hours worked (thousands)	688	738	767	801	800	865	840
(i)A measurement of total injuries, deaths and permanent disability occurring per 200,000 man-hours worked. (ii) A measurement of all accidents that have occurred regardless of injury or not expressed per 200,000 man-hours worked. This includes accidents that could have caused injuries.

The reduction in the incidence of total categories of incidents in the Quarter compared to the previous three quarters reflects management’s continued close attention to this area. Blanket management recognises the continued need to reinforce strict adherence to prescribed operating procedures by all employees.

There were no significant adverse environmental issues during the Quarter.

4.2	Social Investment and Contribution to the Zimbabwean Economy

Blanket’s investment in community and social projects which are not directly related to the operation of the mine or the welfare of Blanket’s employees, the payments made to the GCSOT in terms of Blanket’s indigenisation, and payments of royalties, taxation and other duties, charges and fees to the Government of Zimbabwe and its agencies are set out in the table below.

Payments to the Community and the Zimbabwe Government (US$’000’s)
Period	Year	Community and Social Investment	Payments to GCSOT	Payments to Zimbabwe Government	Total
Year 2011	2011	306	-	13,614	13,920
Quarter 1	2012	147	-	3,353	3,500
Quarter 2	2012	38	1,000	5,042	6,080
Quarter 3	2012	108	2,000	6,366	8,474
Quarter 4	2012	123	-	5,808	5,931
Year 2012	2012	416	3,000	20,569	23,985
Quarter 1	2013	5	1,000	4,584	5,589
Quarter 2	2013	2,135	1,000	3,555	6,690
Quarter 3	2013	7	-	3,646	3,653
Quarter 4	2013	-	-	3,569	3,569
Year 2013	2013	2,147	2,000	15,354	19,501
Quarter 1	2014	-	-	2,827	2,827

The final installment of the advance dividend payments that were payable to GCSOT in terms of Blanket’s indigenisation transaction was made in the second quarter of 2013. No further dividends will be payable to GCSOT until the advance dividends have been repaid by the offset of future dividends on Blanket shares that are owned by GCSOT.

4.3	Gold Production

Tonnes milled, average grades, recoveries and gold produced and the average realised price per ounce during the Quarter, the preceding 4 quarters and April 2014 are shown in the table below.

Blanket Mine Production Statistics
	Year	Tonnes Milled (t)	Gold Head (Feed) Grade (g/t Au)	Gold Recovery (%)	Gold Produced (oz)	Average Realised Price per Ounce of Gold Sold (US$/oz)
Year	2012	363,315	4.16	93.7	45,464	1,666
Quarter 1	2013	86,502	4.04	93.3	10,472	1,600
Quarter 2	2013	101,174	3.82	93.2	11,587	1,373
Quarter 3	2013	99,386	4.03	93.6	12,042	1,330
Quarter 4	2013	105,258	3.63	93.1	11,429	1,277
Year	2013	392,320	3.88	93.3	45,527	1,402
Quarter 1	2014	92,846	3.67	93.6	10,241	1,288
April	2014	34,202	3.52	93.9	3,634	1,297

Gold production in the Quarter was lower than preceding quarters due to the lower grade and lower ore throughput. Production in April 2014 was also affected by lower grade and tonnage. Underground production tonnages and grades are discussed further in Section 4.5 of this MD&A.

4.4

Costs

A narrow focus on the direct costs of production (mainly labour, electricity and consumables) does not fully reflect the total cost of gold production. Accordingly, cost per ounce data for the Quarter, the preceding four quarters and for 2012 have been prepared in accordance with the Guidance Note issued by the World Gold Council on June 23, 2013 and is set out in the table below on the following bases:

i.	On-mine Cash Cost per ounce, which shows the on-mine cash costs of producing an ounce of gold;

ii.

All-in Sustaining Cost per ounce, which shows the operating cost per ounce plus additional costs incurred outside the mine (i.e. at offices in Harare, Johannesburg and Toronto) and the costs associated with maintaining the operating infrastructure and resource base (i.e. “Sustaining Capex”) that are required to maintain production at the current levels; and

iii.	All-in Cost per ounce, which shows the all-inclusive Sustaining cost per ounce plus the additional costs associated with activities that are undertaken with a view to increasing production.

Blanket Mine – Costs US$/ounce
	Year 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Year 2013	Q1 2014
On-Mine cash cost (ii)	570	652	587	558	666	613	651
Royalty(i)	116	112	96	93	69	101	89
Community costs relating to ongoing production	-	-	-	-	-	-	-
Permitting costs related to current operations	5	2	3	3	3	3	2
3rd party smelting, refining and transport costs	6	7	7	7	6	7	1
Operating cost per ounce	698	774	692	660	745	724	743
Corporate general and administrative costs (incl. share based remuneration)	90	97	113	93	207	124	132
Reclamation and remediation of operating sites	2	2	2	2	5	2	2
Exploration and study costs	-	1	1	2	5	2	3
Capital expenditure	67	51	147	110	213	125	43
All-in Sustaining Cost per ounce (ii)	857	924	956	866	1,175	977	923
Costs not related to current production
Community costs	25	-	181	8	-	49	-
Permitting costs	17	3	3	3	1	2	1
Exploration and study costs	-	1	3	3	4	3	3
Capital expenditure	29	45	69	107	97	78	107
All-in Cost per ounce	929	972	1,211	986	1,277	1,109	1,034
(i)Blanket pays a royalty to the Zimbabwean government at 7% on gross revenue. (ii)Non-IFRS measures such as “On-Mine Cash Cost per Ounce”, “All-in Sustaining Cost per Ounce” and “All-in Cost per Ounce” are used throughout this document. Refer to Section 10 of this MD&A for a discussion of non-IFRS measures.

The on-mine cash cost per ounce of gold sold is calculated on the basis of sales and not production. On mine cash costs decreased in the Quarter due to the inclusion of 1,969 ounces of work in progress which was brought forward from the previous quarter at a carrying cost of $411 per ounce.

4.5	Underground

AR South continued to be the most important production area during the Quarter with ore being trammed on the 630 and 750 meter haulages. Production tonnages from all areas except AR South was at or above planned levels in the Quarter. Approximately 80% of production is transported on the level 18 and 22 haulages which are now approaching full capacity. Mine management is investigating the potential development of Lima and AR Main above 510 level, from which any production could be transported on the 14 Level haulage to the mid-shaft loading point. Production in February 2014 was also adversely affected by an unstable mains power supply and the unscheduled requirement to replace the winding rope on No. 4 Shaft. In the weeks while the new ropes were in transit from Europe, hoisting was restricted to half speed and hoisting was suspended completely for three days in early March 2013 whilst the new Lebus type coiling sleeves were fitted to the winder drums and the new winding ropes were successfully installed and commissioned.

The achieved ore grade in the Quarter was affected by external and internal dilution. External dilution was largely caused by ring drilling in longhole stopes which resulted in sloughing of the stope sidewall. Management is re-considering the continued use of this mining method. Internal dilution was mainly due to low grade and barren patches within the orebodies. Where possible, such areas are excluded from mining however this is not always possible without affecting the ability to extract ore in areas above the low grade area. Management believes that an average head grade of approximately 3.60 g/t Au can be maintained, although closer attention will be paid to grade control in future.

Underground development activities continued throughout the Quarter and the total development advance was 1,392 meters compared to a planned advance of 1,628 meters and an advance of 1,427 meters in the preceding quarter. Installation of the new Centac compressor has been stalled by the inability of the Zimbabwe Electricity Transmission and Distribution Corporation (“ZETDC”), the state-owned electricity distribution company, to service their faulty transformer and equipment. Blanket has repeatedly offered to undertake this service and maintenance itself, but ZETDC is unwilling to accept this offer.

Development has been planned such that it should allow mine production to catch up the shortfall in milled tonnage that was experienced in the first four months of 2014 and for production to be sustained at the target rate of approximately 1,200 tonnes per day (“tpd”) for 2014 and 1,300tpd in 2015.

4.6	Metallurgical Plant

During the Quarter, the metallurgical plant continued to operate at better than budgeted efficiency. Gold recovery was 93.6% compared to the planned rate of 93.0% and despite the lower feed grade. All equipment operated to expectations and no significant unplanned downtime was experienced during the Quarter.

4.7 Capital Projects

The main capital developments are:

the haulage extension on 22 Level from AR Main to Lima;

the northern extension on 18 Level haulage to Lima;

the 14 Level haulage extension between the Eroica and Lima; and

the No. 6 Winze Shaft Deepening Project to the 1,080 meter level.

Further information on each of these Projects is set out below; an analysis of the expenditure on each of the main investment projects is set out in Section 6 of this MD&A.

22 Level Haulage Extension Project

The 22 Level haulage extension project will link the Blanket and Lima Sections on the 22 Level (750 meters below surface) and will allow for the rapid commencement of mining in any new mining areas defined above 750 meters. Crosscuts from the 22 Level Haulage are also being developed to provide the required drilling platforms for the exploration drilling below 750 meters for resource evaluation purposes. Work on the 22 Level Haulage extension project and its associated crosscuts is being carried out simultaneously with normal mining production.

During the Quarter, the 22 Level haulage advanced a further 153 metres towards Lima (158 meters in the preceding quarter) against a plan of 148 meters. This haulage reached the Eroica Section in early December 2013. Exploration drilling into the Eroica zone has identified the targeted mineralised zone.

The crosscut from the 750 meter haulage towards the AR Main drilling chambers advanced 68 meters against a plan of 34 meters. The crosscut to the AR Main zone and the diamond drilling chamber were completed. Two holes were drilled into the AR Main target zone both of which intersected mineralisation and a further hole is in progress.

18 Level Haulage Extension Project

The 18 Level haulage extension (630 meters below surface) was planned to provide access to explore for the extension of the Sheet zone between 630 meters and 510 meters below surface. The haulage reached its destination in the second quarter of 2013 and diamond drilling to locate a possible down-dip extension to the Sheet ore body has commenced.

Some exploration drilling below 750 meters is also being carried out from 18 Level, in addition to the planned exploration from 22 Level. During the Quarter two further exploration holes were drilled into the Blanket zone below 750 meters both of which intersected mineralisation.

14 Level Haulage Project

The 14 Level Haulage between Eroica and Lima (510 meters below surface) reached the position of the Lima Section in the second quarter of 2013. Exploration and development work has commenced in the Lima Section above 14 Level with the objective of upgrading the current indicated and inferred mineral resources to mineral reserves. The ability to upgrade the mineral resources in this area to mineral reserves is an important part of Blanket Mine’s strategy to increase mining production in future years. Note that Blanket Mine reports mineral resources exclusive of mineral reserves and that mineral resources have no demonstrated economic viability. It is anticipated that production activities at Lima above the 510 meter level will commence in the second quarter of 2014.

No. 6 Winze Project

The No. 6 Winze project will provide access to the Blanket 2 Ore Body below 22 Level by upgrading and deepening, the existing No. 6 Winze. The pre-production capital cost of this project is estimated to be US$4 million, which will be funded from Blanket’s internal cash flows. Work on this project continues: a crew which specialises in mechanised shaft sinking has commenced work and will be responsible for the high-speed sinking of the shaft. Exploration drilling during the Year has located the Blanket 4 Ore Body on strike of the 2 Ore Body, which adds substantially to the strike of mineralized zones present in this area and which can be fully evaluated using the access gained via the No. 6 Winze.

The 22 Level Haulage Project, the 18 Level Haulage Project, the 14 Level Haulage Project and the No.6 Winze Projects are all intended to open up areas for further exploration. Accordingly, none of these projects is the subject of a new technical report

4.8 Indigenisation

Transactions that implemented the Indigenisation of Blanket were completed on September 5, 2012 following which Caledonia owns 49% of Blanket and has received a Certificate of Compliance from the Government of Zimbabwe which confirms that Blanket is fully compliant with the Indigenisation and Economic Empowerment Act.

As a 49% shareholder Caledonia receives 49% of Blanket’s dividends plus the repayment of vendor facilitation loans which were extended by Blanket to certain of the Indigenous Shareholders and which carry interest at LIBOR plus 10%. The vendor facilitation loans are repaid by way of dividends from Blanket Mine. 80% of the dividends declared by Blanket Mine which are attributable to the beneficiaries of the vendor facilitation loans are used to repay such loans and the remaining 20% unconditionally accrues to the respective Indigenous Shareholders.

The outstanding balance of the facilitation loans as at December 31, 2013 was US$30.67 million (December 31, 2012, US$30.75 million). The vendor facilitation loans are not shown as receivables in Caledonia’s Audited Financial Statements because in terms of accounting standards, these loans are effectively equity instruments as their only means of repayment is via dividend distributions from Blanket. Caledonia continues to consolidate Blanket for accounting purposes. Further information on the accounting effects of indigenisation at Blanket is set out in Note 5 to the Audited Financial Statements and in a Frequently Asked Questions page which is available on Caledonia’s website.

As an indigenised entity, Blanket can implement its long term growth strategy. The Blanket board, which includes representatives of the Indigenous Zimbabwean shareholders, has approved a capital investment programme for 2014 to 2017. This investment programme, which was endorsed by the Board of Directors of Caledonia, will be funded from Blanket’s internally generated cash, and is expected to result in progressive increases in gold production.

4.9	Opportunities

·	Indigenisation: following the implementation of the indigenisation agreement set out in Section 4.8 of this MD&A Blanket, as a fully indigenised entity and with new strategic indigenous shareholders, may be able to take advantage of growth opportunities that could arise in Zimbabwe.

·	Increased production: Blanket’s existing reserves and resources could support a further increase in production, provided the necessary investments in resource development can be made.

Surplus capacity: The Blanket Mine currently has a daily average mining capacity of over 1,200tpd; the hoisting capacity is approximately 3,000tpd; the crushing and milling plant has the capacity to process approximately 1,450tpd (increasing to approximately 3,000tpd after scheduled investment) and the Carbon-in-Leach plant has capacity of 3,800 tonnes per day. It is believed that there would be sufficient capacity to process any additional throughput arising from an increase in mining production with moderate capital investment and incurring only consumable costs to treat any increased throughput.

Exploration success: Blanket’s main exploration objectives are the 22 Level Haulage Project and the related exploration of the down-dip extensions of the known mineralised zones and the satellite exploration projects at the GG Project and the Mascot Project Area. Depending on future exploration success, Blanket may be able to further increase its targeted production levels.

4.10 Outlook

The surplus capacity of the Blanket leach section and crushing and milling plant enables it to immediately treat additional feed material.

There is upward pressure on costs, taxes and regulatory fees in Zimbabwe and the regulatory environment is subject to unexpected adverse changes. Nevertheless, Blanket has surplus metallurgical plant capacity and is sufficiently cash generative so that, if the investment climate is acceptable, it could invest in projects with a view to further increasing production, thereby helping to maintain downward pressure on the cost per ounce of gold produced at Blanket Mine.

The average mined grade is expected to be between 3.6 g/t and 3.7 g/t Au instead of 3.84g/t for the next two quarters. Although waste mining has, in part, been responsible for dilution, an increase in unavoidable internal dilution due to low grade lenses within the ore zone is expected to put downward pressure on the mined grade for the coming months. Blanket management will pay close attention to minimising grade dilution. The lower average mined grade is expected to be reflected in a lower average feed grade of material into the metallurgical plant.

5 EXPLORATION AND PROJECT DEVELOPMENT

Caledonia’s primary exploration activities are undertaken by the Blanket Mine and are discussed in Section 4.7 of this MD&A. Blanket Mine also has exploration title holdings in the form of registered mining claims in the Gwanda Greenstone Belt totalling 78 claims, including a small number under option, covering properties with a total area of about 2,500 hectares. Blanket’s main exploration efforts on these satellite properties are focused at this stage on the GG Project and the Mascot Project Area (which comprises three former mining operations i.e. Mascot, Eagle Vulture and Penzance) which are believed to have the greatest potential of success.

GG Project

The GG Project is located approximately seven kilometers southeast of Blanket Mine. Surface drilling programs have been carried out at the GG Project over the past eight years consisting of seventeen diamond-cored holes totalling 4,751m of drilling. Two zones of gold mineralization warranting further exploration have been established down to a depth of at least 300m, each with a potential strike length of up to 150m.

During the Quarter the development on 120 meter level was completed to its planned end, which is approximately 160 meters east of the shaft. Four drill cubbies have been completed from which horizontal and inclined holes have been drilled into the two zones (North and South zones) that were identified by surface drilling and which intersected the identified zones, with the North zone being the better developed. It is intended to develop further into the North zone so that further geological and metallurgical work can be done. Thereafter it is intended to sink the shaft by a further 120 meters with the objective of carrying out further exploration.

Two raises have been developed from 120 meter level to the 60 meter level which will be used to handle both waste rock and ore-grade material from future sub-level development.

Metallurgical test work continues on fresh material from this project. The preliminary indications are that material from the GG Project is not compatible with Blanket’s metallurgical plant. Exploration work will continue with the objective of identifying the extent and characteristics of mineralisation at the GG Project so that an assessment can be made of the optimal processing methodology for material from the GG Project.

Mascot Project Area

Mascot was previously mined down to approximately 300 meters, exploiting an east-west trending mineralised body the extent of which decreased at depth. Previous surface drilling undertaken by Blanket has indicated the existence of two further mineralised zones, to the north and south of the mined out area. Underground development on Levels 1 and 2 (60m and 90 meters below surface respectively) has confirmed the existence of mineralisation in the North zone. A drilling programme was also initiated to test the main Mascot shear below the deepest workings. Two holes were drilled, both intersecting a mineralised zone approximately 60 meters below the known bottom of the old workings. Drilling will continue on a success-driven basis to test the lateral extent of the main Mascot shear. Water which is required for mining at Mascot is currently extracted from the lower levels of Mascot which remain flooded. An alternative source of water will be required if the lower levels are de-watered prior to development in these areas. A ground water survey will be conducted in the forthcoming winter with a view to drilling water boreholes.

Sabiwa Project

Further work on Sabiwa is currently on hold pending an improvement in the Zimbabwean investment climate before further significant expenditure is incurred.

INVESTING

An analysis of Investment in the Quarter, the preceding four quarters and 2013 and 2012 is set out below

Capital Investment
		2012 Year	2013 Q1	2013 Q2	2013 Q3	2013 Q4	2013 Year	2014 Q1
Total Investment	C$’000	7,909	1,340	3,768	3,362	3,268	11,738	2,032
Nama Project (i)	C$’000	3,614	189	1,366	785	297	2,637	-
Blanket (i)	C$’000	4,280	1,148	2,400	2,576	2,942	9,066	2,032
Blanket (ii)	US$’000	4,352	1,139	2,503	2,607	2,933	9,181	1,841
Sustaining Capex	US$’000	3,046	606	1,709	1,322	2,016	5,653	538
Satellites	US$’000	1,103	390	488	338	383	1,599	628
750 Haulage	US$’000	202	97	151	95	87	430	142
No. 6 Winze	US$’000	-	33	43	42	220	336	533
Mill Building	US$’000	-	14	112	810	227	1163	-
Total Blanket	US$’000	4,352	1,139	2,503	2,607	2,933	9,181	1,841
(i)Nama is a copper-cobalt exploration project in Zambia which was fully impaired as at December 31, 2013. (ii)Excludes inter-company profit (iii) Includes inter-company profit

All investment at Blanket is funded from Blanket’s internal cash flows

FINANCING

Caledonia financed all its operations using funds on hand and those generated by its operations. No equity financing took place in the Quarter and none is currently planned. Blanket has an unsecured US$2.5 million loan facility in Zimbabwe which is repayable on demand. At March 31, 2014 this facility was undrawn.

8.	LIQUIDITY AND CAPITAL RESOURCES

An analysis of Caledonia’s capital resources as at March 31, 2014 and each of the preceding 5 quarters is set out below.

Liquidity and Capital Resources (Thousands of Canadian dollars)
As at	Dec 31 2012	Mar 31 2013	June 30 2013	Sept 30 2013	Dec 31 2013	Mar 31 2014
Gross Cash and cash equivalents	27,942	25,189	22,475	25,099	25,222	26,714
Overdraft	-	-	-	1,204	1,796	-
Cash and cash equivalents (IFRS)	27,942	25,189	22,475	23,895	23,426	26,714
Working capital	26,014	28,327	27,257	29,389	28,620	31,380

Movements in Caledonia’s net cash, the overdraft and working capital and an analysis of the sources and uses of Caledonia’s cash are discussed in Section 3 of this MD&A.

Of the cash and cash equivalents, over $26 million is held outside Zimbabwe at financial institutions in Canada, the United Kingdom and in non-resident accounts in South Africa. The overdraft facility is held by Blanket with a Zimbabwean Bank and is unsecured and repayable on demand.

The Company’s liquid assets as at March 31, 2014 exceed its planned and foreseeable commitments as set out in Section 9 of this MD&A.

9.	OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES

There are no off balance sheet arrangements apart from the facilitation loans of US$30.872 million which are not reflected as loans for IFRS purposes (refer Note 5 of the Unaudited Consolidated Financial Statements). The company has the following contractual obligations at March 31, 2014.

Payments due by Period (Thousands of Canadian dollars)
Falling due	Within 1 year	1-3 Years	4-5 Years	After 5 Years	Total
Current liabilities	6,214	-	-	-		6,214
Purchase obligations	178	Nil	Nil	Nil		178

In addition to the committed purchase obligations set out above, Blanket intends to invest approximately US$33 million between May 14, 2014 and December 2017 which is not yet committed. The committed and uncommitted investment will be used to maintain Blanket’s existing operations and capital projects and the satellite projects which are discussed in Sections 4.7 and 5.3 of this MD&A respectively. Committed and uncommitted purchase obligations will be met from the cash generated from Blanket’s existing operations. Caledonia has no obligations in respect of capital or operating leases. As of March 31, 2014, Caledonia had potential liabilities for rehabilitation work on the Blanket and Eersteling Mines6 – if and when those mines are permanently closed – at an estimated cost of $2,094,000 ($1,572,000 – 2013).

10.	NON-IFRS MEASURES

Throughout this document, we have provided measures prepared in accordance with IFRS in addition to some non-IFRS performance measures for investors who use them to evaluate our performance. Since there is no standard method for calculating non-IFRS measures, they are not a reliable way to compare Caledonia against other companies. Non-IFRS measures should be used along with other performance measures prepared in accordance with IFRS. We have defined below the non-IFRS measures we have used in this document and provide a reconciliation of such non-IFRS measures to the IFRS measures we report.

Cost per ounce

Non-IFRS performance measures such as “On-Mine cash cost per ounce”, “All-in sustaining cost per ounce” and “All-in cost per ounce” are used in this document. Management believes these measures assist investors and other stakeholders in understanding the economics of gold mining over the life-cycle of a mine. These measures are calculated on the basis set out by the World Gold Council in a Guidance Note published on June 23, 2013 and accordingly differ from the previous basis of calculation. The table below reconciles “On – mine cash cost per ounce”, “All-in sustaining costs per ounce” and “All-in costs per ounce” to the production costs shown in the financial statements which have been prepared under IFRS.

Reconciliation of Cost per Ounce Data to IFRS
	Year 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Year 2013	Q1 2014
Production costs (IFRS) (C$’000’s)	25,653	8,019	6,602	6,872	5,919	27,412	8,788
Less site restoration costs (C$’000’s)	(43)	(25)	(24)	(24)	(78)	(151)	(9)
Less exploration costs (C$’000’)	(831)	(300)	140	(112)	(121)	(393)	(107)
Reversal of claim fee provision (C$’000’s)	-	-	-	-	970	970	-
Reallocated admin costs	(247)	(55)	(103)	(114)	(65)	(337)	49
Realisation charges	-	-	-	-	(284)	(284)	(16)
Non-Blanket production costs	(121)	(24)	(25)	(26)	(27)	(102)	(97)
Inter company profit elimination	1,353	284	375	342	331	1,332	151
Adjusted production costs (C$’000’s)	24,779	7,899	6,965	6,938	6,645	28,447	8,759
Exchange rate (C$/US$)	1.00	1.01	1.03	1.02	1.06	1.03	1.10
On-mine Production costs (US$’000’s )	25,769	7,806	6,797	6,714	6,301	27,619	7,948
Gold Sales (oz)	45,181	11,964	11,588	12,042	9,454	45,048	12,210
On-mine cash cost (US$/oz)	570	652	587	558	666	613	651
Royalty (US$’000’s)	5,262	1,339	1,108	1,120	650	4,544	1,084
Permitting costs (US$’000’s)	225	30	41	32	33	135	30
Refining and 3rd party smelting (US$’000’s)	290	85	76	80	60	301	15
Administrative expenses (C$’000’s) (i)	4,055	1,175	1,347	1,153	2,067	5,742	1,778
Exchange rate	1.00	1.01	1.03	1.02	1.06	1.03	1.10
Administrative expenses (US$’000’s)	4,056	1,161	1,315	1,116	1,960	5,575	1,613
Reclamation and remediation of operating sites (US$’000)	90	21	21	21	45	107	19
Exploration and study costs (US$’000’s)	3	8	15	18	43	85	36
Sustaining capital investment (US$’000’s)	3,044	606	1,709	1,322	2,017	5,653	529
All-in Sustaining cost (US$’000)	38,739	11,055	11,082	10,423	11,108	44,019	11,274
Gold sales (oz)	45,181	11,964	11,588	12,042	9,454	45,047	12,210
All-in sustaining cost per ounce (US$/oz)	857	924	956	866	1,175	978	923
Costs not related to current production
Community costs (US$’000’s)	1,137	-	2,100	100	-	2,200	-
Permitting (US$’000’s)	785	31	31	31	14	106	14
Exploration (US$’000’s)	15	16	30	36	38	120	32
Capital investment (US$’000’s)	1,306	534	795	1,285	917	3,530	1,309
All-in Costs (US$’000’s)	41,981	11,635	14,037	11,875	12,077	49,975	12,627
Gold Sold (oz)	45,181	11,964	11,588	12,042	9,454	45,047	12,210
All-in Costs per ounce (US$/oz)	929	973	1,211	986	1,277	1,109	1,034

______________

6 Eersteling Mine is a South African gold property, which has been held on care and maintenance basis for several years pending the identification of a suitable purchaser.

Average realised gold price per ounce

“Average sales price per ounce” is a non-IFRS measure which, in conjunction with the cost per ounce measures described above, allows stakeholders to assess our performance. The table below reconciles “Average sales price per ounce” to the Revenue shown in the financial statements which have been prepared under IFRS.

Reconciliation of Average Realised Gold Price per Ounce to IFRS
	Year 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Year 2013	Q1 2014
Revenue (IFRS) (C$’000’s)	75,221	19,218	17,190	16,591	12,114	65,113	17,063
Less miscellaneous income	-	-	(947)	-	-	(947)	-
Revenue from precious metal sales (C$’000s)	75,221	19,218	16,243	16,591	12,114	65,113	17,063
Exchange rate (C$/US$)	1.002	0.996	0.980	0.965	1.00	0.97	1.10
Revenue from precious metal sales (US$’000’s)	75,340	19,148	15,922	16,013	12,133	63,216	15,733
Revenues from sales of silver (US$’000s)	(72)	(5)	(15)	-	(57)	(78)	(3)
Revenues from sales of gold (US$’000s)	75,268	19,143	15,907	16,013	12,076	63,138	15,730
Gold ounces sold	45,181	11,965	11,587	12,042	9,454	45,048	12,210
Average realised gold price per ounce (US$)	1 666	1 600	1 373	1,330	1,277	1,402	1,288

Adjusted earnings per share

“Adjusted earnings per share” is a non-IFRS measure which management believes assists investors in understanding the company’s underlying performance. The table below reconciles “adjusted earnings per share” to the Profit/Loss attributable to Owners of the Company shown in the financial statements which have been prepared under IFRS.

Reconciliation of Adjusted Earnings per Share to IFRS Profit/(Loss) Attributable to Owners of the Company (C$’000’s except per share numbers)
	Year 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Year 2013	Q1 2014
Profit/(loss) attributable to owners of the company (IFRS)	8,721	4,593	3,055	3,733	(14,436)	(3,055)	2,425
Blanket Mine Employee Trust adjustment (refer Note 18 to the Consolidated Financial Statements)	-	-	-	-	(105)	(105)	(35)
Add back amounts attributable to owners of the company in respect of:
Indigenisation expenses, advance dividends, donations etc.	16,034	-	1,640	-	-	1,640	-
Foreign exchange (profit)/loss	3	-	-	-	(1,677)	(1,677)	(257)
Asset impairment	330	-	-	-	14,203	14,203	-
Deferred tax	271	-	-	54	2,131	2,185	-
Withholding tax on distributions in specie	-	1,531		-	-	1,531	-
Adjusted profit	25,358	6,124	4,695	3,787	116	14,722	2,133
Weighted average shares (m)	50.8	51.5	51.8	52.1	52.1	51.5	52.1
Adjusted eps (cents)	49.9	11.9	9.1	7.3	0.2	28.3	4.1

11.	RELATED PARTY TRANSACTIONS

Caledonia had the following related party transactions which are recorded on the basis of IFRS:

	Three months ended March 31, 2014	Three months ended March 31, 2013
	$’000	$’000
Rent paid to Bastian Investments CC, a company owned by members of the President’s family for the rental of the Company’s Johannesburg office facilities. The rental tenancy is on a monthly basis.	9	10

12.	CRITICAL ACCOUNTING POLICIES

Caledonia's accounting policies are presented in the unaudited consolidated financial statements for the period ended March 31, 2014 which have been publicly filed on SEDAR at www.sedar.com. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the amounts represented in the consolidated financial statements and related disclosures. Use of available information and the application of judgement are inherent in the formation of estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the following notes:

i) Indigenisation transaction

The indigenisation transaction of the Blanket Mine (1983)(Private) Limited (“Blanket Mine”) required management to make significant judgements and assumptions which are explained in Note 5 of the Annual Financial Statements that are available on SEDAR at www.sedar.com

ii) Site restoration provisions

The site restoration provision has been calculated for the Blanket Mine based on an independent analysis of the rehabilitation costs as performed in 2012 and based on the internal assessment for Eersteling Gold Mining Corporation Limited. Estimates and assumptions are made when determining the inflationary effect on current restoration costs and the discount rate to be applied in arriving at the present value of the provision. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation costs which will reflect the market condition at the time the rehabilitation costs are actually incurred. The final cost of the currently recognized site rehabilitation provisions may be higher or lower than currently provided for.

iii) Exploration and evaluation (“E&E”) expenditure

The application of Caledonia’s accounting policy for exploration and evaluation expenditures requires judgements when determining which expenditures are recognised as exploration and evaluation assets (“E&E properties”).

Caledonia also makes estimates and assumptions regarding the possible impairment of E&E properties by evaluating whether it is likely that future economic benefits will flow to Caledonia, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalized is written off in profit or loss in the period the new information becomes available.

iv) Income taxes

Significant estimates and assumptions are required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Caledonia records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

Caledonia also applies judgement in recognizing deferred tax assets relating to tax losses carried forward to the extent that there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized or sufficient estimated taxable income against which the losses can be utilized. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

v) Share-based payment transactions

Caledonia measures the cost of equity-settled, share based payment transactions with employees, directors as well as with Indigenisation Shareholders (refer note 5 and 21 of the Annual Financial Statements) by reference to the fair value of the equity instruments on the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the appropriate valuation model, considering the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield.

Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of Caledonia’s stock options.

vi) Impairment

At each reporting date, Caledonia determines if impairment indicators exist, and if present, performs an impairment review of the non-financial assets held in Caledonia. The exercise is subject to various judgemental decisions and estimates. Financial assets are also reviewed regularly for impairment.

vii)	Functional currency

The functional currency of each entity in Caledonia is determined after considering various primary and secondary indicators which require management to make numerous judgement decisions. The determination of the functional currency has a bearing on the translation process and ultimately the foreign currency translation reserve.

13.	FINANCIAL INSTRUMENTS

Credit risk

The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure.

The trade receivable relate to gold bullion sold to Fidelity Printers and Refiners before quarter end. The amount was settled in April 2014.

Impairment losses

None of the trade and other receivables is past due at the year-end date.

Liquidity risk

All trade payables and bank overdraft have maturity dates that are expected to mature in under 6 months.

Currency risk

As Caledonia operates in an international environment, some of Caledonia’s financial instruments and transactions are denominated in currencies other than the Canadian Dollar. The results of Caledonia’s operations are subject to currency transaction risk and currency translation risk. The operating results and financial position of Caledonia are reported in Canadian dollar in Caledonia’s consolidated financial statements.

The fluctuation of the Canadian dollar in relation to other currencies will consequently have an impact upon the profitability of Caledonia and may also affect the value of Caledonia’s assets and liabilities and the amount of shareholders’ equity.

Caledonia has certain financial assets and liabilities denominated in foreign currencies. Caledonia does not use any derivative instruments to reduce its foreign currency risks. To reduce exposure to currency transaction risk, Caledonia maintains cash and cash equivalents in the currencies used by Caledonia to meet short‐term liquidity requirements.

Interest rate risk

Interest rate risk is the risk borne by an interest-bearing asset or liability due to changes in interest rates. Unless otherwise noted, it is the opinion of management that Caledonia is not exposed to significant interest rate risk as it has no debt financing apart from short term borrowings in Zimbabwe. Caledonia’s cash and cash equivalents include highly liquid investments that earn interest at market rates. Caledonia manages its interest rate risk by endeavouring to maximize the interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. Caledonia’s policy focuses on preservation of capital and limits the investing of excess funds to liquid term deposits in high credit quality financial institutions.

14.	DIVIDEND POLICY AND OTHER SHAREHOLDER INFORMATION

Caledonia paid its inaugural dividend of 5 Canadian cents per share in February 2013 following a capital re-structure which was approved by shareholders in January 2013 which allowed it to make dividend payments. The inaugural dividend did not relate to any specific accounting period. Caledonia paid a further dividend of 5 Canadian cents per share in April 2013 in respect of the earnings for the year to December 31, 2012

On November 25, 2013 Caledonia announced a revised dividend policy pursuant to which it intends to pay a dividend of 6 Canadian cents per share in 2014, split into 4 equal quarterly payments of 1.5 Canadian cents per share. The first quarterly dividend was paid on January 31, 2014; the second quarterly dividend was paid on April 30, 2014. Caledonia will continue to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take advantage of any further opportunities that may arise without the need to raise third party finance.

Effective December 5, 2013 Caledonia appointed Computershare as its Transfer Agent in Canada and as the Registrar. Following the appointment of Computershare, shareholders in the USA and UK now receive their dividends denominated in US Dollars and Pounds Sterling respectively; all other shareholders will be paid in Canadian dollars. Computershare also offers DRS services for Caledonia shareholders who do not wish to hold their shares in nominee accounts in the name of their financial adviser or stock-broker. Shareholders who wish to participate in the DRS should contact Computershare using the contact details set out below:

Computershare Canada and USA	Toll-free North American Number 1-800-564-6253 For Shareholders outside North America 1-514-982-7555
Computershare UK	+44 (0)870 702 0000

On April 12, 2013, the one-for-ten share consolidation was implemented pursuant to the special resolution passed at the special meeting of Caledonia shareholders held on January 24, 2013.

15.	SECURITIES OUTSTANDING

As at May 14, 2014 the following securities 52,117,908 common shares were outstanding. Outstanding options to purchase Common Shares (“Options”) are as follows:

Number of Options	Exercise Price ($)	Expiry Date (1)
21,000	0.70	April 29, 2014
1,646,000	1.30	Jan 31, 2016
30,000	0.70	May 11, 2016
930,920	0.90	Aug 31, 2017
190,000	0.72	Nov 21, 2018
2,817,920

(1)	Options expiring during a “closed period” will have the expiry date extended, in terms of the option plan, by 10 days following the cancellation of the closed period.

As Caledonia’s Option Plan allows the granting of options for the number of Common Shares equal to 10% of the issued shares, Caledonia could grant Options on a further 2,363,817 shares.

16.	RISK ANALYSIS

The business of Caledonia contains significant risk due to the nature of mining, exploration and development activities. Risks such as interest rate, foreign exchange and credit risks are considered in Notes 6 and 24 to the Consolidated Financial Statements. Caledonia’s business contains significant additional risks due to the jurisdictions in which it operates and the nature of mining, exploration and development. Included in the risk factors below are details of how management seeks to mitigate the risks where this is possible.

·	Liquidity risk: The Company needs to generate capital to be able to continue to invest in properties and projects without raising third party financing. Caledonia currently has significant cash resources and continues to generate sufficient cash to cover all of its anticipated investment needs.

Exploration Risk: The Company needs to identify new resources to replace ore which has been depleted by mining activities and to commence new projects. Blanket has embarked on development and exploration programmes as set out in sections 5.7 and 6. No assurance can be given that exploration will be successful in identifying sufficient mineral resources of an adequate grade and suitable metallurgical characteristics that are suitable for further development or production.

Development Risk: The Company is engaged in development activities at Blanket Mine and the Satellite properties. Construction and development of projects are subject to numerous risks including: obtaining equipment, permits and services; changes in regulations, currency rate changes; labour shortages; fluctuations in metal prices and the loss of community support. There can be no assurance that construction will commence or continue in accordance with the current expectations or at all.

Production Estimates: Estimates for future production are based on mining plans and are subject to change. Production estimates are subject to risk and no assurance can be given that future production estimates will be achieved. Actual production may vary from estimated production for a variety of reasons including un-anticipated variations in grades, mined tonnages and geological conditions, accident and equipment breakdown, changes in metal prices and the cost and supply of inputs and changes to government regulations.

Mineral Rights: The Company’s existing licences and permits are in good standing. The Company has to pay fees etc. to maintain its rights and licence. No assurance can be given that the Company will be able to make payments by the required date or will meet development and production schedules that are required to protect licences.

Metal Prices: The Company’s operations and exploration and development projects are heavily influenced by the prices of gold, which is particularly subject to fluctuation. Caledonia has not adopted any strategies to control the effect of mineral price fluctuations because the Company’s cash resources currently exceed its planned and foreseeable commitments as set out in Section 9.

Increasing input costs: Mining companies generally have experienced higher costs of steel, reagents, labour and electricity and from local and national government for levies, fees, royalties and other direct and indirect taxes. Blanket’s planned growth should allow the fixed cost component to be absorbed over increased production, thereby helping to alleviate somewhat the effect of any further price increases.

Illegal mining: There has been an increase in illegal mining activities on properties controlled by Blanket. This gives rise to increased security costs and an increased risk of theft and damage to equipment. Blanket has received adequate support and assistance from the Zimbabwean police in investigating such cases.

Succession planning: The limited availability of mining and other technical skills and experience in Zimbabwe and the difficulty of attracting appropriately skilled employees to Zimbabwe creates a risk that appropriate skills may not be available if, for whatever reason, the current skills base at the Blanket Mine is depleted. The Caledonia management team has recently been augmented so that, if required, it could provide appropriate support to Blanket if this was required.

Country risk: The commercial environments in which the Company operates is unpredictable. Potential risks may arise from unforeseen changes in government policies and regulations relating to exploration and mining activity, military repression and civil disorder, all or any of which may have a material adverse effect on operations and/or the ability of Caledonia to receive payments. Management believes that it has minimised such risks by complying fully with all relevant legislation and by obtaining all relevant regulatory permissions and approvals.

Gold marketing arrangements: In terms of regulations introduced by the Zimbabwean Ministry of Finance in January 2014, all gold produced in Zimbabwe must be sold to Fidelity Printers and Refiners Limited (“Fidelity”), a company which is controlled by the Zimbabwean authorities. Accordingly, all of Blanket’s production has been sold to Fidelity. Blanket has received all payments due from Fidelity in full and on time. However the requirement to sell to Fidelity increases Blanket’s credit risk because Fidelity has failed to pay Blanket in the past.

17. FORWARD LOOKING STATEMENTS

Information and statements contained in this MD&A that are not historical facts are “forward-looking information” within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to, Caledonia’s current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “target”, “intend”, “estimate”, “could”, “should”, “may” and “will” or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this MD&A include: production guidance, estimates of future/targeted production rates, planned mill capacity increases, estimates of future metallurgical recovery rates and the ability to maintain high metallurgical recover rates, timing of commencement of operations and Caledonia’s plans and timing regarding further exploration, drilling and development, the prospective nature of exploration and development targets, the ability to upgrade and convert mineral resources to mineral reserves, capital costs, our intentions with respect to financial position and third party financing and future dividend payments. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions 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, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralization being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, changes in government regulations, legislation and rates of taxation, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.

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. Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, power outages, explosions, landslides, cave-ins and flooding), risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations; relationships with and claims by local communities and indigenous populations; political risk; availability and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs; global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with un-anticipated economic or other factors, risks of increased capital and operating costs, we are affected by environmental, safety or regulatory risks, expropriation, the Company’s title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. 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. Caledonia reviews forward-looking information for the purposes of preparing each MD&A, however Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

18.

CONTROLS

Caledonia maintains adequate systems of internal accounting and administrative controls, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information is produced.

Segregation of Duties

Management has concluded, and the Audit Committee has agreed that the hiring of additional staff needs to be constantly addressed and assessed in light of risks to ICOFR and the costs associated with additional staff. There have been no changes in the Corporation’s internal controls over financial reporting since the year ended December 31, 2013, that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

The Corporation has a Disclosure Committee consisting of six Directors, and has disclosure controls and procedures which it follows in an attempt to ensure that it complies with all required disclosures on an adequate and timely basis. The Corporation’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 all of the applicable rules, regulations 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.

19.	QUALIFIED PERSON

Dr. Trevor Pearton, B.Sc. Eng. (Mining Geology), Ph.D. (Geology), Pr.Sci.Nat., F.G.S.S.A., VP Exploration is the Corporation’s qualified person as defined by NI 43-101. Dr. Pearton is responsible for the technical information provided on this MD&A except where otherwise stated.

Exhibit 99.3

FORM 52-109F2R

CERTIFICATION OF REFILED INTERIM FILINGS

This certificate is being filed on the same date that Caledonia Mining Corporation (the “issuer”) has refiled its interim financial statements and MD&A for the period ended March 31, 2014.

I, Stefan Edward Hayden, Chief Executive Officer of Caledonia Mining Corporation, certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of the issuer for the interim period ended March 31, 2014.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is an internally developed framework considered appropriate for our group.

5.2

N/A

5.3

N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2014 and ended on March 31, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 12, 2014

“Stefan Edward Hayden”

____________________

Stefan Edward Hayden

Chief Executive Officer

Exhibit 99.4

FORM 52-109F2R

CERTIFICATION OF REFILED INTERIM FILINGS

This certificate is being filed on the same date that Caledonia Mining Corporation (the “issuer”) has refiled its interim financial statements and MD&A for the period ended March 31, 2014.

I, Steven Roy Curtis, Chief Financial Officer of Caledonia Mining Corporation, certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of the issuer for the interim period ended March 31, 2014.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is an internally developed framework considered appropriate for our group.