INDEPENDENT QUALIFIED PERSON’S REPORT BLANKET MINE, ZIMBABWE Prepared for: Caledonia Mining Corporation Unit #9 2145 Dunwin Drive Mississauga Ontario Canada Prepared by: Applied Geology Services cc 5 Coombe Place Rivonia Sandton Johannesburg South Africa July 2006 2 TABLE OF CONTENTS 1 INDEPENDENT QUALIFIED PERSON’S REPORT..............................................1 2 TABLE OF CONTENTS...................................................................................................2 3 SUMMARY ...........................................................................................................................5 4 INTRODUCTION AND TERMS OF REFERENCE ................................................9 4.1 Scope of the Report........................................................................................9 4.2 Principal Sources of Information...................................................................9 4.3 Qualifications and Experience .....................................................................10 4.4 Independence ...............................................................................................10 5 DISCLAIMER ....................................................................................................................10 6 PROPERTY DESCRIPTION AND LOCATION .....................................................13 6.1 Area and Location........................................................................................13 6.2 Tenure ..........................................................................................................14 7 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE and PHYSIOGRAPHY......................................................................................................................18 7.1 Topography and Accessibility .....................................................................18 7.2 Climate and Weather....................................................................................18 7.3 Vegetation....................................................................................................18 7.4 Local Population and Transport Systems ....................................................19 7.5 Operational Resources.................................................................................19 8 HISTORY............................................................................................................................20 8.1 Production History.......................................................................................20 8.2 Ore Resource and Reserve Disclosures .......................................................21 9 GEOLOGICAL SETTING.............................................................................................22 9.1 Gwanda Greenstone Belt .............................................................................22 9.2 Local Property Geology...............................................................................24 10 DEPOSIT TYPES..............................................................................................................25 11 MINERALISATION.........................................................................................................26 11.1 Disseminated Sulphide Replacement (DSR) Reefs .....................................26 11.2 Quartz-filled Reefs and Shears ....................................................................27 12 EXPLORATION ...............................................................................................................27 12.1 Underground Exploration............................................................................27 12.2 Mine Claims Exploration.............................................................................28 12.3 Regional Exploration...................................................................................28 12.3.1 Mazoe Joint Venture............................................................................29 12.3.2 Bubi Claims – Bulawayo Greenstone Belt ..........................................29 12.3.3 Abercorn Claims – Gwanda Greenstone Belt......................................29 12.3.4 GG Claims – Gwanda Greenstone Belt ...............................................30 13 DRILLING..........................................................................................................................31 13.1 On-Mine Drilling.........................................................................................31 13.2 Exploration (Off-mine) Drilling..................................................................32 14 SAMPLING METHOD AND APPROACH...............................................................34 14.1 Channel and Percussion Drill Sludge Samples............................................34 14.2 Diamond Drill Core Sampling.....................................................................35 14.3 Sample Handling and Monitoring................................................................35 15 SAMPLE PREPARATION, ANALYSIS AND SECURITY ....................................36 16 DATA VERIFICATION..................................................................................................37 2 17 ADJACENT PROPERTIES............................................................................................37 18 MINERAL PROCESSING AND METALLURGICAL TESTING........................38 18.1 Metallurgical Plant.......................................................................................38 18.2 Metallurgical Testing...................................................................................38 19 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES...................40 19.1 Key Assumptions, Methods and Parameters ...............................................41 19.1.1 Geological............................................................................................41 19.1.2 Economic Factors.................................................................................41 19.1.3 Mining Factors.....................................................................................42 19.1.4 Sources of information.........................................................................43 19.1.5 Data Processing....................................................................................44 19.2 Mineral Resources.......................................................................................44 19.3 Mineral Reserves.........................................................................................47 19.3.1 Relationship between Reserves and Resources ...................................47 19.3.2 Probable Mineral Reserves ..................................................................47 19.3.3 Proven Mineral Reserves .....................................................................47 19.3.4 Reconciliation of Ore Reserves ...........................................................48 19.4 Discussion....................................................................................................50 19.5 Discussion on Grade Management ..............................................................51 19.5.1 Grade Control.......................................................................................51 19.5.2 Grade Reconciliation...........................................................................51 19.5.3 Cut-off grade........................................................................................53 19.6 Other Factors................................................................................................53 19.6.1 Specific Gravity...................................................................................53 19.6.2 Mining..................................................................................................53 19.6.3 Metallurgical........................................................................................53 20 OTHER RELEVANT DATA AND INFORMATION ............................................54 20.1 Risks.............................................................................................................54 20.2 Opportunities................................................................................................54 21 INTERPRETATION AND CONCLUSIONS............................................................55 22 RECOMMENDATIONS.................................................................................................56 23 REFERENCES...................................................................................................................57 24 DATE AND SIGNATURE.............................................................................................58 25 ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES....................59 25.1 Mining Operations.......................................................................................59 25.1.1 Development........................................................................................59 25.1.2 Underhand Bench Stoping ...................................................................61 25.1.3 Shrinkage Stoping................................................................................62 25.1.4 Longhole Stoping.................................................................................63 25.1.5 Rock Conditions and Rock Mechanics................................................64 25.1.6 Ore Handling........................................................................................65