EXHIBIT 14b

CALEDONIA MINING CORPORATION

2004 MANAGEMENT PROXY CIRCULAR

Notice of Annual and
Special Meeting of Shareholders
on June 24, 2004
Management Proxy Circular

Instrument of Proxy
Solicited by Management

CALEDONIA

Mining Corporation

NOTICE OF ANNUAL AND SPECIAL
MEETING OF SHAREHOLDERS

TAKE NOTICE that the Annual and Special Meeting of Shareholders of Caledonia
Mining Corporation (the "Corporation") will be held in Boardroom No. 3, 44th
Floor, (the offices of the Corporation's Solicitors, Borden Ladner Gervais LLP)
Scotia Plaza, 40 King Street West, Toronto, Ontario, on Thursday, June 24, 2004
commencing at 14:30 p.m. in the afternoon (local time) for the purposes of:

1. receiving the annual report that includes the financial statements and
auditors' report thereon for the financial year ended December 31, 2003,

2. considering and, if deemed appropriate, approving an ordinary resolution
that the number of directors be set at six until further notice,

3. electing directors;

4. appointing auditors and authorizing the directors to fix their
remuneration

5. considering and, if deemed appropriate, approve an ordinary resolution
that, subject to regulatory approval and in compliance with the policies
of The Toronto Stock Exchange, the Corporation be authorized to enter into
one or more private placement transactions with subscribers substantially
at arm's length to the Corporation, during the ensuing 12 month period,
providing for the issuance of up to 75% of the number of common shares
outstanding as of the date of the resolution;

6. considering and, if deemed advisable, approving an ordinary resolution of
the shareholders of the Corporation in favour of the creation of the 2004
Stock Option Plan;

7. transacting such other business as may properly be brought before the
meeting.

A copy of the annual report, form of proxy and management proxy circular
accompany this notice. A copy of the Corporation's Form 20F, filed with the
United States Securities and Exchange Commission, is available upon request.

Shareholders will be entitled to vote at the meeting in person or by proxy.
Shareholders not attending the meeting may exercise their right to vote by
promptly signing, dating and returning the proxy in the envelope provided for
that purpose.

DATED: May 4th, 2004 BY ORDER OF THE BOARD

S. E. Hayden
Chairman of the Board, President and
Chief Executive Officer

MANAGEMENT PROXY CIRCULAR

SOLICITATION OF PROXIES

THIS MANAGEMENT PROXY CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION
BY AND ON BEHALF OF THE MANAGEMENT OF CALEDONIA MINING CORPORATION (THE
"CORPORATION") OF PROXIES TO BE USED AT THE ANNUAL AND SPECIAL MEETING (THE
"MEETING") OF SHAREHOLDERS OF THE CORPORATION TO BE HELD ON TUESDAY, JUNE 24,
2004 AT THE HOUR OF 14:30 O'CLOCK LOCAL TIME, IN BOARDROOM #3, 44TH FLOOR,
SCOTIA PLAZA, 40 KING STREET WEST, TORONTO, ONTARIO, for the purposes set forth
in the accompanying notice of meeting. It is expected that the solicitation will
be primarily by mail but proxies may also be solicited personally or by
telephone by employees or agents of the Corporation. The cost of any such
solicitation by management will be borne by the Corporation.

APPOINTMENT AND REVOCATION OF PROXIES

THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY ARE DIRECTORS OF THE
CORPORATION. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON TO REPRESENT
HIM AT THE MEETING MAY DO SO BY INSERTING SUCH PERSON'S NAME, WHICH NEED NOT BE
A SHAREHOLDER OF THE CORPORATION, IN THE BLANK SPACE PROVIDED IN THE FORM OF
PROXY AND STRIKING OUT THE NAMES OF THE PERSONS SPECIFIED OR BY COMPLETING
ANOTHER PROPER FORM OF PROXY. In all cases, the completed proxy is to be
deposited at the registered office of the Corporation or at the offices of
Equity Transfer Services Inc., Suite 420, 120 Adelaide Street West, Toronto,
Ontario, M5H 4C3 prior to the day of the Meeting or with the Chairman of the
Meeting on the day of the Meeting or any adjournment thereof.

A shareholder giving a proxy has the right to revoke the proxy by instrument in
writing executed by the shareholder or by the shareholder's attorney authorized
in writing and deposited at the registered office of the Corporation at any time
up to and including the last business day preceding the date of the Meeting, or
any adjournment thereof, at which the proxy is to be used, or with the Chairman
of the Meeting on the date of the Meeting, or any adjournment thereof, or in any
other manner permitted by law.

EXERCISE OF DISCRETION BY PROXIES

THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY WILL VOTE THE SHARES IN RESPECT
OF WHICH THEY ARE APPOINTED IN ACCORDANCE WITH THE DIRECTION OF THE SHAREHOLDERS
APPOINTING THEM. IN THE ABSENCE OF SUCH DIRECTION, SUCH SHARES WILL BE VOTED FOR
ALL OF THE MATTERS REFERRED TO IN THE NOTICE OF MEETING AND THE RE-ELECTION OF
THE EXISTING DIRECTORS.

The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to any amendments or variations to matters identified
in the notice of meeting and with respect to other matters which may properly
come before the Meeting. At the time of printing this management proxy circular,
management of the Corporation knows of no such amendments, variations or other
matters to come before the Meeting.

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

On April 30, 2004, the Corporation had outstanding 301,111,786 common shares,
each carrying the right of one vote per share. To the best of the knowledge of
the directors and officers of the Corporation, no person beneficially owns,
directly or indirectly, or exercises control or direction over, shares carrying
more than 10% of the votes attached to all issued shares of the Corporation.

The Board of Directors of the Corporation has fixed a record date of May 24,
2004 for the purpose of determining who is entitled to receive Notice of
Meeting. Shareholders entitled to vote at the meeting will be the shareholders
of record at 10:00 a.m. (Toronto, Ontario time) on the day preceding the day of
the meeting. The failure of any shareholder to receive notice of the Meeting
shall not deprive the shareholder of voting at the Meeting.

NUMBER OF DIRECTORS

The directors of the Corporation have considered the most effective composition
of the Board of Directors in light of the current business of the Corporation
and the regulatory requirements being introduced to ensure the independence of a
number of directors and membership of board committees. The directors have
concluded that the composition of the existing board is effective in the overall
operation of the Corporation but may be unable to provide adequate independence
to some board committees to fully satisfy recently introduced regulatory
requirements. The board therefore recommends that the number of directors of the
Corporation be increased to six until further notice -

although it will be proposed that the meeting only reappoint the existing five
Directors. The increase in the size of the Board will create one vacancy that
the Board can fill when it determines to do so.

ELECTION OF DIRECTORS

All of the nominees are now members of the Board of Directors and have been
since the dates indicated. Management does not contemplate that any of the
nominees will be unable to serve as a director but, if that should occur for any
reason prior to the Meeting, the persons named in the enclosed form of proxy
reserve the right to vote for another nominee in their discretion. Each director
elected will hold office until the next annual meeting or until he earlier
ceases to be a director. Set out below are the names of the persons proposed to
be nominated at the meeting for election as directors.

NUMBER OF SHARES
NAME, OFFICE HELD AND DIRECTOR BENEFICIALLY OWNED,
MUNICIPALITY OF RESIDENCE PRINCIPAL OCCUPATION SINCE CONTROLLED OR DIRECTED
- ------------------------------ ---------------------------------------------- -------- ----------------------

S. E. Hayden, (1)(2)(3)(4) Chairman, President and Chief Executive 1996 Nil
Chairman, President and Chief Officer of the Corporation and Director of all
Executive Officer & Director Caledonia's subsidiary companies. Chief
Johannesburg, South Africa Executive Officer of Eersteling Gold Mining
Company Limited, Greenstone Management
Services (Pty) Ltd., and Barbrook Mines
Limited.

J. Johnstone, Chief Operating Officer of the Corporation 1997 Nil
Vice President Operations and Director of various subsidiary
and Chief Operating Officer companies.
& Director
Oakville, Ontario, Canada

F. C. Harvey, Technical Technical Director and Secretary of the 1993 4,300
Director , Secretary & Corporation and Director of various
Director Oakville, Ontario, subsidiary companies.
Canada

C.R. Jonsson, Principal of Tupper, Jonsson & Yeadon, 1992 59,469
Director (1)(2)(3) Vancouver, Barristers & Solicitors.
British Columbia, Canada

W. I. L. Forrest, Business Executive. 1992 17,000
Director (1)(2)(4)
Gingins, Switzerland

Notes:

(1) Member of Audit Committee, (2) Member of Compensation Committee, (3) Member
of Corporate Governance Committee, (4) Member of Nominating Committee.

The information as to shares beneficially owned or controlled or directed, not
being within the knowledge of the Corporation, has been furnished by the
respective nominees individually.

APPOINTMENT OF AUDITORS

Management is proposing the re-appointment of BDO Dunwoody LLP as auditors of
the Corporation to hold office until the next annual meeting of shareholders and
to authorize the Directors to fix their remuneration.

REPORT ON EXECUTIVE COMPENSATION

COMPENSATION OF NAMED EXECUTIVE OFFICERS

The following table, presented in accordance with the applicable regulation (the
"Regulation") under the Securities Act (Ontario), sets forth all annual and long
term compensation for services in all capacities to the Corporation and its
subsidiaries for the fiscal year ended December 31, 2003 in respect of the named
executive officers:

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------- ----------------------------------
AWARDS PAYOUTS
----------- -------
SECURITIES RESTRICTED
UNDER SHARES OR
NAME AND OTHER ANNUAL OPTIONS/ RESTRICTED LTIP ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION SARS SHARE UNITS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) (1) GRANTED (#) (#) ($) ($)
- ----------------------- ---- ------- ----- -------------- ----------- ----------- ------- ------------

Stefan E. Hayden (2)(4) 2003 180,000 - - Nil Nil Nil 5,000
Chairman of the 2002 180,000 - - 4,000,000 Nil Nil 5,000
Board, President 2001 180,000 - - Nil Nil Nil 5,000
& Chief Executive
Officer

Jim Johnstone (4) 2003 207,200 - - Nil Nil Nil 5,000
Vice President 2002 207,200 - - 2,000,000 Nil Nil 5,000
Operations and 2001 207,200 - - Nil Nil Nil 5,000
Chief Operating
Officer

F.Chris Harvey (4) 2003 150,000 - - Nil Nil Nil 5,000
Technical Director 2002 150,000 - - 2,000,000 Nil Nil 5,000
and Secretary 2001 150,000 - - Nil Nil Nil 5,000

J. Smith (3)(4) 2003 Nil - - Nil Nil Nil Nil
Vice-President 2002 Nil - - 75,000 Nil Nil Nil
Exploration 2001 7,508 - - Nil Nil Nil Nil

Steve Poad (5) 2003 26,971 - - Nil Nil Nil Nil
V-P, Finance 2002 19,914 - - 150,000 Nil Nil Nil
2001 12,156 - - Nil Nil Nil Nil

Notes:

(1) Perquisites and other personal benefits for each of the named executive
officers did not exceed the lesser of $50,000 and 10% of total annual
salary and bonus in 2001, 2002 and 2003.

(2) Mr. S. E. Hayden is employed indirectly by the Corporation through a
management and administrative agreement with Epicure Overseas SA.

(3) Since December 1999, Mr. J. Smith has provided consulting services to the
Corporation and its subsidiaries through a consulting agreement.

(4) The figures shown are the agreed salaries. The Officers noted have, in
recognition of the Corporation's cash position in the respective years
agreed to defer an aggregate total of $302,201 of the salaries due them
for the period ending December 31, 2001 and further amounts totaling
$173,067 and $383,810 for the periods ending December 31, 2000 and
December 31, 1999 respectively. During 2003 Mr. Johnstone was paid in full
the sum of $278,666.33. Mr. Harvey was paid $100,000.00 and deferred the
balance of his outstanding salary to 2004. Mr. Hayden has been paid
$216,342 of the outstanding balance upon behalf of Epicure.

(4) Mr S. Poad is employed indirectly by the Corporation through a service
contract with Doelcam Inc.

The following table (presented in accordance with the Regulation) sets forth
stock options granted by the Board of Directors of the Corporation during the
fiscal year ended December 31, 2003 to the named executive officers:

OPTION/SAR GRANTS IN LAST FISCAL YEAR

MARKET VALUE OF
% OF TOTAL SECURITIES
OPTIONS/SARS UNDERLYING
SECURITIES UNDER GRANTED TO OPTIONS/SARS ON
OPTIONS/SARS EMPLOYEES IN EXERCISE OR BASE DATE OF GRANT EXPIRATION
NAME GRANTED # FISCAL YEAR PRICE ($/SECURITY) ($/SECURITY) DATE
- ---- ---------------- ------------ ------------------ ---------------- ----------

No Options or SARS were granted to the named executive officers in 2003.

The following table (presented in accordance with the Regulation) sets forth
stock options exercised by the named executive officers during the fiscal year
ended December 31, 2003:

OPTION/SAR EXERCISES IN LAST FISCAL YEAR

VALUE OF UNEXERCISED IN-
UNEXERCISED THE-MONEY (1)
SECURITIES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED DECEMBER 31, 2003 DECEMBER 31, 2003
ON AGGREGATE VALUE (#) ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ------------ ---------- --------------- ----------------- -------------=----------

S. E. Hayden Nil Nil 4,300,000/Nil $755,750/Nil
J. Johnstone Nil Nil 2,172,500/Nil $382,150/Nil
F. C. Harvey Nil Nil 2,228,750/Nil $382,150/Nil
J. Smith Nil Nil 178,750/Nil $12,825/Nil
S. Poad 56,475 $ 28,237.50 248,825/Nil $18,450/Nil

Notes:

(1) "In-the-money" means the excess of the market value of the common shares
of the Corporation outstanding on December 31 2003 over the exercise price
of the options

The Corporation does not have a long-term incentive plan, a pension plan or
other form of defined benefit plan - other than its Stock Option Plan.

COMPOSITION OF THE COMPENSATION COMMITTEE

The Corporation has a compensation committee ("Committee") comprised of three
members. All issues as to compensation of the Officers are considered by the
Committee, the members of which, during the fiscal year ended December 31, 2003,
were C. R. Jonsson, W. I. L. Forrest and S. E. Hayden. Mr. S. E. Hayden as
President and CEO of the Corporation is therefore an inside director. Mr. C. R.
Jonsson was granted 1,000,000 stock options in 2002 in lieu of being paid for
legal services provided by him. He has therefore been a service provider within
the past three years and may be considered a related director under recently
adopted OSC rules. Mr. Jonsson continues to provide the company with legal
services on a no-fee basis. The Board considers that this situation cannot be
perceived to interfere with Mr. Jonsson's ability to act with a view to the best
interests of the company and therefore considers him to be an unrelated
director. Mr. W. I. L. Forrest is an outside and unrelated director within the
meaning of The Toronto Stock Exchange ("TSX") Report on Corporate Governance
Practices.

COMPENSATION POLICIES

While the Committee of the Board of Directors of the Corporation has not adopted
a written policy concerning the compensation of executive officers, it has
developed a consistent approach and philosophy relating to executive
compensation. The overriding principles in the determination of executive
compensation are the need to provide total compensation packages that will
attract and retain qualified and experienced executives, to reward the
executives for their contribution to the overall success of the Corporation and
to integrate the longer-term interest of the executives with the investment
objectives of the Corporation's shareholders.

Executive compensation at the Corporation has two principal components: salary
and stock options. The Committee is mindful that the Corporation competes within
the framework of the international mining industry. The Compensation Committee
is of the view that a competitive salary level is appropriate for the executive
officers, as their total compensation package should emphasize salaries and the
stock options granted by the Corporation. The chief executive officer of the
Corporation is one of the named executive officers and therefore his
compensation is determined in the same manner as for the other executive
officers of the Corporation.

COMPENSATION OF DIRECTORS

Each of the five directors, including directors who are officers of the
Corporation, is entitled to an annual director's fee of $5,000 Canadian and out
of pocket expenses relating to attendance at a board or committee meeting. In
recognition of the Corporation's cash position, no director fees were paid in
1999, 2000, 2001 or 2002 for duties performed in 1998, 1999, 2000 and 2001.
Subsequently all outstanding directors' fees were paid in 2003. The Corporation
obtained, in June, 2003, liability insurance for directors and officers of the
Corporation and its affiliates with coverage of $1,000,000 Canadian per
occurrence and in the aggregate.

PERFORMANCE GRAPH

The following graph and table compares the year-end value of the common shares
of the Corporation with the TSX 300 Stock Index for the last six years on the
basis of cumulative total return.

CALEDONIA SHARES VS S&P/TSX COMPOSITE AT DECEMBER 31
(ASSUMING $100 OF CALEDONIA SHARES WERE PURCHASED DECEMBER 31, 1998)

[PERFORMANCE GRAPH]

Dec 1998 Dec 1999 Dec 2000 Dec 2001 Dec 2002 Dec 2003
-------- -------- -------- -------- -------- --------

S&P/TSX Composite 100 133 141 121 104 130
Caledonia Common Shares 100 45 64 50 373 382

CORPORATE GOVERNANCE PRACTICES

The TSX Committee on Corporate Governance in Canada issued a report (the "TSX
Report") in December 1994 containing guidelines for effective corporate
governance of corporations. The by-laws of the TSX were subsequently amended to
require each listed corporation incorporated in Canada to make annual disclosure
of its corporate governance practices with reference to those guidelines. The
Corporation's Statement of Corporate Governance Practices follows:

MANDATE OF THE BOARD

The Board of Directors of the Corporation is responsible for the overall
stewardship of the Corporation, and has full power and authority to manage and
control the affairs and business of the Corporation. Amongst other things, the
Board is responsible for:

1. supervising the officers of the Corporation in their management of the
business and affairs of the Corporation;

2. adoption of and managing the Corporation's strategic planning process;

3. identifying and managing principal risks to the Corporation's
business;succession planning including the appointment, training,
monitoring and appraisal of senior officers of the Corporation;

4. overseeing the administration of a policy for communications by the
Corporation with shareholders, the investment

5. community, the media, governments and the general public;

6. examination, through its Audit Committee, of the effectiveness of the
company's internal control processes and management information systems.
The Board consults with the VP Finance and management of the Corporation
to ensure the integrity of these systems;

7. developing position descriptions and terms of reference for the Board, the
President and Chief Executive Officer and the committees of the Board.

The Board holds regular meetings. Additional meetings are held to address
special items of business. The frequency of meetings, as well as the nature of
agenda items change depending upon the state of the Corporation's affairs and in
light of opportunities or risks which the Corporation faces. On average the
Board has met between nine and ten times per year during the past five years.

In 2004 the Board adopted a Charter of the Board of Directors. This Charter can
be viewed at the Company's head office and at the Annual Meeting of
Shareholders.

BOARD COMPOSITION

The TSX Report recommends that a majority of the Board be unrelated to the
Corporation. The TSX Report uses the term unrelated director to mean a director
who is free from any interest and any business or other relationship which
could, or could reasonably be perceived to, materially interfere with the
director's ability to act with a view to the best interests of the Corporation,
other than interests and relationships arising from shareholding.

The Board of Directors currently has five members. The Board has concluded that
two of these directors, Messrs. Forrest and Jonsson, are unrelated directors
within the meaning of the TSX Report. In reaching that conclusion, the Board has
examined the factual circumstances of each director and has considered any
interests and business or other relationship that any director may have with the
Corporation. Mr. S. E. Hayden is a related director by virtue of his position as
the President and Chief Executive Officer of the Corporation and Messrs. J.
Johnstone and F. C. Harvey are related directors by virtue of their positions as
employees of the Corporation. The Board believes that the extensive knowledge of
Messrs. Hayden, Johnstone and Harvey of the Corporation's business is beneficial
to the other directors and their participation as directors contributes to the
effectiveness of the Board.

The Corporation does not have a significant shareholder, defined in the TSX
Report as a shareholder with the ability to exercise a majority of votes for the
election of directors.

The Board determines each year the number of directors to be elected at the
annual general meeting. Under the articles of the Corporation, the number of
directors of the Corporation must be at least three. For 2004, the Board has
concluded that the number of directors should be increased to satisfy the
recently announced requirement to appoint three independent directors to the
Audit Committee. At the 2004 Annual Meeting of Shareholders the Board of
Directors will request the shareholders to approve increasing the number of
directors to six.

Caledonia's Board members consider that the Board's composition is tight and
efficient considering the extent of the Corporation's activities and the
location of the properties on which most of its activities are conducted. It is
the opinion of the two unrelated Directors, Messrs Forrest and Jonsson that the
Board functions adequately independently of management.

While Mr. Hayden holds the positions of Chairman and CEO, in board meetings Mr.
Jonsson, as the only lawyer on the Board, takes a leading role and acts somewhat
as quasi-chairman.

The Board does not consider it feasible to have effective meetings of the
Directors without having related Directors participating. If they were not
participating the Board meetings would essentially be conducted in a vacuum.

BOARD COMMITTEES

The Board of Directors has four standing committees: the Audit Committee, the
Compensation Committee, the Corporate Governance Committee and the Nominating
Committee. The Board has established a policy to strive to implement the
recommendations of the TSX Report wherever possible and practical.

AUDIT COMMITTEE

The Audit Committee is currently composed of a majority of outside directors and
unrelated directors. In accordance with recent guidelines and, subject to the
availability of suitably qualified directors, it is the Board's objective to
appoint only independent directors to the Audit Committee. The members of the
Audit Committee, the internal accounting staff and the external auditors have
unrestricted direct access to, and communication with, each other to assist them
in carrying out their respective duties. The Committee is responsible for
reviewing and making recommendations to the Board on:

1. financial statements and the related reports of management and external
auditors;

2. accounting and financial reporting procedures and methods;

3. internal audit procedures and reports, and matters relating to external
auditors, including the appointment and terms of engagement of external
auditors and their reports relating to accounting, financial and internal
audit matters.

During 2004 the Board adopted a "Charter of the Audit Committee". This Charter
is attached as Appendix 1 of this Management Information Circular.

COMPENSATION COMMITTEE

The Compensation Committee is currently composed of one related and two
unrelated directors. The Committee is responsible for making recommendations to
the Board on:

1. compensation of officers and senior employees of the Corporation,
including stock option incentives;

2. succession planning for officers of the Corporation;

CORPORATE GOVERNANCE COMMITTEE

The Corporate Governance Committee is currently composed of one unrelated and
one related director. The Committee has general responsibility for developing
the approach of the Corporation to matters of corporate governance, which
includes the responsibility for:

1. assessing, at least annually, the effectiveness of the Board as a whole
and the committees of the Board;

2. reviewing annually the mandates of the Board and its committees and making
recommendations for change;

3. recommending procedures to permit the Board to function independently from
management;

4. seeing to the adequacy of the orientation and education programs for new
members of the Board;

5. determining annually which directors should be considered to be unrelated
directors, and recommending such determination to the Board; and

6. preparing annually and recommending to the Board a "Statement of Corporate
Governance Practices".

NOMINATING COMMITTEE

The Nominating Committee is composed of one unrelated and one related director.
The Committee is responsible for:

1. identifying prospective nominees for the Board and recommending them to
the Board; and

2. establishing criteria for Board membership and retirement therefrom.

DECISIONS REQUIRING BOARD APPROVAL

As part of the Board's responsibility for the strategic planning process of the
Corporation, the Board considers and, where appropriate, adopts the goals of the
business that are proposed by Management and the strategies and policies within
which the Corporation is managed. Management is required to seek the approval of
the Board for material deviations, financial or otherwise, from the approved
business goals, strategies and policies of the Corporation.

SHAREHOLDER FEEDBACK

The Corporate Governance Committee is responsible for overseeing the
Corporation's policy for communications with shareholders, the investment
community, the media, governments and the general public. In accordance with
that policy, communications with such parties are handled through the head
office located in Mississauga, Canada.

EXPECTATIONS OF MANAGEMENT

The Board requires management to keep the Board informed in a timely and candid
manner of the progress of the Corporation towards the achievement of its
established goals, and of any material deviations from such goals and from
corporate strategies and policies approved by the Board.

This Statement of Corporate Governance Practices has been prepared by the
Corporate Governance Committee.

PRIVATE PLACEMENT TRANSACTIONS

The Corporation from time to time investigates opportunities to raise financing
on advantageous terms. While it is not the intention of management at this time
to enter into any private placement agreements other than as previously publicly
disclosed, it seeks the flexibility to enter into private placement agreements,
if required, which could result in the issue of up to 75% of the number of
shares issued and outstanding at this time.

Under the rules of the TSX the aggregate number of shares of a listed company
which are issued or made subject to issuance (i.e. issuable under a share
purchase warrant or option or other convertible security) by way of one or more
private placement transactions during any particular six-month period must not
exceed 25% of the number of shares outstanding (on a non-diluted basis) prior to
giving effect to such transactions (the "TSX 25% Rule"), unless there has been
shareholder approval of such transactions.

The application of the TSX 25% Rule may restrict the availability to the
Corporation of funds which it may wish to raise in the future by private
placement of its securities. The TSX has a working practice that it will accept
advance approval by shareholders in anticipation of private placements that may
exceed the TSX 25% Rule, provided such private placements are completed within
12 months of the date such advance shareholder approval is given.

Any private placement proceeded with by the Corporation under the advance
approval being sought at the Meeting will be subject to the following additional
restrictions:

1. it must be substantially with parties at arm's length to the Corporation;

2. it must not result in control of the Corporation being materially
affected;

3. it must be completed within a twelve month period following the date the
shareholder approval is given; and

4. it must comply with the private placement pricing rules of the TSX which
currently require that the issue price per common share must not be lower
than the closing market price of the common shares on the TSX on the
trading day prior to the date notice of the private placement is given to
the TSX (the "Market Price"), less the applicable discount. For these
purposes, a private placement of unlisted convertible securities is deemed
to be a private placement of the underlying listed securities at an issue
price equal to the lowest possible price at which the securities are
convertible by the holders thereof.

The directors of the Corporation believe the passing of a resolution authorizing
the Corporation to enter into private placement transactions for the issuance of
up to 75% of the number of common shares outstanding is in the best interests of
the Corporation and recommend that shareholders vote in favour of the
resolution.

Approval of the resolution will require the favourable vote of a majority of the
votes cast thereon at the Meeting.

APPROVAL OF INCENTIVE STOCK OPTION PLAN

At the annual meeting shareholders will be asked to approve a resolution
creating a new incentive stock option plan (the "2004 Plan") and fixing the
maximum number of shares issuable under the 2004 Plan at 11,250,000 shares. An
explanation of the 2004 Plan and the Corporation's policy in granting incentive
stock options follows:

The Corporation currently has three Stock Option Plans which were approved by
the shareholders in 1995, 1996 and 2002 (collectively referred to as the
"Existing Plans") which in total made 18,750,000 options available to the
Corporation for issuance.

The 2004 Plan was prepared in accordance with the TSX's revised policy on stock
option plans for listed companies (the "TSX Policy") and has the same terms as
the Corporation's existing plans. Options may be granted under the 2004 Plan to
employees, officers, directors, consultants and other service providers of the
Corporation or its affiliates or subsidiaries. The 2004 Plan in common with the
previous stock option plans or share compensation arrangement of the
Corporation, limits the number of outstanding options at any one time and the
total number of shares issuable upon the exercise of options in any one-year
period to 10% of the outstanding issued capital of the Corporation. The total
number of shares issuable to any individual during a one-year period cannot
exceed 5% of the issued capital. The exercise price may not be less than an
approved discount to the market price for shares at the time the option is
granted, options are non-transferrable and cannot be outstanding for more than
10 years and no financial assistance will be provided by the Corporation to
facilitate the purchase of shares under the Plan.

The expressed policy of the Corporation is that its stock incentive plans should
serve to advance the interests of the Corporation by affording employees and
other qualified individuals the opportunity of acquiring an actual interest in
the Corporation, as a supplement to the purposely modest remuneration levels
they are otherwise entitled to, thereby identifying their interests with the
interests of other shareholders. It is the opinion of the Board that this policy
has been successful in the past in enabling the Corporation to attract talented
and resourceful personnel. To augment this policy, the Board of Directors
appointed a Compensation Committee, as advocated by the report of the TSX on
Corporate Governance, and adopted a procedure to be followed in allocating
specific incentive stock options.

This procedure requires that allocations of stock options must be initiated by
the Compensation Committee and supported by a majority of the disinterested
members of that Committee. This procedure also sets a limit on the maximum
number of options available at any one time to non-executive directors and
reserves the balance of the options available exclusively for employees and
other service providers to the Corporation and its subsidiaries. Management is
encouraged to offer advice to the Compensation Committee in respect of options
to employees and service providers but recommendations from the Compensation
Committee to the Board of Directors in the allocation of specific options can
only come from a majority of the disinterested members of the Compensation
Committee, excluding management. This procedure ensures that incentive stock
options granted by the Board of Directors will be based on the recommendations
of members of the Compensation Committee who are free from any apparent conflict
of interest.

The TSX Policy requires incentive stock option plans to specify the aggregate
maximum number of shares that may be issuable under such plans and any number in
excess of that amount requires an amendment to the plan and approval by the
shareholders. The Board has determined that 11,250,000 shares is an appropriate
limit for the 2004 Plan as it will enable the Corporation to continue its stock
incentive policy. Under the Existing Plans, that limit is set at 18,750,000
shares. To accommodate the 2004 plan the Board has determined that this limit be
set at 30,000,000 which is within the "10% of issued and outstanding"
requirement of the Plans. Since the Existing Plans' inception, of the shares
available, options for 4,670,675 shares have been granted and exercised
resulting in a contribution to the Corporation's treasury of $6,696,975. Options
for 12,908,700 shares have been granted and are outstanding and unexercised, and
options for 1,170,625 shares remain available to be granted under the Existing
Plans. This limited number of options available under the Existing Plans
restricts the Corporation in the continued implementation of its remuneration
policy and inhibits the potential cash contributions to its treasury as options
are exercised. It is for this reason that shareholders will be asked to approve
the creation of the 2004 Plan and to increase the limit on the aggregate number
of shares that may be issued under the Plans.

The Existing Plans would continue in effect so that the total number of shares
available for future options granted pursuant to the Corporation's stock
incentive policy under the Existing Plans and the 2004 Plan would be a total of
12,420,625 shares. The proviso that at all times the number of shares which may
be issued upon the exercise of options granted and outstanding under the
Existing Plans and the 2004 Plan cannot exceed 10% of the outstanding issued
capital of the Corporation would continue to apply as well as the other limits
described above.

A copy of the 2004 Plan is available for inspection at the Corporation's offices
in Mississauga, Ontario and will be available at the annual meeting.

The resolution to approve the creation of the 2004 Plan will require the
favourable vote of a majority of the votes cast at the annual meeting. An
aggregate of 80,769 votes attached to common shares of the Corporation
beneficially owned by shareholders who are eligible to participate under the
2004 Plan will be excluded from voting on the resolution.

GENERAL APPROVAL OF CIRCULAR

The contents and sending of this management information circular have been
approved by the Board of Directors of the Corporation,

ON BEHALF OF THE BOARD OF DIRECTORS DATED: May 4th, 2004

APPENDIX 1

CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

I. PURPOSE

The purpose of the Audit Committee (the "Committee") of the Board of Directors
(the "Board") of Caledonia Mining Corporation ("Caledonia") is to provide an
open avenue of communication between Caledonia's management ("Management"), the
independent auditors ("Auditors") and the Board and to assist the Board in its
oversight of the:

- integrity, adequacy and timeliness of Caledonia's financial
reporting and disclosure practices;

- processes for identifying the principal financial risks of Caledonia
and the control systems in place to monitor them;

- compliance with legal and regulatory requirements related to
financial reporting; and

- independence and performance of Caledonia's Auditors.

The Committee shall also perform any other activities consistent with this
Charter, Caledonia's by-laws and governing laws as the Committee or Board deems
necessary or appropriate.

The Committee's role is one of oversight. It is not the responsibility of the
Committee to determine that Caledonia's financial statements are complete and
accurate and in accordance with generally accepted accounting principles or to
plan or conduct audits. The financial statements are the responsibility of
Management. The Auditors are responsible for performing an audit and expressing
an opinion on the fair presentation of Caledonia's financial statements in
accordance with generally accepted accounting principles.

II. AUTHORITY

The Committee has the authority to conduct any investigation appropriate to its
responsibilities, and it may request the Auditors as well as any officer of
Caledonia, or Caledonia's outside counsel, to attend a meeting of the Committee
or to meet with any members of, or consultants to, the Committee. The Committee
shall have unrestricted access to Caledonia's books and records and has the
authority to retain, at Caledonia's expense, special legal, accounting, or other
consultants or experts to assist in the performance of the Committee's duties.
Subject to Board approval, the Committee has the authority to set and pay the
compensation of the advisors employed by the Committee. The Chairperson of the
Committee ("Chairperson") or other member of the Committee so designated by the
Committee may represent the Committee to the extent permitted by applicable
legal and listing requirements.

The Committee shall review and assess the adequacy of this Charter annually and
submit any proposed revisions to the Board for approval.

III. COMPOSITION AND MEETINGS

1. The Committee and its membership shall meet all applicable legal,
regulatory and listing requirements.

2. Members of the Committee and the Chairperson shall be appointed by the
Board and may be removed by the Board in its discretion. The Committee
will be elected annually at the first Board meeting following the annual
general meeting.

3. The Committee shall be comprised of three or more directors, one of whom
shall serve as the Chairperson.

4. Each member of the Committee shall be an independent, non-executive
director, free from any relationship that, in the opinion of the Board,
could reasonably be expected to interfere with the exercise of his or her
independence from management, Caledonia, or the Auditors.

5. All members of the Committee shall be, or promptly after appointment,
shall become financially literate as determined by the Board. Preferably
at least one member of the Committee shall have accounting or related
financial management expertise as determined by the Board.

6. The Committee shall meet, at the discretion of the Chairperson or a
majority of its members, as circumstances dictate or as may be required by
applicable legal or listing requirements, and a majority of the members of
the Committee shall constitute a quorum.

7. If and whenever a vacancy shall exist, the remaining members of the
Committee may exercise all of its powers and responsibilities so long as a
quorum remains in office.

8. Any matters to be determined by the Committee shall be decided by a
majority of votes cast at a meeting of the Committee called for such
purpose; actions of the Committee may be taken by an instrument or
instruments in writing signed by all of the members of the Committee, and
such actions shall be effective as though they had been decided by a
majority of votes cast at a meeting of the Committee called for such
purpose. In the case of a tie the Chairperson shall have a second or
tie-breaking vote.

9. The Committee shall maintain minutes of meetings and periodically report
to the Board on significant results of the Committee's activities.

10. The Committee may invite such other persons to its meetings as it deems
appropriate.

11. The Auditors will have direct access to the Committee on their own
initiative.

IV. RESPONSIBILITIES

A. WITH RESPECT TO THE INTERIM AND ANNUAL FINANCIAL STATEMENTS, THE MD&A, AND
THE AIF

1. The Committee shall review Caledonia's interim statements for approval of
same prior to their being filed with the appropriate regulatory
authorities. The Committee shall review Caledonia's annual audited
financial statements and report thereon to prior to their being filed with
the appropriate regulatory authorities. With respect to the annual audited
financial statements, the Committee shall discuss significant issues
regarding accounting principles, practices, and judgments of Management
with Management and the Auditors as and when the Committee deems it
appropriate to do so.

2. The Committee shall review Management's Discussion and Analysis relating
to annual and interim financial statements, the Annual Information Form
and any other public disclosure documents that are required to be reviewed
by the Committee under any applicable laws prior to their being filed with
the appropriate regulatory authorities.

3. The Committee shall review Management's earnings releases relating to
annual and interim financial statements and any other public disclosure
documents that are required to be reviewed by the Committee under any
applicable laws prior to their being filed with the appropriate regulatory
authorities.

4. The Committee shall review the post-audit or management letter containing
the recommendations of the Auditors and Management's response and
subsequent follow-up to any identified weaknesses.

5. The Committee shall review the evaluation of internal controls by the
Auditors, together with Management's response.

6. The Committee shall meet no less frequently than annually separately with
the Auditors and the Chief Financial Officer to review Caledonia's
accounting practices, internal controls and such other matters as the
Committee or Chief Financial Officer deems appropriate.

B. WITH RESPECT TO THE AUDITORS

1. The Auditors are ultimately accountable to the Board of Directors. The
Board has the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the Auditors (or nominate the Auditors to
be proposed for shareholder approval in any proxy statement).

2. The Committee shall review the performance of the Auditors.

3. The Committee shall annually recommend to the Board the appointment of the
Auditors, or, as appropriate, the discharge or replacement of the Auditors
when circumstances warrant. The Board will set the compensation for the
Auditors.

4. The Committee shall be responsible for ensuring that the Auditors submit
on a periodic basis to the Committee a formal written statement
delineating all relationships between the Auditors and Caledonia. The
Committee is responsible for discussing with the Auditors any disclosed
relationships or services that may impact the objectivity and independence
of the Auditors and for recommending that the Board take appropriate
action in response to the Auditor's report to satisfy itself of the
Auditor's independence.

5. Caledonia considers the core services provided by the Auditors to include
the annual audit, tax planning and tax compliance. The Committee shall
review any engagements for non-audit services beyond the core services
proposed to be provided by the Auditors or any of their affiliates,
together with estimated fees, and consider the impact on the independence
of the Auditors.

6. The Committee shall review the Auditor's audit plan, including scope,
procedures and timing of the audit.

C. OTHER COMMITTEE RESPONSIBILITIES

The Committee shall perform any other activities consistent with this Charter
and governing law, as the Committee or the Board deems necessary or appropriate
including:

1. Establishing and reviewing Caledonia's procedures for the receipt,
retention and treatment of complaints regarding accounting, financial
disclosure, internal controls or auditing matters.

2. Establishing and reviewing Caledonia's procedures for confidential,
anonymous submissions by employees regarding questionable accounting,
auditing and financial reporting and disclosure matters.

3. Conducting or authorizing investigations into any matters that the
Committee believes is within the scope of its responsibilities.

4. Making inquires of management and the Auditors to identify significant
business, political, financial and control risks and exposures and assess
the steps management has taken to minimize such risk.