Re Joint Venture

RNS Number:2437N
Caledon Resources PLC
07 July 2003


               Caledon Resources plc ("Caledon" or the "Company")


                               Re. Joint Venture



    Further progress in establishing the Company as a major gold explorer in
                                 Southern China



   *Longtoushan Goldmine Joint Venture Agreement Signed.


   *A preliminary compilation of previous work conducted by the Longtoushan
    Gold Mining Company reports continuous underground channel sampling grades
    of up to 6.47 g/t over widths of 31 metres.


   *Signing of a Letter of Intent with the Geological Survey of Guangxi
    covering several high potential gold districts throughout the Province.


The Company has initiated a strategic focus on selected exploration areas,
following extensive field reconnaissance conducted in Guangxi Province. Given
the successful past completion of the Co-operative Joint Venture with the China
National Gold Guangxi Corporation (CNGGC), the recent Joint Venture Agreement at
Longtoushan in addition to others in progress, Caledon is poised to have a major
impact on gold exploration in the region, paving the way for potential major
gold discoveries.

Overview


Caledon is pleased to announce the successful completion of a Joint Venture
Agreement with the Longtoushan Company, Guangxi, China, covering the Longtoushan
Gold Mine, situated 125 km east- north-east of Nanning, the capital of Guangxi
Province. The Joint Venture also encompasses applications for exploration
licenses covering 350 sq kilometres of ground surrounding the Longtoushan mining
operation. The signing of this Agreement represents the first of a series of
joint ventures that the Company will be undertaking in the Province.


At Longtoushan, the current operators are mining a series of hydrothermal
breccia zones extending over a strike length of 1.2 kilometres, with several
zones being mined over widths of up to 30 metres. Mined gold grades in selected
areas of the underground workings report grades of up to 20 g/t. Extensive areas
of hydrothermal brecciation carrying lower grade gold values, peripheral to the
currently mined areas clearly demonstrates that the mineralised system has the
potential to host additional major gold orebodies.


Under the terms of the Agreement, Caledon, through its wholly owned subsidiary
Blackwatch Resources, has the right to earn an 81% equity stake in the project
by completing a series of cash payments totalling $US 290,000 over three years.
Upon a decision to initiate commercial production, Blackwatch Resources will pay
the current owners US $2.5 million.


In addition to Longtoushan, Caledon has also signed a Letter of Intent (LOI)
with the Geological Survey of Guangxi (GSG). Under the terms of the LOI,
Blackwatch can earn an 85% equity position in several promising gold districts
in the Province, though the expenditure of US$1 million over three years. This
agreement is significant given the GSG's access to a wealth of granted
exploration and mining tenements throughout the province. The GSG also has a
highly qualified team of exploration and mining personnel who will be assisting
with Caledon's data compilation and field exploration programmes. Caledon
geologists are currently evaluating selected areas in the overall package that
has been offered by the GSG.

The promptness of completion regarding a Co-operative Joint Venture Agreement
with the CNGGC, the Longtoushan Joint Venture as well as Business License
approvals further demonstrates the willingness of The Peoples Republic of China
to encourage foreign investment in the gold mining sector.

Longtoushan Mine - Geology, Mineralisation Style and On-going Exploration


The project and mine site area is situated 15 kilometres from the regional city
of Guigang (pop. 400,000), 2 hrs drive north-east of Nanning on excellent paved
roads. The mine-site itself is located 2 kilometres from a paved road and hosts
excellent access and infrastructure.


The underground gold mine is hosted near the margins of a diatreme breccia
complex situated adjacent to a large, multiphase intrusive. The surrounding
country rock includes Pre-Cambrian basement units underlying Devonian/
Carboniferous age calcareous sediments. Paleozoic age granitic porphyries
intrudes these rock sequences and appear to be spatially and temporally related
to the gold mineralisation throughout the region.

The gold zones at Longtaoshan are hosted within a suite of strongly brecciated
porphyritic intrusive units. Field mapping and sampling is currently underway in
the area, where extensive areas of alteration (silica, pyrite and tourmaline)
were recently identified by the company's field crews.

In addition, further strongly altered and brecciated intrusives and sediments
have been identified in surface gold showings within a 10+ kilometre radius of
main mine workings, indicative of a much larger mineralised system than was
originally contemplated. Grab samples recently collected by Caledon's field
crews in known surface gold workings situated over 10 kilometres away from the
mine workings have assayed up to 6.12 g/t gold. Caledon's geological team
believes that this recently sampled mineralisation is spatially related to the
same zones hosting the Longtoushan ore body.

Longtoushan commenced commercial production in 1995, on a reserve base of 1.16
million tonnes averaging 5.02 g/t Au. The company is currently conducting small
scale mining at a rate of 60,000 tpa with a recovered gold grade averaging 4.8 g
/t. Caledon's compilation of historical continuous channel sampling programs
conducted at various levels underground by the Longtoushan Gold Company,
includes the following:

Mine Level      Stope #      Continuous Channel Sample: Grade and Width
380 m           CD-10        5.17 g/t over 30 m
540 m           CD-17-1      6.47 g/t over 31 m, incl. 10.51 g/t over 14 m
580 m           CD-19        4.34 g/t over 23 m, incl. 7.95 g/t over 8 m


George Salamis, Managing Director of Caledon reports, "These latest gold project
acquisitions in Guangxi represent the culmination of over a decade's worth of
project evaluation work conducted throughout China and East Asia, skillfully
managed by Paul Ingram, Bruce Harris and their technical team."


Mr. Salamis adds, "Our assessment of the newly acquired gold projects, and
others to come in Guangxi Province, further demonstrates that the geology,
structural characteristics and gold potential of the associated districts rivals
that found in any of the analogous multi-million ounce gold camps of Nevada,
USA."


With the recent opening of an office base in Nanning, the establishment of an
excellent working relationship with our Chinese joint venture partners and
active field crews managed by Paul Ingram, Caledon is now positioned to
capitalise on the gold potential of Guangxi Province.





                    For further information, please contact:


                               Stephen R Dattels
                         [e-mail]
                                 George Salamis
                         [e-mail]
           Donal Douglas, Manager Investor & Institutional Relations
                         [e-mail]
                             Caledon Resources PLC
                      22 Grosvenor Square, London W1K 6LF
                           Tel: [phone]
                           Fax: [phone]




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