RNS Number:2836O
Caledon Resources PLC
04 August 2003



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

   Caledon Signs Letter of Intent, Concluding the Second in a Series of Gold
                         Project Acquisitions In China

   *Caledon Resources has the right to earn an 81% equity interest in the
    Gaolong/Badu gold mining properties and surrounding exploration ground

   *Gaolong: Surface and limited underground mining can be traced in a
    semi-continuous manner over a strike length in excess of three kilometers,
    with mining widths averaging 10 to 30 m, to a maximum of 60 m wide

   *Badu: Surface mining can be traced in a semi-continuous manner for over
    four kilometers, with mining widths averaging 20 to 40 m

   *Caledon plans to target the shallow mineralized extensions of the
    existing mining operations in its pursuit of multi-million ounce ore-bodies

Overview

Caledon through its wholly owned subsidiary Blackwatch Resources Limited
("Blackwatch") is pleased to announce the successful the signing of a Letter of
Intent ("LOI") covering the Gaolong gold mining operation situated in western
Guangxi Province, Southern China. A full-form agreement is being finalised.

The addition of the Gaolong gold project to the Caledon portfolio is in line
with the company's strategy of completing well targeted, high potential,
advanced stage gold acquisitions in an emerging gold province.

Active mining has been underway at Gaolong since the mid-1990's by the Guangxi
Tianlin Gaolong Gold Mine Ltd Co. The mine itself is ranked in the top two gold
producers in the province and has been cited by the United States Geological
Survey (USGS) as having distinct similarities to the 15+ million ounce Betze ore
body situated in Northern Nevada, USA.

Gaolong and Badu

Under the terms of the Letter of Intent ("LOI"), Blackwatch (Caledon's wholly
owned subsidiary) can earn its 81% interest in the Gaolong and Badu projects
through the expenditure of US$1 million on exploration over a three year period
and by completing staged payments totalling US$350,000. In addition, upon
Caledon's decision to initiate commercial production on any ore-bodies
discovered within the JV tenements, Caledon must make a final cash payment of
US$5 million to the project partners.

The Gaolong project and mine site area is situated 60 kilometres north west of
the regional town of Tianlin in northwestern Guangxi. The main target area is
the Gaolong mine, an active gold mine producing gold from a number of small
open-pit operations, with gold reserves of approximately 400,000 ozs.

Gold grades well in excess of 10 g/t Au are common throughout the deposit, and
it is these higher grade, bulk-tonnage "feeder zones" that will form the main
focus of Caledon's exploration work over the coming months. Preliminary
assessment of the area has highlighted the multi-million ounce gold potential on
extension from existing mined zones, which to date have only been mined to
shallow depths.

The deposit has been cited in various United States Geological Survey (USGS)
studies as having clear similarities to the 15+ million ounce Betze ore body,
situated in the Carlin district of Nevada, USA (from USGS publication: Peters,
1997, 2000a, b; Peters and others, 1998, 2000).

Small scale mining is also in progress at the Badu Mine, situated 12 km NE of
the Gaolong mine. The Badu mining and exploration tenements are included within
the Gaolong master agreement. The GTGGML's open-pit mining operations at Badu
can be traced in a semi-continuous manner for over four kilometres along strike,
with mining widths averaging 20 to 40 m. Gold is recovered in the heap leaching
of oxide ores, with average head grades of 1 to 2 g/t gold.

George Salamis, Managing Director of Caledon reports: "We are very pleased with
the rapid progress that we've made in signing the Letter of Intent at Gaolong -
this being our second project acquisition of an advanced stage gold exploration
project in 5 weeks. This is a credit to the dedication of our people on the
ground, managed by Paul Ingram, and as well to the hard work and goodwill of our
partners at the Gaolong gold mine and the CNGGC. We are looking forward to
working with our partners towards the discovery of a world-class Carlin-style
ore body."

Caledon Resources PLC is listed on the Alternative Investment Market (AIM) in
London and its shares trade under the symbol CDN.

On behalf of the board

Stephen R Dattels                            George Salamis
Executive Chairman                           Managing Director


For further information, please visit our website at www.caledonresources.com or
                                    contact:

                               Stephen R Dattels
                         sdattels@caledonresources.com

                                 George Salamis
                         gsalamis@caledonresources.com

                       Donal Douglas, Investor Relations
                         ddouglas@caledonresources.com

                             Caledon Resources PLC
                     18 Upper Brook Street., London W1K 7PU
                           Tel: +44 (0) 20 7529 7512
                           Fax: +44 (0) 20 7491 2244






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