Equity/Debt Funding Complete

RNS Number:7688F
Van Dieman Mines plc
16 October 2007

                              VAN DIEMAN MINES PLC

            VDM Completes Equity and Debt Funding For Scotia Project

   * #5.5milion equity fund raising in place
   * A$15.4 (#6.6) million debt funding package finalized
   * Funding complete: allows Scotia production to commence by year-end 2007

16 October 2007: Van Dieman Mines plc ("Van Dieman" or "the Company"), the AIM
listed mining company which is developing its 100% owned tin and sapphire mines
in Tasmania, announces that it has successfully raised in total #5.5 million
before expenses in an equity fundraising conducted by Fox-Davies Capital.
Following the initial announcement made by the Company on 27 September, this now
completes the equity fundraising.

The #5.5 million equity fundraising will result in the Company issuing a total
of 55.7 million ordinary shares in the Company ("Ordinary Shares") and was made
up of two components. The Company has placed 45 million Ordinary Shares raising
#4.5 million at a placing price of 10p per Ordinary Share (the "Placing"). In
addition, the Company previously announced on 27 September 2007 it had issued a
loan note instrument that raised #1 million. The loan note instrument converted
automatically into 10 million Ordinary Shares following approval of resolutions
put to shareholders at the Extraordinary General Meeting that was held on 9
October 2007 ("EGM").

Conditional upon the Company paying initial deposits of A$3,666,508, the Company
has also successfully completed debt funding arrangements with an Australian
financial institution for A$15.4 million (approximately #6.6 million). It is
intended that the Company shall pay such deposits on receipt of the monies
payable pursuant to the Placing, being no later than 26 October 2007. These
initial deposits are flexible and will be available to the Company on completion
of certain milestones. The combined equity fundraising and the debt funding
package are to be used to fund plant and equipment for both the Scotia and
Endurance Mines that will allow production at the Scotia mine to commence around
year-end 2007. Drawdown of the debt facility is available until 31 October 2008.
The rate of interest of the facility will be the 90 day Bank Bill Rate + 5.75
per cent. per annum and the facility will mature on 31 October 2012.

Clive Trist, Managing Director, Van Dieman, commented:

"The #5.5m equity fundraising by Fox-Davies Capital and the debt funding package
will provide the funding required to bring the Scotia Project into production
around year end 2007. Once in production, and given high tin prices and the
strength of the sapphire market, we expect to generate positive cash-flow during
2008."

We are grateful for the vote of confidence we received from our existing
shareholders in the equity fund raising and the additional support from new
investors and private client investors."

ENQUIRIES:
VAN DIEMAN MINES plc                  Tel: [phone]
Clive Trist, Managing Director        Email: [e-mail]

GRANT THORNTON CORPORATE FINANCE      Tel: [phone]
Fiona Owen

FOX DAVIES CAPITAL LIMITED            Tel: [phone]
Richard Hail, Corporate Finance

BANKSIDE CONSULTANTS                  Tel: [phone]
Michael Padley / Libby Moss

The #4.5m Placing

The Company has received irrevocable undertakings from investors to acquire a
total of 45 million Ordinary Shares at a placing price of 10 pence per Ordinary
Share (the "Placing").

Loan Note Conversion

The Company previously announced on 27 September 2007 that it had executed a
loan note instrument that raised #1 million before expenses. The loan notes
converted into 10 million Ordinary Shares following the passing of resolutions
at the EGM on 9 October 2007. In consideration for their subscription, the
Company undertook to pay to the subscribers of the loan notes a commission of
#50,000 and interest of one per cent. per calendar month, both of which have
been satisfied by the issue of 700,000 Ordinary Shares.

Settlement And Dealings

Dealings in the 45 million Ordinary Shares under the Placing and the 10.7
million Ordinary Shares resulting from the conversion of, and payment for, the
loan notes, are expected to commence at 8.00 a.m. on Friday, 19 October 2007.

Following admission to trading on AIM, the Ordinary Shares under the Placing and
the Ordinary Shares resulting from conversion of, and payment for, the loan
notes, the Company will have 154,192,107 Ordinary Shares in issue, and these
Ordinary Shares, in total represent 36.1 per cent of the enlarged issued share
capital of the Company.

Fox Davies Capital acted as broker in relation to #5.5 million equity
fundraising and will receive a commission, and warrants to subscribe for a total
of 3.3 million Ordinary Shares at 10 pence per Ordinary Share, exercisable at
any time prior to 14 October 2012.

Ends

Notes for Editors

Background on Van Dieman (AIM: VDM)

VDM is in the process of developing its alluvial tin, sapphire and accompanying
mineral deposits in the northeast of Tasmania, Australia where it owns 15
exploration and retention licenses. Exploration and development planning consent
is now complete for VDM's Scotia tin and sapphire mine which is scheduled to
move to first production later this year. When in full production the Scotia
Mine will produce annually an estimated 700 tonnes of tin and 1.5 million carats
of mine rough gem quality sapphire. Thaisarco, the Thai tin smelter and refiner,
has agreed to take the Company's entire expected tin concentrate output of
1,350-1,500 tonnes contained tin per year once both the Scotia and Endurance
mines are in production. Agreements are also in place for the marketing of the
sapphire and spinel production.



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