Operational Update

    RNS Number : 2140I
  Van Dieman Mines plc
  14 November 2008
   
    

    14 November 2008

    VAN DIEMAN MINES PLC (the "Company")

    Operational Update

    The Board of Van Dieman Mines Plc, (AIM: VDM), the AIM listed mining company (the "Company") is pleased to report that, since it last
issued an operational update on 26 August 2008, significant progress has been made in implementing its revised mine development plan to
bring its Scotia alluvial tin and sapphire mine in Tasmania into production.

    *     The initial phase of confirmatory drilling has been completed, and the first assay results have been received by the Company. The
results received to date (about 25% of the total meterage) have been broadly consistent with the historic drilling, both overall and in
closely adjacent holes. There is evidence of significant payable tin in the lower part of what was previously defined as overburden, which
could lower the strip ratio and increase tin production per lineal metre of the channel. The channel is now reasonably well defined in the
initial mining area.
    *     Mining and dewatering progress has been steady, and an area of about 8,000m2 has been stripped to the water table or below. The
Company expects to have sufficient payable wash and overburden pre-stripped for one to two months processing by the time that the plant is
ready in December. The in-pit ore bin and pumping system is nearing completion, and will be installed in December.
    *     Despite the progress made on mining and processing at Scotia, significant uncertainty remains as to how to optimise the overburden
stripping and mining operation at Scotia. The Company is treating the first few months of operation and production as a trial mining and
processing phase, and expects to progressively review and revise its mine plan accordingly.
    *     Modifications to side B of the Scotia primary process plant ("Side B") are well advanced, with only electrical and plumbing
connections remaining to be completed. Modifications to Side B are expected to deliver an increase in production throughput from 150 bank
cubic meters ("bcm") / hour to 200 bcm / hour. The Company will be seeking an increase in operating hours to enable production from Side B
at the rate originally planned from both sides of the plant operating at the nameplate 300 bcm / hour
    *     The Directors currently believe that production at Scotia will commence in December 2008, with ramp up to 200 bcm / hour (12,000
bcm / week) achieved in January 2009. Full production of 18,000 bcm / week through the plant will depend on the application to extend
operating hours, and is currently scheduled for April 2009.
    *     Under the above plan, side A of the Scotia primary processing plant ("Side A") will be available for either Endurance or a second
mining site further north on the Scotia lead. The Company is examining various options to have both Endurance and a second Scotia mine site
in production by the end of 2009. 

    Confirmatory Drilling Program Completed
    The previously announced confirmatory drilling program on the first part of the Scotia lead was completed in early October. 36 holes
were drilled for a total of 682m. This was less than the planned total because the depth to the basement of the channel was somewhat less
than expected. Assays have been received for about 25% of the meterage, but with prioritisation of potential pay zones in the holes
immediately ahead of where mining will commence. The drilling results will be reported in detail by the Company when all of the assay data
is in hand, including duplicates and blanks, and can be fully analysed. The main outcomes of the drilling program to date have been as
follows.

    * A readily recognisable gravel "wash" zone about 6m to 8m thick has been intersected in the holes drilled into the main part of the
palaeochannel. This wash thins at the margin of the channel as basement shallows, and the Company now has sufficiently accurate mapping of
the channel to plan the first 6 months' mining. The wash zone is water-saturated and over-pressured and presented significant difficulties
in drilling and sampling, but protocols were established early in the program to optimise the reliability of the sampling.
    * The large size of the samples and the amount of water in them have resulted in a complex and time-consuming pre-concentration stage
for each sample on site, prior to delivery of the concentrate sample to the assay laboratory. Assay turnaround has been very good at one to
two weeks, but only about 40-50 samples per week can be pre-concentrated with the available equipment and experienced labour at site. It
will therefore be the end of the year before all assays are in hand. However, the Company has prioritised the pre-concentration of the
samples, and currently expects to be able to make a substantial announcement with details of the assay results of the key sections of the
most important holes early in December. 
    * The assay results received to date are broadly consistent with those reported from the historic government drilling, both overall and
at adjacent hole locations, and have given the Company the confidence to proceed with its mine plan. The grades are highly variable from
hole to hole, with average grades of the wash zone ranging from about 200 gm SnO2 / bcm to over 2000gm SnO2 / bcm, even in holes just 20 m
apart. Individual metre samples of wash range from