Progress to First Production

RNS Number:1866H
Van Dieman Mines plc
03 August 2006

3 August, 2006

VAN DIEMAN MINES PLC

Progress to First Production - expected Q4 2006

Van Dieman Mines plc ("The Company") announces that despite delays on delivery
schedules from plant and equipment suppliers, its start up programme is well
advanced and first production from its Scotia mine, Tasmania is expected during
the fourth quarter of 2006.

Project Highlights

   * Development Proposal & Environmental Management Plan (DPEMP) - completed
     and consultants well advanced in achieving final approval
   * Treatment Plant - delivery of several major components including screens
     and the gravel / slurry pumps were subject to extended delivery delays.
     However, the trommel screens are now installed and trommel components
     completed. Delivery of gravel and slurry pumps from USA supplier now
     confirmed Subject to no further delays in delivery of components, the first
     plant will be ready for shipment at the end of August
   * Shipping - an international shipping group has been retained to
     supervise and expedite shipment of the treatment plant out of the USA. Ship
     space is booked and arrangements made at the Tasmanian end for road
     shipment and unloading at site.
   * Treatment Plant Electrics - electrics and control systems designed and
     supplied in Australia by Australian contractors to comply with Australian
     standards
   * Earthmoving Plant - dry hire contract agreed and delivery of plant
     confirmed
   * Conveyors - contract for design, supply, erection and commissioning
     ready for execution
   * Energy Supply - the electricity authority has confirmed supply for
     treatment plants and provided tariff schedules
   * Standby Power - generator sets for treatment plant standby power and
     conveyor main power supply sourced and delivery confirmed
   * Diesel Fuel Supply - final negotiation of contract for supply of fuel
     conducted with BP and ready for execution
   * Mine Manager - the Company has made an offer to a suitably qualified
     mine manager; confirmation is dependent on a Duty of Care Risk Assessment
     following a Fitness for Work medical
   * Staff - core process plant operators and maintenance staff have been
     recruited
   * Occupational Health & Safety - protocols, including random drug and
     alcohol testing, in place
   * Insurance - cover arranged for the shipment of plant and equipment and
     consequential loss during shipment and construction on site

In order that the Company is fully prepared for the arrival of the plant and
equipment at the Scotia mine site, application has been made for permission to
upgrade the existing access road into the mine site to accommodate heavy
earthmoving equipment, construction equipment and container transport vehicles.
It is intended that the necessary road works will be completed prior to the
granting of the DPEMP approval to commence mining operations.

Earlier this month the CEO and Project Manager from the treatment plant
supplier, Goldfield Engineering, visited Tasmania to inspect the mine sites and
for discussions regarding the site preparation, manpower and equipment required
for plant erection. As a result, the Company now has the programme for
commissioning in place

Equipment has begun to arrive to fit out the tin shed and sapphire sorting
facility. The facility is currently being used to treat tin concentrates and
sapphire from the pilot plant operations.

Discussions have been held with the contracted tin smelter, Thailand Smelting
and Refining Co Ltd (Thaisarco) regarding procedures for the shipment of
concentrate to their smelter in Phuket. Protocols are also in place for the
secure transport of the sapphire and gold to the Company's marketing partner in
the USA.

Clive Trist, Managing Director, Van Dieman Mines plc, commented:

"Much has been accomplished over the past six months. We have made excellent
progress with the mine itself; we secured an off-take agreement for the tin last
year; the sapphire marketing in the US has gone well and we recently announced
that we have identified another revenue stream from the spinel gemstone
by-product.

The Board remains very positive regarding the prospects for the Scotia mine.
Providing current supplier delivery schedules for plant and equipment can be
maintained and DPEMP approval is forthcoming, the Company confidently expects to
commence production during the fourth quarter this year."

ENQUIRIES:

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

BANKSIDE CONSULTANTS                       Tel: [phone]
Michael Padley / Daniela Hale              Email: [e-mail]

Note:

Spinel - is a semi precious mineral, basically aluminum oxide with variable
amounts of magnesium, iron, nickel and chromium. For centuries, most gem spinels
were thought to be rubies or sapphires - a reasonable assumption, because both
spinel and corundum are found in the same deposits and have similar properties.







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