Resource Valuation Update

RNS Number:6414N
Van Dieman Mines plc
12 December 2006




                             VAN DIEMAN MINES PLC

                          Resource Valuation Update

Van Dieman Mines plc ("Van Dieman" or "the Company"), the AIM-listed mining
company which is developing tin and sapphire mines in Tasmania, announces a
project valuation following a review by independent consultants. The
tin-sapphire project is now valued at A$83 million on a before-tax cashflow
basis.

Previous exploration and mining activity in the Van Dieman's Tasmanian licence
areas have outlined substantial economic tin mineralisation. Recent work by Van
Dieman has revised the estimated Proved Ore Reserves and Measured, Indicated and
Inferred Resources classified to JORC Code requirements. These have provided the
basis for the detailed economic analysis and project valuation by Terence
Willsteed & Associates, Consulting Mining Engineers.

The values attributed in the Van Dieman financial projections includes the
significant sapphire and heavy mineral content, data for which has only been
derived from reconnaissance sampling, bulk testing, results from adjoining
project areas and evidence from tailings and mining reports from previous
operations. To conform with JORC Code requirements, these are defined as
Inferred Resources although they occur within Proved Tin Reserves.

Cash flow estimates have been prepared for the Ringarooma and Scotia production
projects based on the mine production schedules derived from the estimated
reserves and resources and economic estimates prepared by Van Dieman. The
estimates are generally considered to be of Feasibility Study order of accuracy.

The Van Dieman Tasmanian tin-sapphire project is valued at A$83 million in a
range of A$74 million to A$92.5 million on a before-tax cash flow basis and at
A$62 million in a range of A$53 million to A$70 million on an after-tax cash
flow basis, based on the Van Dieman estimates of tin reserves and resources and
recoverable sapphire and by-product resources, using the proposed production
programme and engineering estimates, in the planned production projects and
including the value of the indicated mineralisation in its extensive onshore and
offshore exploration areas.

The valuation depends substantially on tin metal price projections. In August
2006 Van Dieman purchased a tin marketing report from Resources & Technology
Marketing Services Pty Ltd (R.T.M). The valuation is based on tin price
projections contained in the RTM report. The projected tin price is varied over
a ten year period commencing at US $8,800 in the first year of production and
increasing annually in line with price projections contained in the R.T.M.
report. The Tin price in the ten years prior to 2003 has ranged between US$4,000
per tonne and US$5,500 per tonne. During 2003-2004 tin price escalated to exceed
US$8,000 per tonne although short-term market volatility saw the price fluctuate
between US$6,000 and US$9,000 per tonne. RTM consider a long term price
structure of US$9,000 to $10,000 per tonne as appropriate, but they noted that
short-term price volatility is likely to remain an intrinsic part of the
industry.

Neil Kinnane, Director - Exploration & Development; commented:

"Over the past twelve months, in conjunction with preparation of the Development
Plan and Environmental Management Plan ("DPEMP") submissions for the Scotia and
Endurance Projects, we have continued exploration activities within the
Company's other tenements. Feasibility study updates for Scotia and Endurance
and encouraging exploration results prompted your Directors to seek an updated
valuation of the Company's assets. The independent valuation of Van Dieman's
production and exploration projects was prepared in accordance with the VALMIN
and JORC Codes (AusIMM) by Terence Willsteed & Associates of Sydney.

"Bulk testing for gem minerals continues and preliminary results of testing and
marketing studies are beginning to flow back to the company. Preliminary
geophysical test work involving Ground Penetrating Radar ("GPR") and seismic
refraction have been completed and are being assessed as a tool to provide more
accurate GIS control ahead of the advancing mining faces at Scotia and
Endurance. Encouraging results are being obtained from the Monarch, Pioneer and
Boobyalla Licence areas and your company hopes to be able to announce new and
improved resource bases for those areas early in the New Year.

"Work is continuing on the more accurate delineation of the massive Great
Northern Plain and Offshore resource areas. Improved Global Positioning System
("GPS") data is currently being entered into the company database and a
recalculation based on this more accurate data is underway. This re-assessment
will be followed early in the New Year by an upgraded feasibility study.

"In 2007, in addition to the commencement of first production, we expect to be
in a position to announce enhanced exploration results and the upgrading of the
overall Company resource base."

                                                               12 December, 2006

ENQUIRIES:

VAN DIEMAN MINES plc                      Tel: [phone]
Clive Trist    Managing Director          Email: [e-mail]
Neil Kinnane   Director                   Email: [e-mail]
               Exploration & Development

GRANT THORNTON CORPORATE FINANCE          Tel: [phone]
Fiona Owen

BANKSIDE CONSULTANTS                      Tel: [phone]
Michael Padley / Daniela Hale

Notes on the Company

Van Dieman Mines is developing tin and sapphire mines in north east Tasmania
where the Company holds several leases. The Scotia and Endurance mines are
expected to be in production during the first half of 2007. A pilot plant has
been operating in tenements close to and adjoining the Scotia lease since
November 2005. The plant has produced mine run corundum including sapphire and
associated semi precious gem material including topaz, zircon and spinel for
evaluation by the Company's contracted laboratory in the US.

A six-year contract was signed in July 2005 with tin smelter and refiner,
Thaisarco (an Amalgamated Metal Corporation plc subsidiary), for the off-take of
the Company's entire tin concentrate output of 1,350 to 1,500 tonnes contained
tin per year at prevailing LME prices. In addition, an agreement has been signed
with a well-known and highly respected US jewellery and gemstone marketer to
market the sapphire production, and the potential market for the spinel gemstone
by-product is continuing to be evaluated. The initial marketing for both
products is underway and the Company should be in a position to give a detailed
update by the end of the year.

The VALMIN and Joint Ore Reserve Committee ("JORC") Codes are mineral valuation
and ore reserve reporting codes as established by the Australasian Institute of
Mining & Metallurgy ("AusIMM"). Terence Willsteed, the principal of Terence
Willsteed & Associates, is a Fellow of the AusIMM.


All references to resources and exploration results have been approved for
release by Neil Kinnane, Director of Van Dieman Mines, who is also a Fellow of
the AusIMM and holds Chartered Practising Geologist (CPGeo) accreditation with
that organisation.


The term "Feasibility Study" is used in this release in the context of the JORC
Code of the AusIMM, specifically:

"Appropriate assessments, which may include feasibility studies, have been
carried out, and include consideration of and modification by realistically
assumed mining, metallurgical, economic, marketing, legal, environmental, social
and governmental factors. These assessments demonstrate at the time that
extraction could be reasonably justified."




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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                      This information is provided by RNS
            The company news service from the London Stock Exchange

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