Statement re new contract

RNS Number:1321P
Van Dieman Mines plc
21 July 2005



                           VAN DIEMAN MINES PLC                (AIM: VDM)


           Tin concentrate smelting and purchase agreement signed


Van Dieman Mines Plc ("Van Dieman" or "the Company") is pleased to announce that
it has signed a six-year contract with Thailand Smelting and Refining Co Ltd ("
Thaisarco") for the smelting and purchase of its entire output of tin
concentrates from the Company's mining operations under development in north
eastern Tasmania.


Highlights
     
*    This agreement provides for the smelting and purchase of the entire
     projected mine output of 1,800 to 2,000 tonnes per year of 75% tin 
     concentrate, to yield approximately 1,350 to 1,500 tonnes per year of tin.

*    The agreement covers the period from the date of the first concentrate
     shipment, expected to be during Q2 2006, up to the end of 2009, with the 
     option of an additional three-year extension.

*    It will therefore parallel the planned entry into production of Stage I of 
     Van Dieman's tin and sapphire mining operation, scheduled to commence by Q2
     2006 with the development of the Scotia lease, for which a mining lease was
     granted in early July 2005.

*    The contract is based on the LME tin price at the time of delivery of
     concentrate.   Van Dieman will receive 80% of the value of the tin content 
     on delivery, and the remaining 20% (less smelting and refining charges) on
     completion of treatment.  At current tin prices, the total value of the 
     contract to Van Dieman is some US$60m-US$70m.

*    Thaisarco, which is 75% owned by LME-member company Amalgamated Metal
     Corporation, has full LME accreditation as a producer of tin of 99.9+% 
     purity.


Clive Trist, CEO of Van Dieman Mines Plc, commented:

"The signing of this smelting agreement under favourable terms with Thaisarco
takes Van Dieman a further important step towards its declared goal of
developing profitable tin and sapphire mining operations in Tasmania.

"The contract will underpin the projected cash flow from the production of tin
concentrates by the Company over the initial phase of mine life, with additional
provision for potential extensions.

"The timing of this agreement demonstrates again that Van Dieman Mines remains
firmly on track, adhering closely to the timetable set out in its prospectus for
the planned development of the mining, processing and marketing of its tin and
sapphire products".


          21 July, 2005


For more information

Clive Trist, Van Dieman Mines               Tel: [phone]
E-mail:[e-mail]

Laurence Read/ Leesa Peters, Conduit PR            Tel: [phone]
E-mail: [e-mail]


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