VDM Van Dieman

RNS Number:5838E
Van Dieman Mines plc
27 September 2007

27 September 2007

                              VAN DIEMAN MINES PLC

 Placing Provides Basis For Completing Funding And Production By Year End 2007

Van Dieman Mines plc ("Van Dieman" or "the Company"), the AIM listed mining
company which is developing 100% owned tin and sapphire mines in Tasmania,
announces that it has it has raised #4.5 million by way of a placing of 35
million ordinary shares in the Company ("Ordinary Share") at a placing price of
10p per Ordinary Share and a further #1 million has been raised by way of an
aggregate nominal amount of convertible unsecured loan stock. The raising of
#4.5 million is the first tranche of a #5 million placing being undertaken by
Fox Davies Capital Limited on behalf of the Company.

The fundraising of #4.5 million meets the minimum equity requirement to be able
to finalise debt financing associated with the Scotia Project. As previously
announced, an offer of debt funding has been received from an Australian
financial institution for Australian $15.4 (approximately #6.6) million to fund
plant and equipment for both the Scotia and Endurance Mines. The debt finance
offer is conditional, inter alia, on the Company raising further equity of not
less than Australian $10.5 (approximately #4.5) million and definitive
documentation.

The fundraising is conditional upon the passing of the resolutions set out in
the notice of extraordinary general meeting dated 14 September 2007.

Clive Trist, Managing Director, Van Dieman, commented:

"This is a very positive endorsement by our investors of the Company's strategy
and now provides the basis for taking forward the full funding of the Scotia
Project. As well as support from our existing investors, the placing has been
taken up by new investors and private client investors."

"After 2 years of licence and financing delays, the Directors believe that there
are no longer any material issues holding back development of the Scotia Project
and, given that tin is at an all time high and the sapphire market is very
strong, the Directors believe that the Company has an extremely positive future.
We have commenced infrastructure construction in preparation for commencement of
production at the Scotia mine by the end of 2007 and expect to become cashflow
positive in 2008."

ENQUIRIES:
VAN DIEMAN MINES plc                  Tel: +61 (0) 2 8908 5103
Clive Trist, Managing Director        Email: clive.trist@vandiemanmines.com

GRANT THORNTON CORPORATE FINANCE      Tel: +44 (0) 870 991 2318
Fiona Owen

FOX DAVIES CAPITAL LIMITED            Tel: +44 (0) 20 7936 5230
Richard Hail, Corporate Finance

BANKSIDE CONSULTANTS                  Tel: +44 (0) 20 7367 8888
Michael Padley / Libby Moss

The Placing

The Company has received irrevocable undertakings from investors to acquire a
total of 35 million Ordinary Shares at a placing price of 10 pence per Ordinary
Share (the "Placing"). The Placing of the Ordinary Shares is conditional, inter
alia, on the passing of the resolutions increasing the directors authorities to
allot securities and disapply pre-emption rights (the "Resolutions") as
described in the notice to shareholders contained in the circular sent to the
shareholders dated 14 September 2007 ("EGM"). The EGM has been convened for 10am
on 9 October 2007.

Loan Note Instrument

The Company has yesterday executed a Loan Note Instrument raising a further #1
million. Under the terms of the Loan Note Instrument the Company has created and
authorised the issue of #1,000,000 interest-bearing nominal unsecured
convertible loan notes denominated in units of #0.10 (the "Loan Notes"). The
Loan Notes will convert automatically into 10 million Ordinary Shares following
the passing of the Resolutions at the EGM. Interest on the Loan Notes shall be
charged at the rate of 1 per cent per calendar month. In the event that the
Resolutions fail to be approved at the EGM, interest shall accrue at the rate of
2 per cent per calendar month up until the first anniversary of the issuance,
and at the rate of 3 per cent per calendar month thereafter.

In consideration for their subscription, the Company has undertaken to pay, to
the subscribers to the Loan Notes, a commission of #50,000 to be satisfied by
the issue of an additional 500,000 Ordinary Shares in the Company. The terms of
the Loan Note also state that in the event that the amount raised from the
Placing is more than #1 million but less than #3 million the Company has
undertaken that as further consideration it will pay a further commission of
#50,000 to be satisfied by the issue of a further 500,000 Ordinary Shares.

The holders of the Loan Notes who own 19,685,000 Ordinary Shares representing
19.99% of the current issued share capital of the Company, have irrevocably
undertaken to vote in favour of the Resolutions at the EGM.

Placing Agreement

The Company announces that yesterday it has entered into a placing agreement
with Fox-Davies Capital Limited ("Fox-Davies") pursuant to which Fox-Davies
agreed to use its reasonable endeavours, as agent for the Company, to place the
Placing Shares at the placing price of 10p ("Placing Price") with certain
institutional and other investors (the "Placing Agreement"). The Placing
Agreement is conditional upon, inter alia, the Resolutions being duly passed at
the EGM and Admission becoming effective on or before 8 a.m. on 15 October 2007
(or such later time and/or date as the Company and Fox-Davies may agree), but in
any event by no later than 8 a.m. on 31 October 2007.

Settlement and Dealings

If the Resolutions are passed at the EGM and the Placing is completed, dealings
in the new Ordinary Shares under the Placing and the conversion of the Loan
Notes and the allotment of the further 500,000 Ordinary Shares pursuant to the
Loan Note Instrument will commence at 8.00 a.m. on 15 October 2007.

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.



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

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