VDM Van Dieman

RNS Number:7047G
Van Dieman Mines plc
26 July 2006

26 July 2006

VAN DIEMAN MINES PLC

Positive response from US to sapphire and other gemstone samples

Van Dieman ("Van Dieman" or "the Company"), the AIM listed mining company, which
is developing tin and sapphire mines in Tasmania, announces that the initial
samples of sapphire have been extremely well received in the USA. Quality has
proven to be excellent and a potentially lucrative market has been identified
for the spinel gemstone by-product.

Sapphire Evaluation

   *To date, some 6,000 carats of mine run sapphire has been shipped to the
    Company's contracted laboratories in the USA for sorting, grading, cutting
    and evaluation. By early August, sorting of remaining stockpiled material is
    expected to yield a further 5,000 to 10,000 carats of mine run sapphire for
    shipment to the USA.

   *Results from laboratory evaluation of small pilot plant parcels of
    sapphire shipped earlier this year have confirmed the Company's expectations
    regarding quality. Evaluation of the larger parcels that have been and are
    being shipped is expected not only to confirm quality but also to provide
    valuable information regarding yields and size distribution. This
    information and samples produced from this programme are an essential
    component in successfully marketing the sapphire to the major buyers in the
    US jewellery market.

   *Following the successful pilot plant bulk sampling programmes at approved
    sites on the Company's tenements at Weld, Wyniford and Frome Rivers approval
    has now been secured for the pilot plant to undertake further bulk sampling
    at Main Creek at Welborough and at a site on the Great Northern Plains
    adjacent to its Scotia mining lease.

   *During the first half of this year, the Company's directors attended the
    Tucson and Las Vegas gem shows in the USA. Feedback they received from
    exhibitors, buyers and industry contacts confirms that the sapphire market
    has polarised into two segments, namely beryllium-diffused sapphire and
    natural sapphire (non heat treated and heat treated). An ongoing shortage of
    natural sapphire which can be verified as fair trade, provenanced stone was
    evident at these shows and is seen as supporting price stability for quality
    stone. US Census Bureau statistics show imports of sapphire for 2005 rose by
    6.7% and represented 23% of total gem imports.

These developments augur well for this segment of the Company's business as it
moves into production later this year.

New Product

   *The Company has received advice from its USA marketing partners regarding
    samples of cut spinel that they have been showing to the US jewellery
    industry. Responses received from the market indicates that the quality of
    this material is excellent and that it will find a ready application in the
    US as a jewellery substitute for 'black diamond'.

   *Produced as part of the Company's ongoing pilot plant programme, some
    60,000 carats of mine run spinel have been sorted and shipped to the USA and
    approximately 3,500 carats have been cut for sampling to the industry. Over
    the next few weeks sorting of stockpiled material processed from the pilot
    plant is expected to yield a further 10 kg of mine run spinel which will be
    shipped to the USA for grading and cutting, generating a further 50,000
    carats of cut material.

   *Until now spinel, which is present in sizeable quantities in the Scotia
    and Endurance ore bodies, had been considered a waste product and of no
    value.

While much remains to accurately quantify the market, initial indications of
demand and achievable pricing suggest cut spinel has the potential in the short
term to generate revenues in excess of US$1.5 million per annum for the Company.

ENQUIRIES:

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

BANKSIDE CONSULTANTS                      Tel: +44 (0) 20 7367 8888
Michael Padley / Daniela Hale

Note:

Mine Run Sapphire - sapphires that have been extracted by the pilot plant.

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.



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

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