SOURCE: Silver Dragon Resources Inc.

October 16, 2006 08:00 ET

Silver Dragon Announces High-Grade Silver Assay Results, 1,417 Grams/45.56 Ounces per Tonne Silver From the First Newly Discovered Ag-Cu Ore Body at Laopandao, Inner Mongolia, China

BEIJING -- (MARKET WIRE) -- October 16, 2006 -- Silver Dragon Resources Inc. (OTCBB: SDRG) is pleased to announces the receipt of initial assays from the ongoing tunneling project at Laopandao at the Sino-Top projects in the Erbahuo Silver District in Northern China.

Laopandao is one of the nine properties of which Sanhe Sino-Top Resources and Technologies Ltd. ("Sino-Top"), a Chinese company, holds the exclusive exploration and mining rights, including a mine located in the Erbahuo Silver District in Inner Mongolia, China. Silver Dragon has been officially recognized by the Chinese Ministry Of Commerce ("MOC") and has received the MOC's Cerificate Of Approval for the transfer of a 60% equity interest in Sino-Top.

The Laopandao exploration area, covering 44 square kilometers, is located in Chifeng, Inner Mongolia. Mineralization zones have been found in the northern, central and southern parts of the area. Sino-Top conducted extensive geological and geophysical surveying on the surface of the area in 2005. The exploration work in 2006 has been focused on geochemical anomalies in the central part of the area to verify the positioning of the ore bodies. Currently, a 200m tunneling project is under way combined with a three-hole (600m) drilling project.

To date, 70 meters of tunneling and 24 meters of drilling have been completed. The initial assay results are as follows:

          Initial Assay Values from the Ongoing Tunnel LPYM6-01

           Position   Length      Au        Ag
Sample No.   (m)       (m)     (g/ton)   (g/ton)    Cu (%)    Sn (%)
           --------- --------- --------- --------- --------- ---------
01               1.8       0.6      0.12       6.0      0.11      0.10
           --------- --------- --------- --------- --------- ---------
02               1.8       0.6      0.07      18.8      0.19      0.41
           --------- --------- --------- --------- --------- ---------
03               1.8       0.6      0.10       152      0.96      0.08
           --------- --------- --------- --------- --------- ---------
04               1.8       0.5      0.10       456      2.84      0.02
           --------- --------- --------- --------- --------- ---------
05               7.0       0.6      0.10      13.1      0.10      0.00
           --------- --------- --------- --------- --------- ---------
06               7.0       0.8      0.12      81.0      0.86      0.05
           --------- --------- --------- --------- --------- ---------
07               7.0       0.8      0.12      82.0      0.43      0.02
           --------- --------- --------- --------- --------- ---------
08               7.0       0.8      0.11       304      1.90      0.02
           --------- --------- --------- --------- --------- ---------
09               9.0       1.0      0.12      41.6      0.78      0.02
           --------- --------- --------- --------- --------- ---------
10               9.0       0.5      0.10       188      1.92      0.09
           --------- --------- --------- --------- --------- ---------
11               8.0       1.0      0.12      1100      6.53      0.02
           --------- --------- --------- --------- --------- ---------
12                14       0.7       N/A      24.8      0.14      0.04
           --------- --------- --------- --------- --------- ---------
13                14       0.5       N/A      11.5      0.05      0.02
           --------- --------- --------- --------- --------- ---------
14                14       0.6       N/A      20.3      0.10      0.02
           --------- --------- --------- --------- --------- ---------
15                14       0.5       N/A      1417      8.10      0.01
           --------- --------- --------- --------- --------- ---------
Interpretation of the Initial Tunneling Results

The first Ag-Cu ore body has been identified within the first 15 meters of the tunnel. A one-meter-long sample taken at the limonite alteration zone, 2 meters into the tunnel assays 0.41% Sn and 0.19% Cu; sampling at the silver mineralization zone 8 meters into the tunnel assays 1,100 g/t Ag, 0.11 g/t Au and 6.53% Cu; a one-meter-long sample taken at the broken mineralization zone 13.5 meters into the tunnel assays 1,417 g/t Ag and 8.1% Cu; mineralization thins out at 14.7 meters; a broken alteration zone occurs at 23 meters; and an epidotization and silification alteration veinlet occurs at 30 - 35 meters. A branch tunnel is currently under way at 8 meters into the main tunnel. The first drill hole will verify the extent of the ore body at depths of 80 - 120 meters.

"We are very excited about the results obtained from our work program on the nine properties over the summer season, and will announce those results as they become available, as well as have them displayed at the Silver Dragon exhibit booth at the Bejing Mining Conference in November," said Marc Hazout, President and CEO of Silver Dragon. "The Erbahuo Silver District is one of the most prolific silver districts in the world and it is our intention to develop and monetize our interest which encompasses over 240 square kilometers of the District".

About Silver Dragon

Silver Dragon Resources Inc. is a mining and metal company focused on the exploration, acquisition, development and operation of silver mines in proven silver districts globally. Silver Dragon's objective is to acquire silver mining assets that contain promising exploration targets, have highly leveraged, out-of-the-money silver deposits, and/or are producing properties with significant untapped exploration potential. It is management's objective to grow Silver Dragon into a significant silver producer by developing the Cerro las Minitas and the Erbahuo projects in Mexico and China. For more information, please visit the Company's website at: www.silverdragonresources.com (now available in Chinese).

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

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