SOURCE: Silver Dragon Resources Inc.

March 02, 2006 11:53 ET

Silver Dragon Acquires Cerro las Minitas Silver Mine in Durango, Mexico

TORONTO -- (MARKET WIRE) -- March 2, 2006 -- Silver Dragon Resources, Inc. (OTC BB: SDRG) is pleased to announce that it has acquired Cerro las Minitas, an operating silver mine located in Guadalupe Victoria, Durango, Mexico. As operator of the mine, Silver Dragon expects production at the mine to continue at between 50 and 100 tons per day for the remainder of 2006, with anticipated increases in production of up to 200 tons per day in 2007, and up to 500 tons per day beginning in 2008. Mining at Cerro las Minitas has produced average ore grades of 280 grams/tonne silver, with lead and zinc values of approximately 4% to 6%.

In addition to existing production capabilities, historical records indicate the presence of several potentially significant silver mineralized areas. As a result of recent geological mapping and extensive sampling, Silver Dragon plans to develop certain known mineralized structures. To further these plans, an extensive drilling program is expected to commence in anticipation of completing an NI 43-101 technical report.

The transaction requires payments totaling $1.5 Million and 2,110,000 restricted shares of common stock of the Company. Pursuant to the terms of the agreement, $500,000 was paid at closing, with two subsequent payments of $200,000 due six and twelve months post-closing and two further payments of $300,000 due twenty-four and thirty six months post-closing. One hundred ten thousand restricted shares of common stock were delivered upon closing with the remaining shares to be delivered within three months of closing.

"This is a significant achievement for Silver Dragon, to be able to acquire a silver mine with discovery potential for a large tonnage of silver deposits as well as good lead and zinc credits," commented Bill Reed, Manager of Exploration, Mexico. "A large scale drilling program will commence soon to prove up the existing resources while increasing the production of the existing active mine."

"We look forward to Cerro las Minitas being a highly valued producing asset in our portfolio of silver properties," commented Marc Hazout, President and Chief Executive Officer of Silver Dragon. "We will continue to aggressively pursue other similar producing operations with untapped exploration targets in proven silver districts around the world as we continue to expand our asset base in order to maximize shareholder value."

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 producing properties with significant untapped exploration potential. For more information, please visit

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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