SOURCE: Silver Dragon Resources Inc.

October 10, 2006 08:00 ET

Silver Dragon Cuts 3,940 Grams per Tonne/126.7 Ounces Silver in Drill Intersections of Ag-Pb-Zn Mineralization at Cerro Las Minitas Project, Mexico

DURANGO, MEXICO -- (MARKET WIRE) -- October 10, 2006 -- Silver Dragon Resources Inc. (OTCBB: SDRG) is pleased to announce the receipt of assays from the sixth drill hole, Drill Hole LM-06, at its Cerro Las Minitas Project in Durango, Mexico.

Drill Results from Drill Holes LM-06

Drill Hole LM-06 was drilled to a depth of 151.5 meters at an angle of -75° to further test the La Chiva structure at Puro Corazón and also to test strata believed to be favorable for manto mineralization. Ag-Pb manto mineralization was cut in two intervals summarized in the table below. The La Chiva structure was not intersected because it was faulted out of the drill section. Two intercepts cut in LM-06, summarized in the table below, returned grades of economic interest. Reported intervals are measured core lengths, and their true widths have yet to be determined.

Highlights from Drill Hole LM-06 are:

 -- @ 2.0 metres downhole:  2.90 metres @ 2895 g/t (93.1 oz/ton)
                            silver, 339 ppm lead, 1172 ppm zinc,
                            and 3678 ppm copper

    Including:    1.00 metres grading 911 g/t (29.3 oz/ton) silver, 35
                  ppm lead,  1005 ppm zinc, and 1220 ppm copper
    And:          1.90 metres grading 3940 g/t (126.7 oz/ton) silver,
                  499 ppm lead, 1260 ppm zinc, and 5110 ppm copper


 -- @ 102.85   metres downhole:   2.25 metres grading  378 g/t (12.15
                                  oz/ton) silver, 7.75% lead, 6.56%
                                  zinc, and 0.02% copper

    Including:    0.65 metres grading  527 g/t (16.95 oz/ton) silver,
                  13.6% lead,  10.5% zinc, and 0.20% copper
    And:          1.05 metres grading  405 g/t (13.02 oz/ton) silver,
                  6.27% lead,  4.19% zinc, and 0.03% copper
Weighted Average (Composite) Assay Values for Intercepts cut in Drill Hole LM-06

Interval     From    To    Length       Ag      Pb        Zn         Cu
              (m)    (m)    (m)
LM-06-1      2.00    4.90   2.90  2895 g/ton  339 ppm  1172 ppm   3768 ppm

including    2.00    3.00   1.00   911g /ton   35 ppm  1005 ppm   1220 ppm
and          3.00    4.90   1.90  3940 g/ton  499 ppm  1260 ppm   5110 ppm

LM-06-2     102.85  105.10  2.25   378 g/ton   7.75%     6.56%    2602 ppm

including   102.85  103.5   0.55   527 g/ton   13.6%     10.5%    2530 ppm
and         104.05  105.10  1.05   405 g/ton   6.27%     4.19%    3530 ppm
Interpretation of Drill Results

Drill Hole LM-06 did not intersect the La Chiva mineralized structure because the structure appears to have been faulted out of the drill section. However LM-06 did make two intersections of merit in the manto environment we have found to exist west of Puro Corazón, Intercept LM-06-1 cut intensely weathered rock near surface. Rock in the core was extremely weathered and acid-leached. That intercept appears to be an example of supergene enrichment of a manto horizon due to weathering. Base metals (except copper) were largely leached from the zone and silver values were enriched. Intercept LM-06-2 was also found to be somewhat weathered, but very much less so. Mineralization in that intercept consists of disseminated to massive lead and zinc sulfides replacing carbonate strata (manto). The aspect of mineralization in the core suggests that the intercept was made peripheral to a manto body and may have only intercepted the margin of the body. Preparations to test these discoveries further with underground drilling from existing workings at Puro Corazon are in progress.

Results from drill holes LM-01 through LM-06 indicate that a previously unknown area of manto mineralization exists to the west of Puro Corazón. These drill holes tested an area only 300 X 600 meters and data in hand suggest that is only a part of the prospective area. A focused program of drilling from underground workings to test this zone further has been planned and preparations are underway to begin that drilling. The underground drilling will allow us to test that area at considerably lower cost than by surface drilling and to make a considerably more focused test of the mineralization there.

No mining or previous exploration has been done in the area west of Puro Corazón and discovery of manto mineralization there has shown large new potential in the district.

District Exploration

Field exploration there has shown a new mineralized area approximately 300 meters to the southeast of La Bocona. Although no previous mining has been done in that area, field geologists have found mineralized float there and have found zinc values as high as 3.5% in soil samples. Field exploration has also shown that a previously unknown intrusive body is present. Exploration geologists believe that this area is the surface expression of a previously undiscovered skarn and manto system like that known in the main part of the district to the west. Systematic surface sampling is now underway. Surface sample results will be used to target trenching and future drilling. This discovery ranks as the most exciting that has yet been made at Cerro Las Minitas as it has revealed a large mineralized area near surface that has not been previously exploited.

Mr. Douglas R. Wood, P. Geo., a "qualified person" within the meaning of NI 43-101, prepared the technical information disclosed in this news release.

About Cerros las Minitas

Cerros las Minitas is comprised of 16 concessions covering 1423 Hectares. It is located 68 kilometers northeast of the city of Durango, Mexico and comprises the Cerro Las Minitas mining district, part of the prolific silver belt of the Sierra Madre Occidental. Silver Dragon Resources Inc. through its wholly owned Mexican Subsidiary Silver Dragon Mining de Mexico S.A. De C.V. acquired the exploration and mining rights to the property in March 2006.

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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