SOURCE: Silver Dragon Resources Inc.

February 21, 2006 07:30 ET

Silver Dragon Report of Exploration Program on Aobaotugounao Property, Northern China

BEIJING -- (MARKET WIRE) -- February 21, 2006 -- Silver Dragon Resources Inc. (OTC BB: SDRG) today announced results of the comprehensive work program completed in 2005 on the Aobaotugounao property located in the Erbahuo Silver District in Northern China. Silver Dragon currently has a joint venture agreement with Sino Silver Corp. whereby Silver Dragon acquired 50% of Sino Silver's interest in the net proceeds from the sale of minerals or the sale of mining rights as a result of the exploration, evaluation and development of the Aobaotugounao property.

The Aobaotugounao Ag-Pb-Zn mineralization district is located in the southwest part of the Daxingan mountain range, where the Huangganliang composite anticline presents good ore-forming conditions. The area covers a total of 37.18 km2. Skarn style mineralization occurs at the contact of granite porphyry intrusives and sedimentary rock. Two mineralized zones have been previously outlined. The No.1 zone has been outlined for 30 metres and over a width of 1-2.5 metres. Pb values range between 0.62-0.93%, Zinc values range from 0.75-0.79% and Silver values range from 265-532 g/t. The No. 2 zone shows silver values as high as 668 g/t.

Exploration work in 2005 proved that the known geochemical anomaly is caused by multiple-metal mineralization. Mineralization is found in altered rhyolite in the southwest part of the district and in nine distinct alteration bodies of rhyolite and rhyolite tuffs in the northeast part of the district. Geochemical survey results show that altered rocks have high Ag, Pb, and Zn contents, especially in the north part of the district. Surface samples of the alteration bodies show silver content of over 30 grams per tonne, lead content over 2000 x10(-6), and zinc content over 2000 x10(-6). Electrical sounding shows that 150 meters below the alteration body, induced polarization anomalies exist, indicating possible blind ore bodies at depth.

The 2005 work consisted of:

--  0.5 km2 of detailed geological mapping at a scale of 1:2000;
--  4 km2 of 1:5000 electrical survey;
--  10,000 meters of 1:2000 geologic and geochemical survey profiles;
--  5,100 meters of 1:2000 electrical survey profiles;
--  7,100 meters of 1:2000 magnetic survey profiles;
--  568 cubic meters of exploratory trenches;
--  56 samples submitted for chemical analysis;
--  331 samples submitted for full spectrum analysis; and
--  12 samples submitted for mineralogical analysis.
Geologic mapping confirmed that the rocks exposed in the district are Upper Jurassic Manketou Ebo formation J3m mainly, being felsic lava (rhyolite) and volcanic pyroclastic rocks (rhyolitic ruff). Influenced by the NE trending intrusion, the rock beds are NW trending, dip to SW with 20-40 degrees dip angle in the south part of the district; while in north part of the district the rock beds are NW trending, dipping NE at 60-80 degrees. In the district, the alteration includes silicification, limonitization, weak chloritization, epidotization, sericitization, kaolinization, and fluoritization. Alteration minerals within the alteration zone strike NW, relating closely to the mineralization.

Geochemical survey results show that the rhyolite and rhyolitic tuff with limonitization and silicification have silver, lead and zinc mineralization. In the south part of the district, there are three geochemical anomalies. In the north part of the district, altered rocks contain high Ag, Pb, and Zn contents. This indicates that the altered rocks are mineralized bodies and potential multiple metal ore bodies could exist at depth.

Five geochemical and geophysical survey profile lines (A1-A5) were measured and mapped. Four of the profiles (A1-A4) were intended to define mineralization in the southeastern portion of the concession area. Three primary mineralization halos (I, II and III) were shown to exist, trending NW/SE (delineated by profiles A1, A2 and A3). Profile A4 confirmed the assumption that mineralization is cutoff to the southwest of the three mineralization halos within the concession area. Profile A5 confirmed mineralization potential of the northeastern portion of the concession.

Magnetic measurements in the field show no significant variation between rocks, with no rocks of magnetic characteristic. As such, geologist are pleased that it can be concluded that the previously measured geochemical anomaly (No. 43) determined by the dispersion strain method is related to altered rocks with obvious electrical anomalies.

Three major electrical anomalies (with Fs > 5%) were measured in the field by induced polarization in the northeast portion of the district. All are round in shape with E-W strike. Anomaly IP1 is 1000m long, and 100-300m wide. The west end of the anomaly is not closed. Anomaly IP2 is 550m long, and 100-200m wide. The east end of the anomaly is not closed. Anomaly IP3 is 750m long and 100-500m wide. The west end of the anomaly is not closed.

On the IP1 and IP3 electrical anomalies, two electrical sounding profiles were made. The results show that at 150 meters below the surface, induced polarization anomalies exist. The altered bodies with silicification and limonitization on the surface have electrical anomalies both on the surface and at depth. As anomaly strength increases with depth, there is significant potential for the discovery of existing blind ore bodies of silver, zinc and lead in the deeper zones. In the next step of exploration, the high resolution electrical survey should be used to evaluate the three electrical anomalies to give more information about occurrences of the anomalies and possible blind ore bodies.

A total of 331 surface samples from a regularized sample grid were submitted for geochemical analysis. The results show that Ag, Pb, and Zn average contents in the Jurassic volcanic series are 0.3 x10(-6), 33 x10(-6), and 148 x10(-6) respectively, which are 3.8, 2.8 and 1.6 times higher than that in the crust. In altered rocks, Ag, Pb, and Zn average contents are 8.14 x10(-6), 697 x10(-6), and 1611 x10(-6) respectively, which are 27, 21, and 11 times higher than that in the surrounding country rocks. It can be seen that there are high backgrounds of Ag, Pb, and Zn contents, which are concentrated in altered rocks. As such, geologists can conclude that altered rocks are the main indicators to find ore bodies.

Geochemical survey was concentrated in the southeast part of the district defined by profiles A1 to A4. Based on the 331 sample analyses and contour diagram of element values, three geochemical anomalies were defined. Geochem anomaly No. 1 is 2100m long and 100-400m wide with NW strike. Ag, Pb, and Zn anomalies are strong and have an obvious concentration center. Silver grade is 10 x10(-6) average with maximum value of the surface samples of 27.5 x10(-6). Lead is 588 x10(-6) average, with maximum 1000 x10(-6) . Zinc is 733 x10(-6) average, with maximum 1200 x10(-6). Geochem anomaly No. II is 1100m long and 100-400m wide with NW strike. Ag, Pb, and Zn anomaly are strong and have an obvious concentration center. Silver is 6 x10(-6) average with maximum value 10 x10(-6). Lead is 600 x10(-6) average, with maximum 600 x10(-6). Zinc is 707 x10(-6) average, with maximum 2000 x10(-6). Geochem anomaly No. III is 700m long and 20m wide and NW strike. Silver is 4.5 x10(-6) average with maximum value 6 x10(-6).

"We are very pleased with the results and completion of the 2005 work program at our Aobaotugounao property in China. The exploration plan for 2006 is currently under development. In the south part of the district, trenching work will be done on the three geochemical anomalies to find detailed information about mineralization on the surface. Additional geophysical survey will help to understand the distribution of potential alteration zones. In the north part of the district, particularly around anomaly No. IP1, trenching and drilling works will be arranged to find mineralization on the surface and try to prove the existence of blind ore bodies at depth. More trenching is planned to control the nine known alteration bodies. We will continue to focus on our Chinese assets with the objective of expanding them further," stated Marc Hazout, President and CEO.

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. 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.

Contact Information