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Silver Dragon Resources Inc.
200 Davenport Road
Toronto, Ontario M5R 1J2
Canada

Phone: 416-223-8500
Toll Free(North America): 1-866-512-SDRG (7374)
Fax: 416-223-8507
info@silverdragonresources.com

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News Release

Silver Dragon To Commence Production At The Erbahuo Silver Mine, China

BEIJING, December 2, 2010 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to announce that the Erbahuo silver mine, located in Wengniute county, Inner Mongolia, China, will commence production in the second quarter of 2011. 

The mine will be an open pit, heap leach process, and is scheduled to produce dore silver bars by the third quarter of 2011, which  will be sold to smelters for further refining.  The mine will be developed and operated by Huaguan Industrial Corp (“HIC”) and Guangxi Hongteng Mining, Ltd. (“GHM”) as part of a five-year arrangement.  HIC and GHM anticipate processing 100,000 tonnes of ore, yielding up to eight (8) tonnes of silver in the first year.  Silver Dragon Resources will receive 30% of the net proceeds, before taxes.

Chifeng Silver Dragon Resources & Technologies, Ltd. (“Chifeng Silver”) which owns the Erbahuo mine is a Sino-American joint venture between Silver Dragon Resources Inc. and HIC, a Chinese state-owned entity

“We are pleased to become a producer in 2011, and grateful to have a state-owned partner to assist us in achieving this goal,” commented Marc Hazout, President and CEO.  “With the strong capabilities of our partners, and silver prices at historical highs, we are confident the Erbahuo mine will be a successful operation.”

“We look forward to generating revenue from the production at Erbahuo, and expect to invest in additional exploration at the mine in order to further expand the project’s value,” stated Guoqiang Hao, director of Silver Dragon and HIC.  “This milestone will establish and recognize Silver Dragon as a Silver producer in China.”

About the Erbahuo Silver Mine

The Erbahuo silver mine covers an area of 1.2 square kilometers.  It is located 120 kilometers northwest of the city of Chifeng, which is 450 kilometers northeast of Beijing, China, and comprises the Erbahuo mining district, part of the prolific silver belt on the structural join where the north edge of the North China platform meets with the south edge of the Hercynian fold belt of the Great Xingan Mountains.  The deposit is a shear zone-hosted and stratabound volcanogenic hydrothermal system of parallel trending and dipping mineralization, containing pyrolusite, psilomelane, limonite, pyrite, galena, sphalerite, chalcopyrite, and other silver related mineralization. Silver is concentrated within manganese oxides.  Erbahuo used to be considered a silver manganese mine within a fracture zone. In recent years, however, the features of strata bound silver deposits have been discovered, suggesting the potential for significant further resources in sulfides containing silver, copper, molybdenum, and other metals.

A National Instrument (NI) 43-101 technical report on this property was completed in July 2007 and updated in 2010 by Micromine Consulting, a resource sector consulting company headquartered in Perth, Australia.

A feasibility study for the Erbahuo polymetallic project was completed in early 2009 by Beijing Tenstar Technology Ltd. of Beijing, China (see press release of April 7, 2009).

About Chifeng Silver Dragon Resources & Technologies, Ltd.
Chifeng Silver Dragon Resources & Technologies, Ltd. (“Chifeng Silver”), is a Sino-American joint venture between Silver Dragon Resources Inc. and  Huaguan Industrial Corp. (“HIC”), a Chinese state-owned entity.  Chifeng Silver holds the mining rights and license issued by the Department of Land & Resources, Inner Mongolia for the Erbahuo silver mine.  The license includes mineable ore types of silver, gold, and lead.   The business license, issued to Chifeng Silver by the local industrial and commercial administration, expands Chifeng Silver’s business scope to include silver mining and sales of mineral products (see press release of August 2, 2010).

About Silver Dragon Resources Inc.

Silver Dragon Resources Inc. is a mining and metals 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 Cerros las Minitas project in Mexico, its six Sino-Top properties in China (particularly Dadi and Laopandao), and its Erbahuo Silver mine (via its Chifeng Silver Dragon subsidiary), also in 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: general economic conditions and financial markets, changes in market prices of silver and other metals, technological and operational risks (including but not limited to construction delays, logistics issues, and equipment performance or failure), and other risks set out in the Company's most recent Form 10-K available at www.sec.gov/edgar.shtml.

Contact 

Silver Dragon Resources Inc.
Marc Hazout, President or Alessandro Motta, Investor Relations
(416) 223-8500 or Toll Free: 1-866-512- SDRG (7374)
Email: info@silverdragonresources.com

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Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission (SEC) limits disclosure for U.S. reporting purposes to mineral deposits that a company can economically or legally extract or produce. We may use certain terms on this website such as "reserves," "resources," "geologic resources," "proven," "probable," "measured," "indicated" or "inferred," which may not be consistent with the reserve definitions established by the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K. You can review and obtain copies of the latest Form 10-K filing from the SEC's website at http://www.sec.gov/edgar.shtml.