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Silver Dragon Completes Erbahuo Mining License Transfer to Chifeng Silver Dragon, China

BEIJING, August 2, 2010 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to announce receipt of a new mining license for its 70%-owned Erbahuo silver mine, issued by the Department of Land & Resources, Inner Mongolia.  The license has been transferred from the previous holder, Huaguan Industrial Corp. (“HIC”), a Chinese state-owned entity and Silver Dragon’s joint venture partner, to Chifeng Silver Dragon Resources & Technologies, Ltd. (“Chifeng Silver”), a Sino-American joint venture. The mining license transfer process, which consummated in a change of the property title, constituted part of the permitting process for mine development and mill construction.

The Erbahuo mine is 70% owned by Silver Dragon and 30% by Chinese shareholders led by Huaguan Industrial Corp. (“HIC”), Silver Dragon’s state-owned Chinese joint venture partner. 

According to the mining license, mineable ore types include silver, gold, and lead. A new business license has also been issued to Chifeng Silver by the local industrial and commercial administration, expanding Chifeng Silver’s business scope to include silver mining and sales of mineral products.

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.

An NI 43-101 technical report on this property was completed in July 2007 and updated in 2010 by Micromine Consulting (“Micromine”), 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 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, such as statements regarding the exploration and development of the Erbahuo Silver Project, outcome and timing for the completion of further assays and metal amounts in partial assay results, are forward-looking statements.  Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur. Information inferred from the interpretation of assay results and information concerning mineralization zones may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.  Forward-looking statements 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 future assay results, delays in testing and evaluation of assays, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.  

Contact Silver Dragon Resources Inc.

Marc Hazout
President
(416) 223-8500 or Toll Free: 1-866-512- SDRG (7374)
Email: info@silverdragonresources.com

Alessandro Motta
Investor Relations
(416) 223-8500 or Toll Free: 1-866-512- SDRG (7374)
Email: info@silverdragonresources.com