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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 Establishes New Subsidiary to Develop Properties in North China

BEIJING, October 13, 2009 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to announce the formation of Inner Mongolia Guangda Mining Ltd. ("Guangda"), which will be responsible for developing the Company's eight exploration properties in China, commencing with Dadi and Laopandao, into producing mines.

Guangda is a wholly-owned subsidiary of Sanhe Sino-Top Resources & Technologies, Ltd. (“Sino-Top”), in which Silver Dragon has a 40% equity interest. Sino-Top is a Chinese company which holds the exclusive exploration rights to eight properties in Keshiketeng County, Inner Mongolia.

“Guangda” is a Chinese word that literally means “brightening or fully developing,” and shares the Chinese character “Da” with the word “Dadi,” the name of Sino-Top’s flagship property. The incorporation of a local subsidiary is a necessary step in the transition from exploration to production.

"I am very pleased with the formation of Guangda in the local county where our prime assets are located," commented Marc Hazout, President and CEO of Silver Dragon Resources Inc. "This new subsidiary marks a major milestone in the monetization of our potentially world-class Chinese assets."

“We are currently accelerating our aggressive exploration campaigns at the Dadi and Laopandao properties,” commented Mr. Mantang Zhao, Chairman of Sino-Top and Chairman and CEO of Sino-Top’s 52% majority owner, Gansu Shengda Group Ltd. “By accelerating our activities, we expect to complete detailed exploration of the two properties by the end of this year, and lay a solid foundation for mine development heading into 2010.”

About Sino-Top
Sanhe Sino-Top Resources & Technologies, Ltd. (``Sino-Top'') was originally incorporated in 2003 as a Chinese company wholly owned by Huaguan Industrial Corp. (``HIC''), a subsidiary of state-owned entity North China Geological Exploration Bureau. Sino-Top became an American-Chinese joint venture in 2005. Silver Dragon Resources Inc. acquired Sino-Top in 2006 and currently owns 40% of Sino-Top after having sold 50% of its ownership interest to its Chinese partner for RMB30 million (approximately USD$4.5 million) as per the equity transfer agreement with HIC. The Chinese side led by Gansu Shengda Group Ltd. (“Shengda”) and HIC collectively owns 60% (see press release of December 16, 2008). The company holds exclusive exploration rights to eight properties in northern China (Inner Mongolia), covering a total area of 260 km2.

About Silver Dragon Resources Inc.
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 Erbahuo projects in Mexico and China respectively. For more information, please visit the Company's website at: www.silverdragonresources.com (now available in Chinese).

About Shengda
Gansu Shengda Group Ltd. (“Shengda”) has been one of the 500 largest privately-owned Chinese enterprises since 2001. Shengda is a Lanzhou city, Gansu province-based conglomerate, whose main operations are in the mining industry. Shengda currently owns eight producing mines, including a major interest in Bairendaba, and over 20 exploration properties, mostly in northern China. Bairendaba is a supersized Ag-Pb-Zn mine with proven reserves of over 4,000 tonnes of silver and 1.5 million tonnes of lead and zinc, and a milling capacity of over 1 million tonnes’ ore per year. Shengda is the operator and the largest shareholder of Bairendaba, with a 42% ownership interest. Bairendaba is adjacent to the Erbahuo Silver District, where all of Sino-Top’s nine properties are located (see project location map on Silver Dragon’s homepage).

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical, such as statements regarding exploration and development, 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

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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.