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Corporate Head Offices

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 Signs Definitive Agreement to Sell Erbahuo Mine in China

BEIJING, Monday October 5, 2009 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB: SDRG) is pleased to announce that it has entered into a definitive agreement to sell its Erbahuo polymetallic project in China along with its Chinese subsidiary, Chifeng Silver Dragon Resources & Technologies, Ltd., to a private Chinese investor for RMB 6 million or ~US$ 882,000 to the Company. Proceeds from the sale of Erbahuo will be used for further exploration and development of Silver Dragon's other properties in China, including Dadi and Laopandao, of which Silver Dragon has a 40% interest and of its 100% owned Cerros las Minitas silver property in Durango, Mexico.

Under the terms of the agreement, Silver Dragon will receive (i) a payment of RMB1.8 million or ~US$260,000 within three business days; (ii) funds from the return of the mine safety deposit in the amount of RMB 303,695 or ~US$44,661; (iii) funds from the return of the geologic environment governance deposit in the amount of RMB 553,135 or ~US$ 81,348; and (iv) 70% of the cash balance and value of equipment and vehicles in Chifeng Silver Dragon, which result in total proceeds of ~US$1 million net to the Company.

"I am pleased that we have been able to monetize our Erbahuo mine, which is the smallest of our properties, so that we can focus on our prime assets in China and Mexico," commented Marc Hazout, President and CEO of Silver Dragon Resources Inc. "We are currently accelerating our exploration programs at our Dadi and Laopandao properties, which we intend to develop into producing assets.”

About Silver Dragon Resources Inc.

Silver Dragon Resources Inc. (OTC:SDRG) is a mining company focused on the acquisition, exploration, development, and operation of silver mines in proven silver districts in China and Mexico. Silver Dragon's objective is to acquire silver mining assets that contain promising exploration targets and/or producing properties with significant untapped exploration potential. It is management's objective to grow Silver Dragon into a significant silver producer by developing Cerros las Minitas in Mexico and the nine Erbahuo properties in China. With operations in Mexico, the world's leading silver producer, and China, the largest silver consumer, Silver Dragon is prepared to participate in China's increasing demand for silver. For more information, please visit the Company's website at: http://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 Cerros las Minitas Silver Project, outcome and timing for the completion of further assays and metal amounts in partial assay results as well as production expectations 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.