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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 Toll-Mill Agreement to Process Up To 1,000 Tonnes of Ore Monthly from Cerros las Minitas

TORONTO, Canada, June 16, 2009 (PRIME NEWSWIRE) Silver Dragon Resources Inc. (OTC BB: SDRG) is pleased to report that it has signed toll-milling agreements to process up to 12,000 tonnes of ore over the next 12 months from its wholly owned Cerros las Minitas property in Durango, Mexico. The toll-milling agreements represent the next step in the overall process of transitioning Cerros las Minitas into production.

Based on agreements signed on June 3, 2009, BESMER, S.A. DE C.V. has been appointed agent to perform the following responsibilities:

  • Hauling 500 – 1,000 tonnes of ore monthly, commencing in June 2009
  • Metallurgical ore testing for silver and lead quantities
  • Flotation processing and packaging of ore into concentrates
  • Loading and delivery of concentrates to market for sale
  • Sale of processed concentrates on the market
  • Optional processing of byproducts (Copper, Zinc, Gold) for additional credits
The initial term of the contract is for twelve (12) months, with an option to extend upon agreement by both parties. Both parties will share in the revenues of bringing the ore to market, with SILVER DRAGON MINING DE MEXICO, S.A. DE C.V. receiving 55% of the profits.

In other news, the Company has completed a revised resource report on the Cerro las Minitas property, but has not released it pending negotiations for an additional mining concession on which the Company is seeking exploitative rights.

“We are very excited about the toll-milling deal with BESMER, as it enables the Company to graduate to the ranks of producing miners,” commented Marc Hazout, President and CEO of Silver Dragon Resources Inc. “Moreover, this agreement has been executed in parallel to our simultaneous plan of bringing our own mill into production in the 4th quarter of this year, which should ultimately yield significantly improved profit margins (see press release dated February 10, 2009).”

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 producer of silver, and in China, the world's largest consumer of silver, 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).

About Cerro las Minitas

Cerro las Minitas is comprised of 15 concessions covering 1,413 Hectares. It is located 68 kilometers northeast of the city of Durango, Mexico, and comprises the Cerro las Minitas mining district, part of the prolific silver belt of the Sierra Madre Occidental. Silver Dragon Resources Inc., through its wholly owned Mexican Subsidiary Silver Dragon Mining de Mexico S.A. De C.V., acquired the exploration and mining rights to the property in March 2006. Pictures of the mill can be seen on the Company’s website at http://www.silverdragonresources.com.

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 Cerro 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.