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News Release

Silver Dragon Announces Discovery of Significant Silver-Lead-Zinc Sulfide Mineralized zones at its Dadi Polymetallic Project in Northern China

BEIJING, January 26, 2009 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to announce the discovery of significant Silver-Lead-Zinc sulfide mineralized zones through a tunneling project at its Dadi Silver-Lead-Zinc Polymetallic project in Inner Mongolia, northern China. Highlights are as follows:

  • Both tunnels at the Dadi tunneling project have hit underground Silver-Lead-Zinc mineralized zones.
  • Preliminary assay results show that the highest grades of mineralized bodies are: 1,704 g/t Ag, 22.15% Pb and 2.4% Zn in Tunnel PD02 (sample DH661); 744 g/t Ag, 16.16% Pb and 4% Zn in tunnel PD01 (sample DH767).
  • Underground mineralized zones discovered are composed of both primary (sulfide) and oxidized Silver-Lead-Zinc mineralized bodies, in which massive galena veins contain high silver content.
  • By the end of December 2008, the tunneling project revealed two underground mineralized zones that were 52 meters and 31 meters long, respectively, and are not closed. Longer extensions of the mineralized zones are predicted, and will be announced when further exploration results are obtained.

The work done in the 2008 exploration season was based on the surface findings of the previous year, when the East and West mineralization areas, each with significant surface mineralization, were found through a trenching project. A tunnel about 50 meters below the surface was completed in both the East and West mineralization areas. 

At the end of December 2008, Tunnel PD02 in the east mineralization area was 160 meters in total length, comprised of both ore drifts and transverse drifts (see Figure1 and Table 1).  The main transverse drift revealed 6.8 meters of mineralization averaging 441.62g/t Ag, 5.69% Pb, and 1.20% Zn in the 64 meter to 70.8 meter interval. All the samples were collected by the channeling method (10cm ´ 3cm ´ sample length) and analyzed by ordinary chemical methods at the Yanjiao Central Laboratory of the North China Nonferrous Geological Survey Bureau, located in Sanhe City, 35 kilometers east of Beijing.

The highest grade among the samples reached (1.0 meter length) was 1,704 g/ t Ag, 22.15% Pb, and 2.40% Zn.  This mineralized zone trends northwest and dips northeast at dip angles of 72°-75°.  The length of the mineralized zone was 52 meters and not closed, while its width has not yet been defined.  Significant mineralization is in the form of primary (sulfide) massive galena veins with oxidized multi-metal mineralization bodies in between (see Figures 2 and 3). 

Figure 2 Tunnel PD02 in East mineralization Area of Dadi
(A) Starting position of tunnel and surface trench;
(B) mixed type (primary and oxidized) Silver-Lead-Zinc mineralized body with massive galena veins in the tunnel.
A Full Size Image can be downloaded at http://www.silverdragonresources.com/Upload/NR2009JANA02.jpg for your convenience.

Figure 3  Close-up View of Silver-Lead-Zinc mineralization in tunnel PD02
(A) Galena veins with oxidized ore in the middle;
(B) Massive galena vein occurs in oxidized mineralized body;
(C) & (D) oxidized mineralizing body with some primary galena veins (light pale in color).
A Full Size Image can be downloaded at http://www.silverdragonresources.com/Upload/NR2009JANA03.jpg for your convenience.

The aim of tunnel PD01 was to reveal underground extensions of surface mineralized zones in the West mineralization area.  At 61 meters into the tunnel, however, a new south-north striking mineralized zone with 1.0 - 1.5 meter width was discovered (see Figure 4 and Table 2). Assay results show that the highest grade of a sample (0.4 meter sample length) reached 744 g/t Ag, 16.16% Pb, and 4% Zn.  The silver content of some samples reached several hundred grams per tonne, plus high lead and zinc values. 

At present, both mineralization zones discovered by tunnel PD01 and tunnel PD02 are fully mineralized zones, and the silver contents of over three quarters of the samples collected within the mineralization zones are higher than the industrial cutoff grade (40 g/t per meter).  The discovery of the underground primary Ag-Pb-Zn mineralization zones are a significant clue for further exploration aimed at seeking more potential resources at Dadi.

"We are very excited about the good results from the tunneling program at our Dadi project and expect more achievements, to be released as further assay results become available," stated Dr. Tiebing Liu, P. Geo., Silver Dragon’s geological advisor.  "To facilitate the 2009 exploration program, a paved road to Dadi was built to enable the transportation of drilling rigs.  We intend to launch a comprehensive exploration project, including tunneling, drilling, and trenching, so as to further control the mineralized zones, especially their dipping extensions, which have been well indicated by geophysical anomalies."

Dr. Tiebing Liu, P. Geo., a "qualified person" within the meaning of NI 43-101, reviewed and participated in the preparation of the technical information disclosed in this news release.

Table 1 Tunnel PD02 East Mineralization Area of Dadi ( Assay results of underground sample)


Tunnel Number
Sample Number Sampling position (m) Assay result (%) Number of mineralized body average
(Agx10-6;Pbx10-2; Znx10-2)

Sample length (m)

From To  Sample Length Ag (10-6) Pb Zn
 PD1NCM14 DH651 9.4m 0.6 11.2 0.13 0.042  
DH652 26.8 27.8 1 2.5 0.069 0.040
DH653 27.8 28.8 1 7.8 0.21 0.085
DH654 28.8 30 1.2 2.2 0.047 0.040
DH655 59m 0.4 3.5 0.052 0.22
DH656 61.2 62.2 1 71.4 1.10 0.46   II     441.62; 5.69; 1.20
6.80
DH657 62.2 63.2 1 74.8 1.68 0.45
DH658 63.2 64.2 1 20.5 0.34 0.45
DH659 64.2 65.2 1 386 2.63 1.30
DH660 65.2 66.2 1 682 9.90 2.07
DH661 66.2 67.2 1 1704 22.15 2.40
DH662 67.2 68 0.8 80.4 1.15 1.30
        NYM2 DH665 6.7m 1 11.8 0.18 0.40  
DH666 6.7m 1 315 1.65 2.06
DH669 11.4m 0.7 1.2 0.014 0.058
DH670 11.4m 1 126 0.86 1.69
DH671 11.4m 0.3 519 3.19 6.27
DH674 15.5m 1 7 0.054 0.16
DH675 15.5m 0.8 209 1.03 1.22
DH678 28m 0.8 708 4.18 3.76
DH679 28m 0.8 818 4.83 5.5
DH680 28m 0.3 16.5 0.18 0.78
DH683 35.5m 1.1 9.8 0.11 0.38
DH684 35.5m 0.9 158 1.74 2.32
DH685 38.7m 1.4 6.5 0.082 0.17
DH686 38.7m 0.6 641 3.7 4.32
DH689 48.6m 0.3 2.5 0.03 0.12
DH690 48.6m 0.6 42.8 0.52 1.32
DH691 48.6m 1.1 117 0.78 4.87
      SYM2 DH663 5m   1 566 8.39 3.22
DH664 5m 1 276 2.52 2.26
DH667 11m 1 1.2 0.006 0.015
DH668 11m 1 1.2 0.008 0.030
DH672 18.3m 1 1.2 0.013 0.024
DH673 18.3m 1 1.2 0.01 0.012
DH676 27m 1 1.2 0.018 0.028
DH677 27m 1 1.2 0.01 0.016
DH681 34.4m 1 2 0.011 0.028
DH682 34.4m 1 1.2 0.006 0.016
DH687 7.1 8.1 1 5.8 0.044 0.44
DH688 8.1 9 0.9 1.2 0.008 0.075

Notes: PD01NCM4 - Tunnel PD02 northern transverse drift; NYM2 – northern ore drift No. 2;  SYM2 – southern ore drift No. 2. From samples DH656 to DH622, sampling length is 6.8 meters and average grades (per meter) are 441.62g/t Ag, 5.69% Pb and 1.20% Zn.
All assay data were made by ordinary chemical methods at Yanjiao Central Laboratory of North China Nonferrous Geological Survey Bureau.

Table 2 Tunnel PD01 of Dadi
Assay results of underground sample

Tunnel

Sample Number

Sampling position at tunnel (m)

Assay result (%)

From

To

Sample length

Ag (10-6)

Pb

Zn

PD01

DH751

11.5m

0.7

1.2

0.004

0.005

DH752

11.5m

0.7

1.2

0.001

0.005

DH753

20m

1

1.2

0.002

0.012

DH754

20m

0.9

1.2

0.003

0.020

DH755

27m

1

1.2

0.008

0.030

DH756

27m

1

6.2

0.060

0.099

DH757

37m

1

23.5

0.24

0.14

DH758

37m

1

19.2

0.12

0.093

DH759

45.5m

1

3.8

0.027

0.045

DH760

45.5m

1

7.0

0.045

0.11

DH761

61m

1

183

4.09

1.08

DH762

61m

1

411

7.92

0.80

DH763

68m

0.7

76.2

1.38

1.05

DH764

68m

1

668

10.11

17.38

DH765

68m

0.3

43.6

1.30

1.10

DH766

73m

0.8

17.0

0.32

0.34

DH767

73m

0.4

744

16.16

4.00

DH768

73m

0.8

19.2

0.41

0.21

DH769

85m

1

29.0

0.44

0.38

DH770

85m

0.7

3.2

0.034

0.12

DH771

85m

0.3

1.2

0.014

0.11

DH772

92m

0.6

79.2

1.45

1.78

DH773

92m

0.8

224

3.56

2.68

DH774

92m

0.6

15.0

0.18

0.22

Notes: All assay data were made by ordinary chemical methods at Yanjiao Central Laboratory of North China Nonferrous Geological Survey Bureau.


(All assay data as of early December, 2008)
A Full Size Image can be downloaded at http://www.silverdragonresources.com/Upload/NR2009JANA01.jpg for your convenience.

Figure 4   Map of Tunnel PD01 in Dadi
(All assay data as of early December, 2008)
A Full Size Image can be downloaded at http://www.silverdragonresources.com/Upload/NR2009JANA04.jpg for your convenience.

About Dadi Silver-Lead-Zinc Polymetallic Project

Dadi is one of the eight exploration properties of Sanhe Sino-Top Resources and Technologies Ltd. ("Sino-Top"), a Chinese company which holds exclusive exploration rights to these properties located in the prolific Erbahuo Silver District in Inner Mongolia, China. Silver Dragon has a 40% ownership interest in Sino-Top.  The Dadi exploration area, covering 12.48 square kilometers, is located in the Mesozoic volcanic basin in Keshiketeng County, Inner Mongolia, China.

Geologically, the Dadi property is located in the south edge of the Daxinganling metallogenic belt and at the joint between the Daxinganling mountain chain (with north-east direction) and the Xilamulunhe structure belt which trends in an east-west direction.  These two structural belts are also two major ore-forming belts of China.  This entire tectonic setting provides a dynamic geologic environment for the development of mineralizing systems.  The major exposed rocks in the Dadi Property are Upper Jurassic Baiyinggaolao Formation dacitic tufaceous lava, dacitic tuff, rhyolitic tuff, and tufaceous sendstone and conglomerate, among which dacitic tufaceous lava and dacitic tuff are the main host rocks of mineralization. Sino-Top completed 702 meters of tunneling at Dadi in the 2008 exploration season.

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).

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 Liangdi 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 mineralized 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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