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News Release

Silver Dragon Reports on Exploration Progress at its Aobaotugounao Silver-Lead-Zinc Polymetallic Property in Northern China

Beijing, October 18, 2011 (PRIME NEWSWIRE) – Silver Dragon Resources Inc. (OTCBB: SDRG) (the “Company”) is pleased to announce recent results from the ongoing 2011 drilling program at its Aobaotugounao Silver-Lead-Zinc polymetallic property in Inner Mongolia, Northern China. Aobaotugounao is a silver-lead-zinc polymetallic project owned by Sanhe Sino-Top Resources & Technologies, Ltd. (“Sino-Top), of which Silver Dragon Resources Inc. has a 40% equity interest.

Highlights of the latest discoveries at Aobaotugounao include the following:

  • Aobaotugounao is the third property with industrial silver, lead and zinc mineralization findings after the Dadi and Laopandao properties of Silver Dragon.
  • Soil geochemical survey has revealed at least two NW trending anomaly zones at the Aobaotugounao Property;
  • Surface testing samples also indicate silver, lead, and zinc enrichments along alteration zones in the hosting Jurassic volcanic strata.
  • Two drill holes reveal silver, lead, and zinc mineralization intervals at exploration lines 15 and 11, and the highest grades of silver, lead and zinc reach 48.5 g/t, 3.2% and 3.72% respectively;
  • Further drilling is currently being conducted to identify more resource potential.

Aobaotugounao Property is one of six exploration properties of Silver Dragon in Inner Mongolia, China.  This property is 21.07km3 and is located at 117°34′00″~117°37′30″N and 43°47′00″~43°50′00″E. It is approximately 9 kilometers to the Northwest of Tongxing Town of Keshiketeng County.

The main exposed rocks in the property are Upper Jurassic Manketouebo Formation (J3m) volcanic lava and pyroclastic rock series, and the typical rocks are rhyolitic crystal tuff, tuffaceous lava and rhyolite.

As of 2008, major exploration activities, including geological mapping, surface trenching and soil geochemical surveying were concentrated in the northeast part of the property (Fig. 1).  A total of 16 alteration zones with limonitization and silicification are found.  Along the alteration zones, assay results of the pickup sampling show no significant mineralization of silver, lead and zinc. However, part of assay results of the alteration zones shows near industrial cut-off grades of silver, lead, and zinc, which indicate a potential to find mineralized bodies with industrial value within the alteration zones. The soil geochemical survey results show that, in northeast and southwest parts of the working area, at least two NW trended anomaly zones can be identified (Fig. 1).  The geochemical anomalies consist of silver, lead, zinc, copper and tin associations; as well as other associations, indicating hydrothermal mineralization in the area.  The occurrences of the geochemical anomaly zones coincide with those of the alteration zones.

In 2011, more surface samples along the alteration zones were collected and analyzed.  The results show several samples contain near cut-off grades of silver, lead and zinc (Table 1).  Sample AH017, collected within surface trench TC2, has silver content (Ag 89.4 g/t; Pb 0.078% and Zn 0.14%), which indicates the existence of silver mineralized bodies with economic values. 

Two drill holes, at exploration lines 15 and 11, have been operated and completed to test NW trending alteration zone and geochemical anomalies (Fig. 1 and Table 2).  The assay results of drill cores show that both drill holes hit industrial Ag-Pb-Zn mineralization intervals.

Drill hole ZK1501 hits three mineralization intervals (Table 3): (1) from 22.65m to 23.75m interval, the highest grades are Ag 7.0 g/t, Pb 1.2% and Zn 0.15%; (2) from 38.9m to 41.4m interval, the highest grades are Ag 48.5 g/t, Pb 3.20% and Zn 2.49% (0.8m wide interval); (3) from 60.00m to 61.90m interval, the highest grades are Ag 8.8 g/t , Pb 0.58% and Zn 0.76%.

Drill hole ZK1101 reveals three Pb-Zn mineralization intervals (Table 4): (1) from 167.10m to 169.10m interval, the highest grade are Ag 7.5 g/t, Pb 0.38% and Zn 0.53%; (2) from 178.80m to 179.80m interval, the highest grade areAg 14.9 g/t, Pb 0.38% and Zn 3.72%; (3) from 202.15m to 204.25m interval, the highest grades are Ag 3.8 g/t, Pb 0.57 %, and Zn 0.72%.

These results are very important achievements obtained at the Aobaotugounao property. Because the geological setting and mineralization pattern in the property are the same as Dadi Ag-Pb-Zn Property, which is located to the south, it can be predicted that resource potential may be found at the Aobaotugounao Property.

The ongoing drilling project continues to be implemented at Aobaotugounao and the new exploration results will be reported as the data becomes available.

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 Assay results of surface sampling in Aobaotugounao Property

No. field no. assay no. sampling method sample weight(kg) sampling position assay results
Ag g/t Pb% Zn% Sn% Cu%
1 AH001 2011-Z-357 pick up 2.20 alteration zone 6.0 0.64 0.35 0.057 0.028
2 AH002 2011-Z-358 pick up 2.50 alteration zone 14.1 0.32 0.24 0.045 0.006
3 AH003 2011-Z-359 pick up 2.60 alteration zone 1.2 0.007 0.002 0.008 0.002
4 AH004 2011-Z-360 pick up 2.10 alteration zone 8.0 0.24 0.10 0.014 0.002
5 AH005 2011-Z-361 pick up 2.30 alteration zone 14.8 0.14 0.14 0.011 0.005
6 AH006 2011-Z-362 pick up 2.20 alteration zone 1.5 0.002 0.006 0.011 0.002
7 AH007 2011-Z-363 pick up 2.60 alteration zone 1.2 0.002 0.001 0.015 0.002
8 AH008 2011-Z-364 pick up 3.00 alteration zone 11.8 0.16 0.005 0.011 0.002
9 AH009 2011-Z-365 pick up 2.80 alteration zone 6.0 0.088 0.025 0.009 0.007
10 AH010 2011-Z-366 pick up 2.80 alteration zone 1.2 0.020 0.063 0.015 0.004
11 AH011 2011-Z-367 pick up 2.40 alteration zone 8.8 0.19 0.17 0.012 0.024
12 AH012 2011-Z-368 pick up 3.30 alteration zone 2.0 0.016 0.002 0.009 0.003
13 AH013 2011-Z-369 pick up 2.60 alteration zone 1.2 0.004 0.12 0.016 0.002
14 AH014 2011-Z-370 pick up 2.50 alteration zone 1.2 0.12 0.12 0.013 0.010
15 AH015 2011-Z-371 pick up 2.40 alteration zone 3.0 0.031 0.26 0.014 0.007
16 AH016 2011-Z-372 pick up 2.40 alteration zone 4.2 0.060 0.30 0.015 0.005
17 AH017 2011-Z-373 pick up 2.60 alteration zone 89.4 0.078 0.14 0.60 0.72
18 AH018 2011-Z-374 pick up 2.60 alteration zone 2.8 0.096 0.34 0.076 0.015
19 AH019 2011-Z-375 pick up 2.30 alteration zone 1.2 0.003 0.031 0.012 0.004
20 AH020 2011-Z-376 pick up 2.70 alteration zone 2.0 0.001 0.079 0.016 0.002
21 AH021 2011-Z-377 pick up 2.90 alteration zone 4.2 0.020 0.024 0.007 0.002
22 AH022 2011-Z-378 pick up 3.10 alteration zone 1.5 0.003 0.013 0.010 0.002
23 AH023 2011-Z-379 pick up 2.40 alteration zone 21.5 0.46 0.054 0.014 0.064
24 AH024 2011-Z-380 pick up 2.90 alteration zone 1.8 0.028 0.062 0.010 0.007
25 AH025 2011-Z-1662 pick up 5.5 alteration zone 1.2 0.014 0.029    
26 AH026 2011-Z-1663 pick up 6.0 alteration zone 1.2 0.027 0.028    
27 AH027 2011-Z-2063 pick up 2.2 alteration zone 2.0 0.037 0.056    
28 AH028 2011-Z-2064 pick up 2.1 alteration zone 1.2 0.045 0.092    

Cutoff grades:Ag=40g/t; Pb=0.3%; Zn=0.5%; Sn=0.1% ; Cu=0.2%.
Industrial grades:Ag=80g/t; Pb=0.7%; Zn=1%; Sn=0.2%; Cu=0.4%.

Table 2 Drill hole information

Drill hole Coordinates of drill hole position Azimuth (°) Dip angle (°) Drilling depth (m)
X Y Z
ZK1501 4855301 39549362 1577 205 80 270
ZK1101 4855297 39549456 1592 205 85 230.2
ZK1102 4855372 39549500 1619 205 80 Operating now

 

Table 3 Assay results of drill hole ZK1501 at exploration line 15 in Aobaotugounao Property

 

No. field no. assay no. sampling position sampling interval sample length (m) sample weight (kg) assay results
exploration line drill hole from (m) to (m) Ag g/t Pb% Zn%
1 AH101 2011-Z-2038 15 ZK1501 22.65 23.75 1.10 2.2 7.0 1.20 0.15
2 AH102 2011-Z-2039 15 ZK1501 23.75 24.95 1.20 2.0 1.2 0.22 0.12
3 AH103 2011-Z-2040 15 ZK1501 37.90 38.90 1.00 1.7 2.9 0.16 0.13
4 AH104 2011-Z-2041 15 ZK1501 38.90 39.70 0.80 2.3 48.5 3.20 2.49
5 AH105 2011-Z-2042 15 ZK1501 39.70 40.50 0.80 2.1 37.8 1.92 2.21
6 AH106 2011-Z-2043 15 ZK1501 40.50 41.40 0.90 1.9 9.8 0.52 0.51
7 AH107 2011-Z-2044 15 ZK1501 41.40 42.20 0.80 1.8 2.5 0.20 0.32
8 AH108 2011-Z-2045 15 ZK1501 42.20 43.40 1.20 1.9 5.0 0.28 0.40
9 AH109 2011-Z-2046 15 ZK1501 43.40 44.40 1.00 2.1 1.2 0.21 0.27
10 AH110 2011-Z-2047 15 ZK1501 44.40 45.60 1.20 2.4 4.5 0.24 0.31
11 AH111 2011-Z-2048 15 ZK1501 46.90 47.90 1.00 2.2 2.8 0.020 0.035
12 AH112 2011-Z-2049 15 ZK1501 47.90 48.90 1.00 2.2 1.2 0.015 0.048
13 AH113 2011-Z-2050 15 ZK1501 48.90 49.90 1.00 2.0 1.5 0.019 0.036
14 AH114 2011-Z-2051 15 ZK1501 57.40 58.40 1.00 2.3 3.5 0.15 0.20
15 AH115 2011-Z-2052 15 ZK1501 58.40 59.20 0.80 2.2 7.0 0.27 0.72
16 AH116 2011-Z-2053 15 ZK1501 59.20 60.00 0.80 2.1 6.0 0.18 0.26
17 AH117 2011-Z-2054 15 ZK1501 60.00 60.70 0.70 2.0 8.8 0.58 0.76
18 AH118 2011-Z-2055 15 ZK1501 60.70 61.90 1.20 2.7 6.8 0.39 0.66
19 AH119 2011-Z-2056 15 ZK1501 61.90 62.40 0.50 1.8 3.2 0.15 0.22
20 AH120 2011-Z-2057 15 ZK1501 62.40 62.90 0.50 1.6 6.8 0.24 0.50
21 AH121 2011-Z-2058 15 ZK1501 62.90 63.40 0.50 1.9 6.2 0.23 0.33
22 AH122 2011-Z-2059 15 ZK1501 63.40 63.90 0.50 1.4 2.8 0.082 0.13
23 AH123 2011-Z-2060 15 ZK1501 63.90 64.90 1.00 2.0 3.0 0.18 0.27
24 AH124 2011-Z-2061 15 ZK1501 133.70 134.50 0.80 2.1 14.2 0.25 0.32
25 AH125 2011-Z-2062 15 ZK1501 238.00 238.60 0.60 1.9 1.2 0.068 0.024

Notes: The core sampling method is sawing the core in half for assaying, with the other half being put in a storage box with a red marker. The length of each sample varies from 0.5m to 1m depending on mineralization and petrology.
All assay data were made by ordinary chemical method in Yanjiao Central Laboratory of North China Nonferrous Geological Survey Bureau

Table 4 Assay results of drill hole ZK1101 at exploration line 11 in Aobaotugounao Property

No. field no. assay no. sampling position sampling interval sample length (m) sample weight (kg) assay results
exploration line drill hole from (m) to (m) Ag g/t Pb% Zn% Cu%
1 AH130 2011-Z-2716 11 ZK1101 166.10 167.10 1.00 2.2 4.0 0.043 0.057 0.006
2 AH131 2011-Z-2717 11 ZK1101 167.10 168.10 1.00 2.0 4.5 0.36 0.44 0.004
3 AH132 2011-Z-2718 11 ZK1101 168.10 169.10 1.00 2.1 7.5 0.38 0.53 0.004
4 AH133 2011-Z-2719 11 ZK1101 169.10 170.30 1.20 2.3 4.0 0.042 0.10 0.004
5 AH134 2011-Z-2720 11 ZK1101 170.30 171.40 1.10 2.1 2.0 0.12 0.13 0.004
6 AH135 2011-Z-2721 11 ZK1101 171.40 172.50 1.10 1.9 2.0 0.026 0.065 0.005
7 AH136 2011-Z-2722 11 ZK1101 176.80 177.80 1.00 2.2 4.0 0.026 0.028 0.078
8 AH137 2011-Z-2723 11 ZK1101 177.80 178.80 1.00 2.5 4.2 0.052 0.44 0.018
9 AH138 2011-Z-2724 11 ZK1101 178.80 179.80 1.00 2.1 14.9 0.38 3.72 0.005
10 AH139 2011-Z-2725 11 ZK1101 179.80 180.90 1.10 2.4 5.0 0.20 0.49 0.004
11 AH140 2011-Z-2726 11 ZK1101 180.90 181.90 1.00 1.9 4.0 0.089 0.20 0.018
12 AH141 2011-Z-2727 11 ZK1101 202.15 203.15 1.00 2.2 3.2 0.36 0.65 0.004
13 AH142 2011-Z-2728 11 ZK1101 203.15 204.25 1.10 2.0 3.8 0.57 0.72 0.003
14 AH143 2011-Z-2729 11 ZK1101 204.25 205.15 0.90 2.3 3.8 0.22 0.72 0.006
15 AH126 2011-Z-2730 15 ZK1501 21.65 22.65 1.00 2.2 1.8 0.084 0.13 0.004

Note: The core sampling method is sawing the core in half for assaying, with the other half being put in a storage box with a red marker. The length of each sample varies from 0.5m to 1m depending on mineralization and petrology.
All assay data were made by ordinary chemical method in Yanjiao Central Laboratory of North China Nonferrous Geological Survey Bureau

About Aobaotugounao

The Aobaotugounao property covers a total of 21.07 km2. It is approximately 9km northwest of Tongxing Township, Keshiketeng County, Inner Mongolia. Geologically, it is characterized by a hydrothermal vein Ag-polymetallic deposit within Jurassic volcanic series. Recent geological work on the property has identified 16 alteration zones, three of which are Ag-Pb mineralization zones. Major alterations are limonitization, siliconization, chloritization and fluoritization. A geophysical survey has suggested the possible existence of silver, lead, zinc and copper mineralization zones below 150 meters from surface. The 1,000 meter drilling planned for Aobaotugounao will help further define the existing mineral zones as well as identify additional mineral zones within the exploration area. To date, about 916 meters of drilling (3 holes) have been completed, and two more drill holes are have been designed and will be operated later this year.

About Sino-Top – China Mining 2009 Award Winner

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 the state-owned 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 partners. The Chinese side partners, led by Gansu Shengda Group Ltd. (“Shengda”), at 52%, and HIC, at 8%, collectively together own 60% of Sino-Top. Sino-Top holds exclusive exploration and development rights to six properties in northern China (Inner Mongolia), covering a total area of 139 km2. Sino-Top won the prestigious Prospector/Explorer of the Year Award for its Dadi Silver Polymetallic Project, at the China Mining Congress & Expo 2009 held in Tianjin, China, during October 20-22, 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 the Company into a significant silver producer by developing the six Sino-Top properties in China in which the Company has 40% interest (particularly the Dadi, Laopandao and Aobaotugounao properties), and the Company’s Erbahuo Silver mine (through the Company’s Chifeng Silver Dragon subsidiary), also located in China (see project location map at: http://silverdragonresources.com/_img/China_Project_Location_Map.jpg).

For more information, please visit the Company’s website at: www.silverdragonresources.com (now available in Chinese).

Cautionary Note on Mineral Reserve and Resource Estimates:

Silver Dragon Resources Inc. is a U.S. company that files reports with the United States Securities and Exchange Commission (the “SEC”). Information regarding mineralization and reserves included in the Company’s reports with the SEC are generally required to comply with the SEC’s Industry Guide 7. This press release and the study do not comply with Guide 7, because they were prepared in accordance with Canadian Institute of Mining, Metallurgy and Petroleum Standards, which have been adopted by NI 43-101 or Chinese Non-ferrous Resource Estimation Standards --. Accordingly, we caution you that the information contained in this press release and may not be comparable to information included in the Company’s SEC reports, and similar information made public by other U.S. companies under the United States federal securities laws and the rules and regulations thereunder. In particular, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” as used in this press release and the study are defined in and required to be disclosed by NI 43-101; however, these terms are not defined in Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into mineral reserves with demonstrated economic viability. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures.

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 Aobaotugounao Project, estimates of project performance, costs and other future metrics, and the Company’s plans and intentions, 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. Estimates of mineralization 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, financing risks, volatility of metal and other prices and costs, uncertainty of mineralization estimates, lack of operational control of projects, political risks, regulatory risks, operational hazards, 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 SEC.

Contact Silver Dragon Resources Inc.
Marc Hazout, President or 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.