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News Release

Silver Dragon discovers 1.5 meters of 732 g/t Silver, 3.28% Lead and 9.56% Zinc at Dadi, Reports Progress at Aobaotugounao

BEIJING, July 5, 2012 (PRIME NEWSWIRE) – Silver Dragon Resources Inc. (OTCBB: SDRG) (“the Company”) is pleased to announce recent results from the ongoing 2012 drilling program at its Dadi and Aobaotugounao Silver-Lead-Zinc polymetallic propertiesin Inner Mongolia, Northern China. Dadiand Aobaotugounao are owned by Sanhe Sino-Top Resources & Technologies, Ltd. (“Sino-Top”), of which Silver Dragon Resources Inc. has a 40% equity interest.

 Highlights are as follows:

  • According to assay results released on June 25, four underground drill holes (ZK0808, ZK0308, ZK0702, and ZK0901) have been completed, revealing significant Silver-Lead-Zinc mineralization at Dadi.
  • Four underground drill holes located at 1,384 meters in the PD1 tunnel at exploration lines no.3, no. 7 and no. 9 at Dadi further define mineralization zones I and II at deeper levels.
  • 1:2,000 geological mapping, geological section surveying and surface drilling are in progress at Aobaotugounao.

Two mineralized intervals have been discovered at the underground drill hole ZK0808: azimuth 220°, dip angle 86°,drilling length 120m. One is from 61.5m to 63m interval and the grades are Ag 35.5 g/t, Pb 1.15%, Zn 0.52%. The second interval is from 97.5m to 100.5m interval and the grades of two samples are Ag 78.8 g/t, Pb 0.11%, Zn 0.13%, and Ag 732 g/t, Pb 3.28%, Zn 9.56%, respectively (Table 1).

Based on the assay results (Table 2) for underground dill hole ZK0308: azimuth 220°, dip angle 86°,drilling length 120.85m, one sample (from 84m to 85.5m interval) reveals a mineralized body with grades of Ag 34.4 g/t, Pb 1.44% and Zn 1.89%.

Four intervals hit silver, lead and zinc mineralization at underground drill hole ZK0702: azimuth 220°, dip angle 85°,drilling length 71.5m; the first interval is from 58.5m to 60.0m with grades of Ag 2.3 g/t, Pb 0.019% and Zn 1.14%; the second interval is from 63m to 66m with grades of two samples being Ag 72.5 g/t, Pb 0.96% and Zn 4.3%, and Ag 10.4 g/t, Pb 0.04 % and Zn 1.19%, respectively; the third interval is from 67.5m to 69m with grades of Ag 11.5 g/t, Pb 0.07% and Zn 1.07%. Additionally, in intervals from 45.65m to 70.0m, the rocks are strongly altered and assay results show most of the samples reaching industrial grades or near cutoff grades of lead and zinc. These results demonstrate a significant concentration of lead and zinc mineralization (Table 3).

Three samples taken from intervals from 56.4m to 60.6m, at underground drill hole ZK0901: azimuth 220°, dip angle 87°,drilling length 72m show relatively strong zinc mineralization and weak silver and lead mineralization.  From the 56.4m to 57.9m interval, the grades are Ag 5.5 g/t, Pb 0.062%, and Zn 0.71%; from the 57.9m to 59.4m interval, grades are Ag 11.0 g/t, Pb 0.082%, and Zn 2.04%; from the 59.4m to 60.6m interval, grades are Ag 11.2 g/t, Pb 0.05%, and Zn 1.34% (Table 4).

The underground drilling results mentioned above provide significant information, which can be used for identifying extensions of main mineralization zones and for guidance over deeper-level tunneling work.

 

Table 1 - Assay results of underground drilling ZK0808

 

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH5336 2012-Z-668 60.00 61.50 1.50 1.0 Altered rock 3.0 0.028 0.044
DH5337 2012-Z-669 61.50 63.00 1.50 0.9 Mineralized body 35.5 1.15 0.52
DH5338 2012-Z-670 88.50 90.00 1.50 1.4 Altered rock 5.0 0.052 0.032
DH5339 2012-Z-671 90.00 91.50 1.50 1.1 Altered rock 4.8 0.043 0.032
DH5340 2012-Z-672 91.50 93.00 1.50 2.0 Altered rock 8.4 0.054 0.067
DH5341 2012-Z-673 93.00 94.50 1.50 1.3 Altered rock 4.2 0.025 0.031
DH5342 2012-Z-674 94.50 96.00 1.50 1.8 Altered rock 19.0 0.14 0.20
DH5343 2012-Z-675 96.00 97.50 1.50 2.3 Altered rock 5.6 0.054 0.042
DH5344 2012-Z-676 97.50 99.00 1.50 2.4 Mineralized body 78.8 0.11 0.13
DH5345 2012-Z-677 99.00 100.50 1.50 1.7 Mineralized body 732 3.28 9.56
DH5346 2012-Z-678 100.50 101.60 1.10 0.6 Altered rock 10.0 0.080 0.11
DH5347 2012-Z-679 109.77 110.89 1.12 1.3 Altered rock 3.4 0.065 0.074

 

Table 2 - Assay results of underground drilling ZK0308

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH5306 2012-Z-666 22.50 24.00 1.50 1.6 Altered rock 3.2 0.021 0.029
DH5307 2012-Z-667 84.00 85.50 1.50 0.9 Mineralized body 34.4 1.44 1.89

 

Table 3 - Assay results of underground drilling ZK0702

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH5355 2012-Z-685 45.65 47.62 1.97 1.2 Altered rock 7.8 0.29 0.22
DH5356 2012-Z-686 51.40 52.50 1.10 1.0 Altered rock 5.5 0.12 0.25
DH5357 2012-Z-687 52.50 54.00 1.50 1.0 Altered rock 4.3 0.18 0.27
DH5358 2012-Z-688 54.00 55.50 1.50 0.9 Altered rock 5.5 0.14 0.28
DH5359 2012-Z-689 55.50 57.00 1.50 1.0 Altered rock 5.0 0.11 0.20
DH5360 2012-Z-690 57.00 58.50 1.50 0.7 Altered rock 2.2 0.027 0.46
DH5361 2012-Z-691 58.50 60.00 1.50 1.1 Mineralized body 2.3 0.019 1.14
DH5362 2012-Z-692 60.00 61.50 1.50 1.3 Altered rock 4.8 0.17 0.34
DH5363 2012-Z-693 61.50 63.00 1.50 0.9 Altered rock 15.2 0.24 0.34
DH5364 2012-Z-694 63.00 64.50 1.50 1.1 Mineralized body 72.5 0.96 4.30
DH5365 2012-Z-695 64.50 66.00 1.50 0.8 Mineralized body 10.4 0.040 1.19
DH5366 2012-Z-696 66.00 67.50 1.50 1.6 Altered rock 4.0 0.023 0.47
DH5367 2012-Z-697 67.50 69.00 1.50 1.7 Mineralized body 11.5 0.070 1.07
DH5368 2012-Z-698 69.00 70.00 1.00 0.7 Altered rock 1.3 0.020 0.079

 

Table 4 - Assay results of underground drilling ZK0901

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH5350 2012-Z-680 56.40 57.90 1.50 1.2 Mineralized body 5.5 0.062 0.71
DH5351 2012-Z-681 57.90 59.40 1.50 1.3 Mineralized body 11.0 0.082 2.04
DH5352 2012-Z-682 59.40 60.60 1.20 0.9 Mineralized body 11.2 0.050 1.34
DH5353 2012-Z-683 60.60 61.83 1.23 0.6 Altered rock 2.0 0.032 0.19
DH5354 2012-Z-684 54.90 56.40 1.50 1.0 Altered rock 9.6 0.066 0.41

Notes: Based on Chinese Exploration Standards, the cutoff grades are Ag 40 g/t, Pb 0.3% and Zn 0.5%, and the lowest industrial grades are Ag 80 g/t, Pb 0.7%, and Zn 1%.
Collected samples are analyzed at the Yanjiao Central Laboratory of North China Nonferrous Geological Survey Bureau.

The following table (Table 5) shows exploration work at Dadi and Aobaotugounao Properties completed to date.  At Aobaotugounao, four surface drill holes are in progress and will be reported as soon as assay results become available.

Table 5 - Completed exploration work in June at Dadi and Aobaotugounao Properties

Exploration item Dadi Property Aobaotugounao Property Total exploration work
June Total in this year June Total in this year June Total in this year
1:2000 topographic survey @ @ 1.4 km2 2 km2 1.4 2 km2
1:2000 geological mapping @ @ 0.2 km2 2 km2 0.2 2 km2
1:1000 geological section measurement @ @ 1.8 km 6.4 km 1.8 6.4 km
Surface drilling @ @ 903 m 903 m 903 903 m
Underground drilling 236 m 1,496 m @ @ 234 1496 m
Tunneling 283 m 1,226 m @ @ 283 1226 m
Tunnel entrance construction 18 m 18 m @ @ 18 18 m
Surface trenching @ @ 137 m3 137 m3 137 m3 137 m3
Sample analysis 38 samples 249 samples @ 6 samples 38 samples 255 samples
Exploration line survey @ @ 9,400 m 9,400 m 9,400 m 9,400 m
Exploration working point survey @ @ 32 32 32 32

Additional assaying revealed some further relatively weak mineralization:

Table 6 - Assay results of underground drilling ZK0501

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH5310 2012-Z-522 24.00 25.50 1.50 1.1 altered rocks 1.5 0.009 0.092
DH5311 2012-Z-523 25.50 27.00 1.50 1.3 Ag-Pb-Zn mineralized body 4.8 0.14 1.45
DH5312 2012-Z-524 27.00 28.50 1.50 1.8 weak mineralization 17.5 0.47 0.61
DH5313 2012-Z-525 28.50 30.00 1.50 2.0 Ag-Pb-Zn mineralized body 20.5 0.81 1.15
DH5314 2012-Z-526 30.00 31.50 1.50 1.9 Ag-Pb-Zn mineralized body 24.5 0.65 1.59
DH5315 2012-Z-527 31.50 33.00 1.50 1.5 weak mineralization 16.8 0.42 0.54
DH5316 2012-Z-528 33.00 34.50 1.50 1.1 weak mineralization 18.5 0.65 0.51
DH5317 2012-Z-529 34.50 36.00 1.50 1.7 Ag-Pb-Zn mineralized body 35.0 1.71 2.09
DH5318 2012-Z-530 36.00 37.50 1.50 1.4 Ag-Pb-Zn mineralized body 6.0 0.15 1.66
DH5319 2012-Z-531 37.50 38.82 1.32 0.9 weak mineralization 4.4 0.21 0.27
DH5320 2012-Z-532 38.82 40.50 1.68 1.4 weak mineralization 18.5 0.74 0.84
DH5321 2012-Z-533 40.50 42.00 1.50 1.3 weak mineralization 2.2 0.033 0.93
DH5322 2012-Z-534 42.00 43.50 1.50 1.4 weak mineralization 2.2 0.048 0.56
DH5323 2012-Z-535 43.50 45.00 1.50 2.0 weak mineralization 8.0 0.34 0.45
DH5324 2012-Z-536 45.00 46.50 1.50 1.9 weak mineralization 11.0 0.45 0.48
DH5325 2012-Z-537 46.50 48.00 1.50 1.5 weak mineralization 10.5 0.46 0.47
DH5326 2012-Z-538 48.00 49.50 1.50 1.1 weak mineralization 6.5 0.22 0.80
DH5327 2012-Z-539 49.50 51.00 1.50 1.2 Ag-Pb-Zn mineralized body 8.0 0.30 1.06
DH5328 2012-Z-540 51.00 52.50 1.50 1.1 Ag-Pb-Zn mineralized body 2.5 0.041 1.36
DH5329 2012-Z-541 52.50 54.00 1.50 1.3 Ag-Pb-Zn mineralized body 4.2 0.006 3.00
DH5330 2012-Z-542 54.00 55.50 1.50 1.5 Ag-Pb-Zn mineralized body 11.0 0.27 1.66
DH5331 2012-Z-543 55.50 57.00 1.50 1.1 Ag-Pb-Zn mineralized body 7.5 0.21 1.00
DH5332 2012-Z-544 57.00 58.50 1.50 0.9 weak mineralization 5.2 0.12 0.30
DH5333 2012-Z-545 58.50 60.00 1.50 1.3 weak mineralization 5.5 0.23 0.46
DH5334 2012-Z-546 60.00 61.50 1.50 1.4 weak mineralization 7.2 0.28 0.28
DH5335 2012-Z-547 61.50 63.00 1.50 1.2 altered rocks 1.2 0.019 0.071


Table 7 - Assay results of transverse drift PD4NCM01

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH6540 2012-Z-548 28.70 29.70 1.00 8.5 weak mineralization 4.0 0.15 0.15
DH6541 2012-Z-549 29.70 30.70 1.00 8.8 altered rocks 2.2 0.043 0.092
DH6542 2012-Z-550 30.70 31.70 1.00 8.0 altered rocks 1.5 0.017 0.037


Table 8 - Assay results of transverse drift PD4SCM01

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH6584 2012-Z-551 0.90 2.00 1.10 10.0 weak mineralization 35.7 0.082 0.50
DH6585 2012-Z-552 2.00 3.00 1.00 9.5 weak mineralization 12.8 0.080 0.52
DH6586 2012-Z-553 3.00 4.00 1.00 9.7 weak mineralization 33.0 0.34 0.51
DH6587 2012-Z-554 4.00 5.00 1.00 10.0 weak mineralization 15.2 0.072 0.44
DH6588 2012-Z-555 5.00 6.00 1.00 7.7 weak mineralization 21.5 0.19 0.53
DH6589 2012-Z-556 6.00 7.00 1.00 9.1 altered rocks 3.2 0.032 0.30
DH6590 2012-Z-557 7.00 8.00 1.00 8.9 altered rocks 2.4 0.024 0.074
DH6591 2012-Z-558 15.60 16.50 0.90 7.4 weak mineralization 4.0 0.024 0.17
DH6592 2012-Z-559 16.50 17.50 1.00 8.3 weak mineralization 7.8 0.11 0.33
DH6593 2012-Z-560 17.50 18.40 0.90 8.8 weak mineralization 5.6 0.081 0.26
DH6594 2012-Z-561 18.40 19.10 0.70 7.8 weak mineralization 7.8 0.046 0.20
DH6595 2012-Z-562 19.10 19.90 0.80 8.0 weak mineralization 6.5 0.046 0.20


Table 9 - Assay results of transverse drift PD4CM00

Sample number Assay sample number Sampling position Sample length (m) Sample weight (kg) Geological description Assay results
from (m) To (m) Ag (g/t) Pb % Zn %
DH6525 2012-Z-314 0.00 1.00 1.00 8.3 weak mineralization 1.9 0.027 0.29
DH6526 2012-Z-315 1.00 2.00 1.00 8.6 weak mineralization 4.5 0.036 0.32
DH6527 2012-Z-316 2.00 3.00 1.00 8.5 weak mineralization 1.2 0.025 0.24
DH6528 2012-Z-317 3.00 4.20 1.20 8.5 weak mineralization 2.8 0.016 0.19
DH6529 2012-Z-318 4.20 5.00 0.80 8.3 weak mineralization 1.5 0.046 0.32
DH6530 2012-Z-319 5.00 6.20 1.20 8.5 weak mineralization 3.1 0.029 0.35
DH6531 2012-Z-320 6.20 7.40 1.20 7.8 weak mineralization 2.8 0.044 0.43
DH6532 2012-Z-321 7.40 8.40 1.00 7.5 weak mineralization 1.2 0.018 0.20
DH6533 2012-Z-322 8.40 9.50 1.10 7.7 weak mineralization 1.2 0.032 0.15
DH6534 2012-Z-323 9.50 10.70 1.20 7.2 weak mineralization 1.2 0.036 0.25
DH6535 2012-Z-324 10.70 11.70 1.00 8.5 altered rocks 1.2 0.015 0.084
DH6536 2012-Z-325 11.70 12.70 1.00 8.4 altered rocks 1.2 0.008 0.044
DH6537 2012-Z-326 28.60 29.60 1.00 8.5 altered rocks 1.2 0.077 0.26
DH6538 2012-Z-327 29.60 30.40 0.80 8.4 Ag-Pb-Zn mineralized body 26.7 0.70 1.38
DH6539 2012-Z-328 30.40 31.40 1.00 8.2 altered rocks 1.5 0.014 0.080

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.

 

About Dadi

Dadi is one of the six exploration properties of Sanhe Sino-Top Resources and Technologies Ltd. ("Sino-Top"), a Chinese company that holds exclusive exploration rights to these properties, located in the prolific Erbahuo Silver District in Inner Mongolia, China. Silver Dragon Resources Inc. 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 (see Project location Map at: http://www.silverdragonresources.com/_img/China_Project_Location_Map.jpg).

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 Baiyingaolao Formation dacitic tuffaceous lava, dacitic tuff, rhyolitic tuff, and tuffaceous sandstone and conglomerate, among which dacitic tuffaceous lava and dacitic tuff are the main host rocks of mineralization.

A preliminary NI 43-101 feasibility study of the Dadi property was completed in Q3-2011, with the results presented in a Technical Report prepared by Southampton Associates Inc. of Toronto, Canada (see press release of September 7, 2011).

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 4,000 meter drilling planned for Aobaotugounao will help further define the existing mineral zones as well as identify additional mineral zones within the exploration area.

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 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 Silver Dragon into a significant silver producer by developing, its six Sino-Top properties in China (particularly Dadi and Laopandao).  For more information, please visit the Company's website at: www.silverdragonresources.com (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 Dadi silver-polymetallic 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.

 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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