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News Release

Silver Dragon Discovers One Meter of 1,570 g/t Silver, 46.8% Lead and 7.2% Zinc at its Dadi Silver-Polymetallic Project in China

BEIJING, August 28, 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 Silver-Lead-Zinc polymetallic property in Inner Mongolia, Northern China. Dadi is owned by Sanhe Sino-Top Resources & Technologies, Ltd. (“Sino-Top”), of which Silver Dragon Resources Inc. has a 40% equity interest. 

Significant grades were discovered in mineralization zone II within transverse drifts NCM02 and NCM06 at 1,350 meters deep.  Highlights are as follows:

At transverse drift NCM02, assays showed 318 g/t silver 4.76% lead, and 3.28% zinc at drill hole DH6097; 270 silver, 3.56%, and 2.73% zinc at drill hole DH6098; and 204 silver, 2.87% lead, and 1.72% zinc at drill hole DH6099

At transverse drift NCM06, assays showed 288 g/t silver, 7.18% lead, and 1.61% zinc at drill hole DH6089; 465 g/t silver, 10.66% lead, and 2.47% zinc at drill hole DH6090; 656 g/t silver, 17.98% lead, and 3.16% zinc at drill hole DH6091; 1,570g/t silver, 46.82% lead, and 7.21% zinc at drill hole DH6092; and 132 g/t silver, 3.62% lead, and 0.66% zinc at drill hole DH6093.

  1. Underground drilling

Related underground drill holes are ZK0006, ZK0007, ZK0008, ZK0103, and ZK0104.  These underground drill holes are located at transverse drifts PD4NCM00 and PD4NCM01 (Fig. 1), and were performed to help define dipping extensions within mineralization zone IV.

The underground drill holes ZK0006, ZK0007, and ZK0008 have the same azimuth of 220°, but different dip angles. They are located within transverse drift PD4NCM00.

Drill hole ZK0006 is 100.5m long and its dip angle is 50°.  Assay results do not show strong mineralization, but alteration (Table 1). 

Drill hole ZK0007 is 141 meters long and its dip angle is 72°.  Assay results show that, from 75m to 81m intervals (4.5m drilling length), three samples reached industrial cutoff grade of zinc (Table 2) and the highest grades are Ag 11.5 g/t, Pb 0.05% and Zn 1.46%. 

Drill hole ZK008 is 160 meters long and its dip angle is 85°. Assay results show that, from 116.1m to 124.25m intervals (8.15m drilling length), the drilling cores reveal strong alteration and zinc mineralization.  Among those 5 samples, the sample DH5447 has the highest grades: Ag 12.2 g/t, Pb 0.13%, and Zn 2.15% (Table 3).

Table 1 - Assay results of underground drill hole ZK0006 in Dadi Property

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 %
DH5400 2012-Z-2338 18.68 19.50 0.82 1.0 Altered rock 1.2 0.037 0.14
DH5401 2012-Z-2339 19.50 21.00 1.50 1.5 Altered rock 1.2 0.008 0.057
DH5402 2012-Z-2340 47.73 48.48 0.75 1.0 Altered rock 1.2 0.010 0.036
DH5403 2012-Z-2341 55.50 57.00 1.50 1.3 Altered rock 1.2 0.047 0.092
DH5404 2012-Z-2342 57.00 58.50 1.50 1.1 Altered rock 1.2 0.024 0.093
DH5405 2012-Z-2343 58.50 60.00 1.50 1.8 Altered rock 1.2 0.064 0.071
DH5406 2012-Z-2344 67.50 69.00 1.50 1.7 Altered rock 1.2 0.006 0.042
DH5407 2012-Z-2345 90.00 91.50 1.50 1.5 Altered rock 1.2 0.017 0.039

* 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 in Yanjiao Central Laboratory of North China Nonferrous Geological Survey Bureau.

Table 2 - Assay results of underground drill hole ZK0007 in Dadi Property

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 %
DH5430 2012-Z-3053 16.25 18.00 1.75 2.2 Altered rock 1.2 0.004 0.012
DH5439 2012-Z-3062 24.00 25.50 1.50 1.9 Altered rock 1.2 0.008 0.055
DH5440 2012-Z-3063 28.50 30.00 1.50 1.6 Altered rock 1.2 0.005 0.050
DH5436 2012-Z-3059 43.50 45.00 1.50 2.1 Altered rock 1.2 0.002 0.010
DH5437 2012-Z-3060 45.00 46.50 1.50 2.0 Altered rock 1.2 0.004 0.015
DH5438 2012-Z-3061 46.50 47.10 0.60 0.9 Altered rock 1.2 0.004 0.008
DH5431 2012-Z-3054 75.00 76.50 1.50 1.9 Mineralized body 1.2 0.065 0.66
DH5432 2012-Z-3055 78.00 79.50 1.50 1.9 Mineralized body 1.2 0.004 0.41
DH5433 2012-Z-3056 79.50 81.00 1.50 1.3 Mineralized body 11.5 0.050 1.46
DH5434 2012-Z-3057 81.00 82.00 1.00 1.4 Altered rock 1.2 0.006 0.15
DH5435 2012-Z-3058 85.50 87.00 1.50 1.6 Altered rock 1.2 0.003 0.028

 

Table 3 - Assay results of underground drill hole ZK0008 in Dadi Property

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 %
DH5452 2012-Z-3071 114.40 115.40 1.00 1.1 Altered rock 1.2 0.008 0.051
DH5445 2012-Z-3064 115.40 116.10 0.70 1.2 Altered rock 1.2 0.008 0.064
DH5446 2012-Z-3065 116.10 118.00 1.90 3.3 Mineralized body 18.2 0.22 1.40
DH5447 2012-Z-3066 118.00 119.50 1.50 2.0 Mineralized body 12.2 0.13 2.15
DH5448 2012-Z-3067 119.50 121.00 1.50 2.3 Altered rock 7.2 0.079 0.27
DH5449 2012-Z-3068 121.00 122.50 1.50 1.7 Altered rock 7.5 0.088 0.27
DH5450 2012-Z-3069 122.50 124.25 1.75 2.2 Mineralized body 5.5 0.057 0.51
DH5451 2012-Z-3070 124.25 125.50 1.25 1.7 Altered rock 1.2 0.002 0.019

Underground drill holes ZK0103 and ZK0104 have the same azimuth of 220°, but different dip angles. They are located within transverse drift PD4NCM01.

Drill hole ZK0103 is 235.5m long and its dip angle is 65°.  Assay results show two intervals reaching high grades of silver, lead and zinc.  From 181.5m to 182.18m (0.68m drilling length) interval (sample DH5392), the grades are Ag 11.8 g/t, Pb 0.54%, and Zn 0.72%; from 219.15m to 220.5m (1.35m drilling length) interval (sample DH5395), the grades are Ag 83.6 g/t, Pb1.12%, and Zn 1.14% (Table 4).

Drill hole ZK0104 is 110m long and its dip angle is 50°.  Assay results show one mineralized interval, from 51m to 54m (3m drilling length), and the average grades are Ag 12.3 g/t, Pb 0.165%, and Zn 1.25% (Table 5).

Drill hole ZK0105 is 161m long and its dip angle is73°.  Assay results at this moment show only one interval (from 4.67m to 6m) has reached cutoff grade of lead: sample DH5459 – Ag 6 g/t, Pb 0.7%, and Zn 0.12% (Table 6).

Table 4 - Assay results of underground drill hole ZK0103 in Dadi Property

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 %
DH5380 2012-Z-2321 14.25 15.00 0.75 0.9 Altered rock 1.8 0.059 0.091
DH5381 2012-Z-2322 15.00 16.50 1.30 1.7 Altered rock 12.5 0.29 0.20
DH5382 2012-Z-2323 16.50 18.00 1.50 1.4 Altered rock 11.2 0.20 0.21
DH5383 2012-Z-2324 18.00 19.50 1.50 1.3 Altered rock 5.0 0.090 0.14
DH5384 2012-Z-2325 39.00 40.50 1.50 1.1 Altered rock 9.5 0.20 0.19
DH5385 2012-Z-2326 40.50 42.00 1.50 1.3 Altered rock 4.8 0.12 0.16
DH5386 2012-Z-2327 64.50 66.00 1.50 0.8 Altered rock 4.5 0.042 0.15
DH5387 2012-Z-2328 66.00 67.05 1.05 0.9 Altered rock 2.0 0.040 0.079
DH5388 2012-Z-2329 84.63 85.25 0.62 0.8 Altered rock 8.2 0.33 0.29
DH5389 2012-Z-2330 121.50 123.00 1.50 1.3 Altered rockŠâ 1.2 0.016 0.045
DH5390 2012-Z-2331 123.00 124.50 1.50 1.6 Altered rock 1.2 0.037 0.17
DH5391 2012-Z-2332 124.50 126.00 1.50 1.7 Altered rock 1.2 0.067 0.071
DH5392 2012-Z-2333 181.50 182.18 0.68 0.5 Mineralized body 11.8 0.54 0.72
DH5393 2012-Z-2334 199.91 201.00 1.09 0.9 Altered rock 1.5 0.020 0.14
DH5394 2012-Z-2335 218.15 219.15 1.00 1.1 Altered rock 1.2 0.010 0.038
DH5395 2012-Z-2336 219.15 220.50 1.35 0.9 Mineralized body 83.6 1.12 1.14
DH5396 2012-Z-2337 220.50 221.50 1.00 0.8 Altered rock 1.2 0.017 0.047

Table 5 - Assay results of underground drill hole ZK0104 in Dadi Property

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 %
DH5410 2012-Z-3040 35.25 36.00 0.75 0.9 Altered rock 1.2 0.007 0.11
DH5411 2012-Z-3041 36.00 37.50 1.30 1.3 Altered rock 1.2 0.013 0.070
DH5412 2012-Z-3042 42.50 43.13 0.63 0.6 Altered rock 1.2 0.009 0.21
DH5413 2012-Z-3043 4.50 6.00 1.50 1.6 Altered rock 1.8 0.048 0.34
DH5414 2012-Z-3044 45.75 47.31 1.56 1.9 Altered rock 1.2 0.004 0.12
DH5415 2012-Z-3045 51.00 52.50 1.50 1.1 Mineralized body 10.6 0.16 0.66
DH5416 2012-Z-3046 52.50 54.00 1.50 1.4 Mineralized body 14.0 0.17 1.84
DH5417 2012-Z-3047 54.00 55.50 1.50 1.8 Altered rock 4.2 0.040 0.24
DH5418 2012-Z-3048 55.50 57.00 1.50 1.0 Altered rock 1.2 0.020 0.11
DH5419 2012-Z-3049 57.00 58.50 1.50 1.6 Altered rock 1.2 0.008 0.049
DH5420 2012-Z-3050 61.50 63.00 1.50 1.5 Altered rock 1.2 0.008 0.044
DH5421 2012-Z-3051 84.00 85.50 1.50 1.6 Altered rock 1.2 0.042 0.078
DH5422 2012-Z-3052 103.50 105.00 1.50 1.7 Altered rock 1.2 0.023 0.047

Table 6 - Assay results of underground drill hole ZK0105 in Dadi Property

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 %
DH5459 2012-Z-3883 4.75 6.00 1.25 1.3 Mineralized body 6.0 0.70 0.12
DH5460 2012-Z-3884 85.50 87.00 1.50 1.4 Altered rock 1.5 0.009 0.24
DH5461 2012-Z-3885 87.00 88.50 1.50 1.4 Altered rock 2.5 0.007 0.23
DH5462 2012-Z-3886 88.50 90.00 1.50 1.5 Altered rock 1.8 0.007 0.22
DH5463 2012-Z-3887 90.00 91.50 1.50 1.4 Altered rock 1.4 0.008 0.085
DH5464 2012-Z-3888 91.50 93.00 1.50 1.2 Altered rock 1.2 0.003 0.040
DH5465 2012-Z-3889 93.00 94.50 1.50 2.0 Altered rock 1.8 0.004 0.046

2.  Transverse drifts
The latest assay results relate to three transverse drifts: PD4NCM03, 1,350m NCM06 and 1,350m NCM02.

Transverse drift PD4NCM03 is located in PD4 adit to detect lateral extensions of mineralization zone IV at the 1,330m level (Fig. 1).  Assay results of channel sampling show that all samples are below industrial cutoff grades of silver, lead and zinc.  However, zinc grades of all 5 samples are very close to cutoff grades (0.5%), indicating weak mineralization at this part of mineralization zone IV (Table 6).

Transverse drift PD4NCM05 is also located at PD4 adit to detect lateral extensions of mineralization zone IV at the 1,330m level (Fig. 1).  The assay results of channeling samples show that all samples reach industrial cutoff grades of silver, lead, and zinc, except for one sample (DH6631).  The highest one is sample DH6632: Ag 68.2 g/t, Pb 0.77%, and Zn 3.68% (Table 8).  These results indicate that the mineralization zone IV at this position has significant silver, lead and zinc mineralization.

Table 7 - Assay results of transverse drift NCM03 at PD4 in mineralization zone IV of Dadi Property

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 %
DH6607 2012-Z-2359 7.10 8.00 0.90 9.1 Altered rock 1.8 0.097 0.22
DH6608 2012-Z-2360 8.00 8.90 0.90 8.8 Altered rock 1.6 0.060 0.14
DH6609 2012-Z-2361 8.90 10.10 1.20 8.1 Altered rock 4.8 0.25 0.34
DH6610 2012-Z-2362 10.10 11.20 1.10 8.6 Altered rock 7.1 0.32 0.42
DH6611 2012-Z-2363 11.20 11.90 0.70 8.3 Altered rock 9.2 0.25 0.35
DH6612 2012-Z-2364 11.90 12.70 0.80 10.6 Altered rock 1.5 0.025 0.34

Table 8 - Assay results of transverse drift NCM05 at PD4 in mineralization zone IV of Dadi Property

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 %
DH6630 2012-Z-3893 23.90 25.10 1.20 10.5 Mineralized body 5.8 0.053 1.60
DH6631 2012-Z-3894 25.10 26.30 1.20 10.8 Altered rock 3.8 0.019 0.31
DH6632 2012-Z-3895 26.30 27.30 1.00 10.1 Mineralized body 68.2 0.77 3.68
DH6633 2012-Z-3896 27.30 28.60 1.30 9.9 Mineralized body 16.5 0.060 0.82
DH6634 2012-Z-3897 28.60 29.40 0.80 6.4 Mineralized body 1.2 0.005 1.06

Tables 9 and 10 show assay results of channel sampling within transverse drifts NCM06 and NCM02 at the 1,350m level. Those two drifts are designed to detect lateral mineralization zone II (Fig. 2).

Transverse drift NCM06 is 74.5m long and reveals significant mineralization of silver, lead and zinc.  Assay results of channel sampling show that, from 30.5m to 35m intervals, 5 samples reach industrial grades (Table 9).  The highest one (sample DH6092) has grades of Ag 1,570 g/t, Pb 46.82% and Zn 7.21%.  The average grades of this interval are Ag 516.89 g/t, Pb 13.967% and Zn 2.557%.

Transverse drift NCM02 is 54m long and also reveals significant mineralization.  Based on current assay results, from 31.7m to 34.9m intervals (3.2m length), three samples contain very high silver, lead and zinc (Table 10).  Sample DH6097 has Ag 318 g/t, Pb 4.76% and Zn 3.28%; sample DH6098 has Ag 270 g/t, Pb 3.56% and Zn 2.73%, and sample DH6099 has Ag 204 g/t, Pb 2.87% and Zn1.72%.

Mineralization zone II is the most significant ore zone in Dadi property and the assay results of those two transverse drifts provide further evidence to support this achievement.

Table 9 - Assay results of transverse drift NCM06 at 1,350m level in mineralization zone II of Dadi Property

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 %
DH6088 2012-Z-2346 22.10 23.00 0.90 7.0 Altered rock 15.2 0.46 0.20
DH6089 2012-Z-2347 30.50 31.50 1.00 7.2 Mineralized body 288 7.18 1.61
DH6090 2012-Z-2348 31.50 32.50 1.00 7.6 Mineralized body 465 10.66 2.47
DH6091 2012-Z-2349 32.50 33.50 1.00 7.2 Mineralized body 656 17.98 3.16
DH6092 2012-Z-2350 33.50 34.00 0.50 8.8 Mineralized body 1,570 46.82 7.21
DH6093 2012-Z-2351 34.00 35.00 1.00 9.1 Mineralized body 132 3.62 0.66
DH6094 2012-Z-2352 35.00 36.00 1.00 7.7 Altered rock 5.0 0.13 0.21
DH6095 2012-Z-2353 36.00 37.00 1.00 7.4 Altered rock 6.0 0.13 0.24
DH6096 2012-Z-2354 37.00 38.00 1.00 7.2 Altered rock 1.6 0.038 0.064

Table 10 - Assay results of transverse drift NCM02 at 1,350m level in mineralization zone II of Dadi Property

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 %
DH6097 2012-Z-2355 31.70 32.70 1.00 8.7 Mineralized body 318 4.76 3.28
DH6098 2012-Z-2356 32.70 33.70 1.00 9.2 Mineralized body 270 3.56 2.73
DH6099 2012-Z-2357 33.70 34.90 1.20 8.0 Mineralized body 204 2.87 1.72

Fig. 1 - Plane map of mineralization zone IV at PD4 adit (1,330m level) in Dadi Property

Fig. 2 - Plane map of mineralization zone II at 1,350m level in Dadi Property

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 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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