TORONTO, Sept. 13, 2005 (PRIMEZONE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) today announced the signing of a Definitive Agreement with Linear Gold Corp. ("Linear") (TSX:LRR) whereby Silver Dragon has been granted the option to acquire 55% of Linear's interest in and rights to any revenues derived as a result of the exploration, evaluation and development of the Tierra Blanca property located in Durango, Mexico.
The transaction requires a payment by Silver Dragon of up to US$230,000 over a two-year period -- US$45,000 of which has been paid along with 100,000 shares of restricted common stock, plus up to an additional 500,000 shares of restricted common stock which is to be delivered to Linear over the next 2 years. In addition, Silver Dragon is committed to investing a minimum of $150,000, up to a maximum of $850,000, as work commitments on the Property over the next 2 years.
Results from soil sampling in the concession show 18 out of 62 samples containing in excess of 100 ppb gold reaching a maximum of 1370 ppb gold (1.37 g/tonne of gold). The distribution of the soil gold anomaly occurs over an area of 500 metres by 350 metres which is open in three directions and associated with a zone of granodioritic to dacitic intrusions penetrating Cretaceous-aged siltstones. The anomaly zone is marked by extensive silicification which is also present in other areas of the concession yet to be sampled.
An initial rock-chip sampling program, consisting of 35 samples, contains four samples with gold in excess of 1.0 g/tonne. Gold grades ranged from 1.39 to 17.6 g/tonne. Silver assayed high, greater than 100 g/tonne, in eight samples ranging from 282 to 2060 g/tonne and averaging 1118 g/tonne (36 oz/tonne).
A second phase of rock-chip sampling also has confirmed the zone of gold mineralization with 5 out of 30 samples containing in excess of 1.0 g/tonne of gold reaching a high of 2.73 g/tonne of gold. In addition, 5 out of 30 samples also contain in excess of 40 g/tonne of silver reaching a high of 179 g/tonne of silver.
"This is a very exciting and significant opportunity for our company to be able to partner with Linear Gold Corp. We are encouraged by the existing technical data we reviewed on the Tierra Blanca property as part of our due diligence. We look forward to commencing a development plan and expect to initiate a work program this month. Silver Dragon's immediate objective is to complete its work program on the Property in an attempt to prove up the mineralization." said Marc Hazout, President and CEO.
Silver Dragon is a mining and metal company focused on acquiring and developing a portfolio of silver properties 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 former producing properties with significant untapped exploration potential.
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