TORONTO, June 12, 2007 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) today announced that it has received Ministry of Commerce ("MOC") approval to increase its equity interest in Sanhe Sino-Top Resources and Technologies, Ltd. ("Sino-Top"). Sino-Top is a Chinese company which holds the exploration and mining rights to nine properties including the Erbahuo Silver Mine located in the prolific Erbahuo Silver District in Northern China.
"Approval from the Ministry of Commerce regarding our equity increase in Sino-Top is a tremendous milestone for our company," commented Mr. Marc Hazout, President and Chief Executive Officer of Silver Dragon Resources Inc. "Our Chinese partners have shown and continue to show great confidence in Silver Dragon, particularly by taking equity in our company as consideration for our increased interest in Sino-Top. With Silver Dragon's ownership of Sino-Top now at 90%, our company and our shareholders have significant upside potential. Our immediate objectives with the property are: (i) to monetize our assets via production at the Erbahuo Silver Mine; (ii) to convert existing ore calculations from Chinese standards to National Instrument 43-101 compliant standards, some conversion of which has been completed; and (iii) to continue exploring the more than 260 square kilometers of property we have in the Erbahuo Silver District."
Under the terms of the agreement approved by the MOC, Silver Dragon has secured an additional 30% ownership interest in Sino-Top, increasing its total equity position from 60% to 90%, in exchange for 2 million restricted shares of common stock of the Company. Regardless of its equity position, Silver Dragon is responsible for 100% of the exploration and property maintenance expenses on the nine properties. However, as a result of the increase in equity announced previously and approved herein, Silver Dragon will benefit from an additional 30% ownership interest with no increase in ongoing property expenses. Sino-Top has also received approval by the MOC to increase the registered capital and total investment of the company to USD$5.12 Million.
About Silver Dragon
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 the Erbahuo projects in Mexico and China. 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: Statements contained in this news release that are not historical fact, such as statements regarding the economic prospects of the company's projects, future plans or future revenues, future exploration plans and prospects, timing of development or potential expansion or improvements, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties include, but are not limited to, the company's ability to raise sufficient capital to fund development, changes in economic conditions or financial markets, changes in prices for the company's mineral products or increases in input costs, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments in China, technological and operational difficulties or inability to obtain permits encountered in connection with exploration and development activities, labour relations matters, and changing foreign exchange rates, all of which are described more fully in the company's filings with the Securities and Exchange Commission.