BEIJING, Dec. 16, 2008 (GLOBE NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to announce that China's Ministry of Commerce ("MOC") has issued the Certificate of Approval for the sale of 50% of Sanhe Sino-Top Resources & Technologies, Ltd. ("Sino-Top") by Silver Dragon to its Chinese partner for RMB30 million (approximately USD$4.5 million), which is part of the Definitive Agreement reached between Silver Dragon and its state-owned Chinese joint venture partner, Exploration Unit of North China Nonferrous Geological Exploration Bureau, also known as Huaguan Industrial Corp. ("HIC") (see press release dated July 14, 2008).
Upon receiving the MOC approval, Silver Dragon officially became a 40% minority equity interest owner of Sino-Top and will be responsible for 40% of the costs for development of eight of nine properties in China. Under this agreement, Silver Dragon will also hold a 70% equity ownership of the Erbahuo Silver Project via the Chifeng joint venture. Additionally, the MOC approved the appointment of Mr. Mantang Zhao to the Sino-Top board as Chairman. Mr. Zhao is also Chairman and Chief Executive of Gansu Shengda Group Ltd. ("Shengda"), a private Chinese mining conglomerate, which recently acquired a 52% equity interest in Sino-Top from HIC in a separate transaction (see press release dated November 20, 2008).
"I am very pleased that we have received MOC approval for the Sino-Top equity transfer," commented Mr. Guoqiang Hao, director of Silver Dragon, director of Sino-Top, and head of HIC, "which will encourage us to accelerate the development of our assets. With the Sino-Top leadership team now stronger from these new partnerships, we have entered a new era of corporate development and anticipate greater success in the year to come."
"Approval from the Ministry of Commerce 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. With Shengda, an operating mining conglomerate, as an additional partner, our company and shareholders have significant upside potential. Our immediate objectives in China are to: (i) announce the results of our 2008 exploration program; (ii) convert existing ore calculations from Chinese standards to National Instrument 43-101 compliant standards; (iii) monetize selected assets, while continuing to explore the more than 260 square kilometers of property we have in the Erbahuo Silver District; and (iv) pursue up to USD$7.5 million private placement with our Chinese partners pursuant to the terms of the definitive agreement signed in July 2008."
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 state-owned entity 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 partner for RMB30 million (approximately USD$4.5 million) as per the equity Transfer Agreement with HIC. The Chinese side, led by Shengda and HIC, collectively owns 60%. Sino-Top holds exclusive exploration rights to eight properties and mining rights to one property (the Erbahuo Silver Mine) in northern China (Inner Mongolia), covering a total area of 261.25 km2.
Under the same agreement, the Erbahuo Silver Mine will be spun off from Sino-Top and put under a separate entity, i.e. Chifeng Silver Dragon Resources & Technologies, Ltd. ("Chifeng Silver"), an American-Chinese joint venture that will be 70% owned by Silver Dragon upon completion of the relevant government approval process.
About Silver Dragon Resources Inc.:
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 Erbahuo projects in Mexico and China, respectively. For more information, please visit the Company's website at: www.silverdragonresources.com (now available in Chinese).
The Silver Dragon Resources Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4242
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 Liangdi Silver 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. Information inferred from the interpretation of assay results and information concerning mineralization zones 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, 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 Securities and Exchange Commission.