BEIJING, Feb. 24, 2009 (GLOBE NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to report on the progress of the mining license transfer of Erbahuo Silver Mine. The license is being transferred from the current holder, Huaguan Industrial Corp. ("HIC"), a Chinese state-owned entity and Silver Dragon's joint venture partner, to 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. The mining license transfer process involves not only a change in license holder titles, but also constitutes a part of the permitting process for mine development and mill construction. To date, the following major mandatory steps have been completed:
-- Incorporation of Chifeng Silver Dragon Resources & Technologies,
Ltd.;
-- Payment of mine safety deposit (RMB300,000 / $US 42,850);
-- Mine Reserve Verification Report and registration with the
Department of Land and Resources of Inner Mongolia;
-- Metallurgic Test Report;
-- Mine Development and Utilization Plan;
-- Payment of State Compensation Tax (RMB4,486,800 / $US 641,000);
-- Water and Soil Conservation Report;
-- Mine Safety Evaluation Report;
-- Geologic Hazard Evaluation Report;
-- Environmental Impact Evaluation Report;
-- Land Restoration Plan;
-- Geologic Environment Restoration Plan;
-- Payment of Geologic Environment Restoration Deposit (RMB553,135.47
/ $US 80,000); and
-- Proof of non-existence of military facilities within the mine area.
Chifeng Silver is finalizing the comprehensive application package for the mining license transfer, which will be submitted to the Land & Resources Bureau of Chifeng City. Upon approval by the Bureau, Chifeng Silver will be required to provide a certificate for a bank deposit of RMB10 million ($US 1.43 million) in its corporate account. Chifeng Silver expects the new mining license to be issued in the second quarter of 2009.
"We are extremely pleased to be finalizing the mining license transfer application with respect to the Erbahuo Silver Mine," commented Mr. Marc Hazout, President of Silver Dragon Resources Inc. "The application process has been rigorous and our team in China has done an exceptional job making sure that every last detail has been attended to. Completion of the mining license transfer will be a significant step in advancing towards production in China."
About Erbahuo Silver Mine
Erbahuo silver mine covers an area of 1.2 square kilometers. It is located 120 kilometers northwest of the city of Chifeng, which is 450 kilometers northeast of Beijing, China and comprises the Erbahuo mining district, part of the prolific silver belt on the structural join where the north edge of the North China platform meets with the south edge of the Hercynian fold belt of the Great Xingan Mountains. The deposit is a shear zone hosted and stratabound volcanogenic hydrothermal system of parallel trending and dipping mineralization containing pyrolusite, psilomelane, limonite, pyrite, galena, sphalerite, chalcopyrite, and other silver related mineralization. Silver is concentrated within manganese oxides. Erbahuo used to be considered a silver manganese mine in a fracture zone. In recent years, however, the features of strata bound Ag deposits have been discovered, suggesting the potential for significant further resources in sulfides that contain silver, copper, molybdenum and other metals.
An NI43-101 technical report on this property was completed in July, 2007, by Micromine Consulting ("Micromine"), a resource sector software developer and consulting company headquartered in Perth, Australia. Currently, a feasibility study on project development of the Erbahuo silver mine is being conducted by Beijing Ten-star Technology Ltd., a Chinese project management and consulting service provider (see press release of October 2, 2008).
The Erbahuo silver mine is wholly-owned by Sanhe Sino-Top Resources & Technologies Ltd. ("Sino-Top"), a Chinese company of which Silver Dragon currently owns 40% as per the equity transfer agreement with Huaguan Industrial Corp. (see press release of July 14, 2008). Under the same agreement, however, Erbahuo Silver Mine will be spun off from Sino-Top and be 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, as well as predictions and forecasts for production, 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 mineralized 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.