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Silver Dragon Resources (SDRG.OB) Silver Mine to Commence Production in First Half of 2011

|Includes: Silver Dragon Resources, Inc. (SDRG)

Silver metal and mining company Silver Dragon Resources today announced that its Erbahuo silver mine in Inner Mongolia, China, will commence production in the second quarter of 2011.

The Erbahuo silver mine spans 1.2 square kilometers in a location about 450 kilometers northeast of Beijing China. The area comprises the Erbahuo mining district, a part of the prolific silver belt where the north edge of the North China platform meets the south edge of the Hercynian fold belt.

According to today’s press release, the location is important as it 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, and Erbahuo was once considered a silver manganese mine within a fracture zone. However, in recent years the features of strata bound silver deposits have been discovered, which suggests there may be further resources in sulfides containing silver, copper, molybdenum and other metals.

“We are pleased to become a producer in 2011, and grateful to have a state-owned partner to assist us in achieving this goal,” Marc Hazout, president and CEO of Silver Dragon stated in the press release. “With the strong capabilities of our partners, and silver prices at historical highs, we are confident the Erbahuo mine will be a successful operation.”

Silver Dragon Director Guoqiang Hao implied the long-term role Erbahuo will play in the company’s future.

“We look forward to generating revenue from the production at Erbahuo, and expect to invest in additional exploration at the mine in order to further expand the project’s value,” Hao stated. “This milestone will establish and recognize Silver Dragon as a silver producer in China.”

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