TORONTO, June 18, 2007 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) is pleased to announce the discovery of a new mineralized chimney at Cerro Las Minitas, the Company's Silver Project in Durango, Mexico. The new chimney discovery, which has been named Esperanza, has been cut by three diamond drill holes, LM-17, LM-18, and LM-20.
Drill Holes LM-17 and LM-18 intersected margins of the chimney body returning 17.85 and 15 meter intersections, respectively, containing lead (Pb) and zinc (Zn) mineral sulfides. Based on information from these drill holes, a third drill hole, LM-20, was drilled to intercept the estimated center of the chimney body. Accordingly, drill hole LM-20 intercepted 100 meters of mineralization, including 70 meters of continuous lead (Pb) and zinc (Zn) sulfides.
"With the discovery of Esperanza, we intend to focus our exploration activities on underground drilling of this chimney body," commented Mr. Marc Hazout, President of Silver Dragon Resources Inc. "Drilling the chimney body from underground, in the Guadalupe Ramp and from old workings, will allow us to explore and develop the Esperanza chimney much more rapidly and at significantly lower costs. The Guadalupe Ramp is on target to intersect the Esperanza chimney, the working face of which is only 200 meters away. Upon reaching the chimney, we expect to cross-cut approximately 12 meters from the ramp to enter the chimney's upper portions, following which, we will proceed with development as rapidly as is practical. We anticipate beginning production of sulfide material from the chimney in October of 2007."
Current demand for laboratory assays is high. As a result, Silver Dragon anticipates a total turnaround time of between seven and nine weeks for complete assay results of drill holes LM-17, LM-18, and LM-20. As of the date of this release, the Company has partial assay results for drill holes LM-17 and LM-18. Although partial results indicate significant silver values, Securities Exchange Commission regulations do not allow for the reporting of partially completed assays. Completed assays are expected within the next two to three weeks.
As a result of the discovery of and focus on the Esperanza chimney, development of the oxide portion of the La Chiva body has been suspended. Silver Dragon anticipates higher returns from the processing of sulfides from the Esperanza chimney compared to the La Chiva body as the sulfide ores at Cerro Las Minitas have known favorable metallurgical characteristics. Oxide ores from the La Chiva body that are stockpiled on surface will be held in reserve at present.
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 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: The statements contained herein which are not historical, such as statements regarding the pace and cost of development of the Esperanza chimney, commencement of production of sulfide material from the Esperanza chimney, timing for completion of assay results, silver amounts in partial assay results, and returns from processing of sulfides from the Esperanza chimney, are forward-looking statements that 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 market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.