Silver Dragon Acquires Mill, Seeks to Begin Production At Cerro las Minitas

DURANGO, MEXICO - Silver Dragon Resources Inc. reported that it has acquired its first mill. The mill is currently located in the Municipality of Chalchihuites, in the Mexican State of Zacatecas. It has an initial processing capacity of 50 tonnes per day, which can be expanded as the Company continues to develop its Cerros las Minitas Silver Project in Durango, Mexico. It will be dismantled, transported, and reassembled on the Company's Santo Ninyo concession, and is expected to become operational in the first quarter of 2009.
The mill was acquired at a price of US$245,000, including approximately US$20,000 for delivery and assembly. Silver Dragon paid US$25,000 upon signing, with the balance due in 6 months. Silver Dragon and its team of engineers performed due diligence on the mill, and determined that all major pieces of machinery were in excellent condition. The mill was originally built in 2005, but never went into production. Management moved quickly to acquire this mill at a favorable price when it became available.
Marc Hazout, President and CEO of Silver Dragon Resources Inc., commented, ``The purchase of this mill will enable the Company to minimize its expenditures in Mexico and continue its three-phase exploration program to bring the Cerros las Minitas polymetallic property to a full feasibility stage, in a timely manner and with less capital expenditure.''