Silver Dragon news...
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Jan 21, 2010 12:20PM
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BEIJING, January 21, 2010 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB: SDRG) is pleased to announce the sale of its Saihanaobao and Liangdi properties for total consideration of RMB28.5 million, or USD$4.2 million. Saihanaobao and Liangdi were sold by Sanhe Sino-Top Resources & Technologies, Ltd. ("Sino-Top"), a Chinese entity in which Silver Dragon has a 40% equity interest. Sino-Top was recently awarded the prestigious Prospector/Explorer of the Year Award at the 2009 China Mining Congress & Expo for its Dadi Silver Polymetallic Project (see press release dated October 22, 2009).
The properties were sold to Tianjin Huakan Mining Investment Ltd. ("Huakan") and North China Geological Exploration Bureau, both of which are Chinese state-owned entities. Huakan is the mining investment arm of Tianjin North China Geological Exploration Bureau, which is also a state-owned entity and 100% owner of Huaguan Industrial Corp. ("HIC"), the exploration arm of the North China Geological Exploration Bureau.
Under the terms of the sale agreement, Huakan is responsible for 60% of the total sale amount, the remaining 40% of which will be paid by HIC. Also according to the sale agreement, Sino-Top shall be paid in three installments as follows: (i) 50% within ten business days of the signing of the sale agreement; (ii) 30% within five business days of government issuance of an official notification letter commencing the property transfer process; and (iii) 20% within five business days of the issuance of a new exploration license.
Saihanaobao (89.23 square kilometers) and Liangdi (32.03 square kilometers) are two of Sino-Top’s eight wholly-owned exploration properties. Sino-Top has invested approximately RMB11 million (USD$1.6 million) in exploration on these two properties since they were acquired five years ago.
“The sale of Saihanaobao and Liangdi fits Sino-Top’s overall corporate strategy of transitioning from explorer to producer,” commented Mr. Mantang Zhao, Chairman of Sino-Top and Chairman and CEO of Sino-Top’s 52% majority owner, Gansu Shengda Group Ltd. “By divesting ourselves of non-core assets, we can focus our efforts on the premium Dadi and Laopandao properties for accelerated exploration and mine development.”
“By monetizing these two assets at a premium, we can accelerate the development of our award winning Dadi project, which we believe will significantly increase shareholder value,” commented Marc Hazout, President and CEO of Silver Dragon. “The Dadi resource estimate report is expected to be released this quarter, commencing the acceleration process.”
About Sino-Top – China Mining 2009 Award Winner
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 partners. The Chinese side, led by Gansu Shengda Group Ltd. (“Shengda”), at 52%, and HIC, at 8%, collectively owns 60% of Sino-Top. Following the divestitures of Saihanaobao and Liangdi, the company holds exclusive exploration rights to six properties in northern China (Inner Mongolia), covering a total area of 139 km2. Sino-Top won the prestigious Prospector/Explorer of the Year Award for its Dadi Silver Polymetallic Project at the China Mining Congress & Expo 2009 held in Tianjin, China, during October 20-22, 2009.
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