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Silver
Dragon Resources Inc. (the "Company") (OTCBB:SDRG - News) today announced that it
has closed a convertible financing of $2.5 million over a four-year period
with Tonaquint Inc.
The
total amount funded (in cash and notes) at closing will be $2,500,000, with
payment consisting of $500,000 in cash paid at closing and $2,000,000 to be
paid in a series of ten notes (the "Lender Notes"). Each Lender
Note is in the principal amount of $200,000. Each Lender Note is due and
payable on or before the earlier of (i) forty-nine
(49) months from February 15, 2011, or (ii) subject to certain conditions
described in each Lender Note, a date beginning on September 15, 2011 for the
first Lender Note, October 15, 2011 for the second Lender Note and following
on the 15th of each month thereafter until paid. The Company also
has the right to offset the payment of any unpaid Lender Note and not receive
payment for such Lender Note or be obligated to pay such portion of the
Lender Note, subject to certain conditions and obligations. The face amount
of the convertible note issued to Tonaquint was
$2,766,000, which represented the $2,500,000 paid or to be paid to the
Company and other fees and expenses to be paid to Tonaquint.
Tonaquint
has also received a warrant to purchase 8.6 million common shares of the
Company at an exercise price of US$.50 per share at any time within three
years after the date of issuance. The warrant also contains a net exercise
provision.
The
Company plans to use proceeds from the financing to: (i)
apply for a listing on a Canadian Stock Exchange; (ii) continue the
exploration, development and resource conversion program presently under way
at the Erbahuo silver properties in China; and
(iii) for general corporate purposes.
The
securities referenced in this press release have not been registered under
the Securities Act of 1933, as amended and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.
About Tonaquint
Tonaquint
is a privately held investment company with a primary focus on real estate
and oil and gas interests in the western United States.
About Silver Dragon Resources Inc.
Silver
Dragon Resources Inc. is a mining and metals 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 Cerros las Minitas
project in Mexico, its six Sino-Top properties in China (particularly Dadi and Laopandao), and its Erbahuo Silver mine (via its Chifeng
Silver Dragon subsidiary), also in China. 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 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: general economic
conditions and financial markets, fluctuations in the market price of Silver
Dragon Resources' stock, changes in market prices of silver and other metals,
technological and operational risks, and other risks set out in the Company's
most recent Form 10-K available at www.sec.gov/edgar.shtml.
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