Cheap OTC Stocks: Silver Dragon Resources (SDRG)

Shares in the penny stock of Silver Dragon Resources Inc. (OTCBB: SDRG) has seen a nice bounce off their recent 52 week low set on Wednesday.  SDRG announced on the 18th that a lawsuit filed against them had been withdrawn and formally approved by the Beijing Court. SDRG closed on the HOD in the last trading session with shares of the penny stock having gained 34% since the low from Wednesday.

Silver Dragon Resources, a mining and metals company focused on the exploration, acquisition, development and operation of silver mines in proven silver districts globally, had been the subject of a court case which was withdrawn since SDRG and the other defendants were able to prove that the act of transferring the equity by Silver Dragon Resources was legal and that there was no evidence showing malicious conspiracy.

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SDRG Stock Chart:

SDRG Stock Ananlysis:

Market Cap: 3.74M
Enterprise Value: 8.15M

52-Week High:
(Jul 14, 2011) 0.19
52-Week Low:
(Apr 25, 2012) 0.0205

Avg Vol (3 month): 1,060,190
Avg Vol (10 day): 1,099,350
Shares Outstanding: 135.85M
Float: 121.25M
% Held by Insiders: 18.73%

5 Day History
Percent Change -5.17%
Moving Average 0.0242
Average Volume 1,246,689

Earlier on April 10th, SDRG announced that, after five years of exploration, it had completed a geological report on the results from the Laopandao silver-copper-tin polymetallic project in Inner Mongolia, Northern China. Laopandao apparently has evolved into an advanced exploration project. An extensive underground tunnel system had to be constructed and a drilling, trenching & tunneling program is well underway with a total of 7,174 meters of surface trenching, 14,632 meters of diamond drilling, and 2,822 meters of underground exploration-development (tunneling) completed as of April 10, 2012.

Details of the Laopadao Project can be viewed here.

About SDRG:

Silver Dragon Resources Inc. has yet to record any revenues from any of its properties. They own a 40% equity interest in Sanhe Sino-Top Resources and Technologies, Ltd. (Sino-Top), which was incorporated in 2003 as a Chinese company wholly owned by Huaguan Industrial Corp. (HIC), a subsidiary of the state-owned 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., at 52%, and HIC, at 8%, collectively own 60% of Sino-Top.

Sino-Top holds exclusive exploration and development rights to six properties in Northern China (Inner Mongolia), covering a total area of 139 km2. Silver Dragon Resources is also entitled to 70% interest of 30% of the net proceeds of Erbahuo Silver mine, to which Chifeng Silver Dragon, a wholly-owned subsidiary of Sino-Top, holds exclusive exploration and mining rights.

Silver Dragon resources also operate in Mexico through their wholly-owned subsidiary, Silver Dragon Mining De Mexico S.A. de C.V., a Mexican company incorporated on April 21, 2006. Activities in Mexico are now dormant pending resolution of the legal situation.

SDRG is engaged in the acquisition and exploration of silver and other mineral properties. Their primary focus is the exploration of seven properties located in the Erbahuo Silver District in Northern China while they also have 15 concessions known as the Cerro Las Minitas property in Guadalupe, Durango, Mexico.

Bottom Line: As of March 2, 2012, there were approximately 391 shareholders of record of SDRG penny stock. Considering that roughly $30K of volume traded on Friday, SDRG is a good, cheap penny stock to watch, and perhaps even buy, but on the basis that you can not invest into this OTC stock like you could SEFE or even OMVE.


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