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Gold Dragon Resources Corporation Announces Preliminary Economic Assessment on Its Potash Project in Chile

TORONTO, ONTARIO -- (Marketwired) -- 05/14/14 -- Gold Dragon Resources Corporation ("GDR") is pleased to announce the results of a technical report (the "PDI Report") recently completed in accordance with National Instrument 43-101 ("NI 43-101") by its majority controlled subsidiary, Potash Dragon Inc. ("PDI"), in respect of PDI's potash property in the Salar de Llamara in northern Chile. The PDI Report includes a maiden solid evaporite mineral resource estimate and a new preliminary economic assessment for the water soluble solid minerals, such as sulphate of potash (SOP) and nitrates, which occur in a number of extensive surface outcrops on PDI's potash properties in northern Chile. These minerals are used to produce a variety of premium fertilizer products, collectively referred to as Specialty Plant Nutrients ("SPN"). The extensive deposits are amenable to recovery by inexpensive surface strip mining and heap leaching with water followed by solar evaporation to selectively concentrate specific fertilizer products.

PDI's primary focus is its heap leach project in northern Chile (the "LHLP Project"), which combines a significant resource with low cost mining and a premium product. In the current base case, the capital estimate for the LHLP Project is US$57 million, with a construction period of 1.8 years, ramping up to an annual EBITDA rate of US$70 million over an optimised life of mine of 9.3 years. The base case NPV for the LHLP Project is US$274 million at an 8% discount rate with an IRR of 113%. The base case includes inferred resources only. In the upside case for the LHLP Project, which includes inferred resources and exploration potential, the capital estimate is US$80 million, with a construction period of 1.8 years, ramping up to an annual EBITDA rate of US$75 million over an optimised life of mine of 12.8 years. The upside case NPV for the LHLP Project is US$426 million at an 8% discount rate with an IRR of 176%. Below is a summary of the LHLP Project inferred resources and exploration potential. The PDI Report is available on GDR's website at http://www.golddragonresources.ca.

----------------------------------------------------------------------------
Llamara Heap Leach Project Resource
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                                                Four mixed fertilizers (4MF)
                                                         statistics
----------------------------------------------------------------------------
                                    In situ ore
Resource Category                        tonnes          K2SO4(t)  Na2SO4(t)
----------------------------------------------------------------------------
Inferred                            111,477,194    t    2,098,071  5,489,073
----------------------------------------------------------------------------
                                                 ppm       18,821     49,239
----------------------------------------------------------------------------
Exploration. Potential              115,900,250    t    2,436,570  5,820,132
----------------------------------------------------------------------------
                                                 ppm       21,023     50,217
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Llamara Heap Leach Project Resource
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                                    Four mixed fertilizers (4MF)
                                             statistics              SPN
----------------------------------------------------------------------------
                                              NaNO3     Total 4MF    K2SO4 +
Resource Category                 MgCl2 (t)      (t)  Product (t)  NaNO3 (t)
----------------------------------------------------------------------------
Inferred                            645,942  143,665    8,376,751  2,241,737
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                                      5,794    1,289       75,143     20,109
----------------------------------------------------------------------------
Exploration. Potential              503,337  643,185    9,403,223  3,079,755
----------------------------------------------------------------------------
                                      4,343    5,549       81,132     26,572
----------------------------------------------------------------------------

Gordon Miller, President and Chief Executive Officer of GDR and PDI, commented that "we are very excited about the results to date from our work on the LHLP Project and believe that it represents a significant new world-class potash discovery. The projected low capital costs associated with the LHLP Project as compared to many other potash developments is a major advantage in the existing financial climate. We look forward to further advancing the LHLP Project to a feasibility stage as soon as possible."

Mineral resources are not mineral reserves and do not have demonstrated economic viability. The PEA is preliminary in nature, as it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. The upside case for the LHLP Project is not included in the PDI Report as it is not compliant with NI 43-101.

Mr John Alan Gould, B.Sc., B.Sc. (Hons), Pr.Sci.Nat., Executive Vice President for GDR, is the Qualified Person who has reviewed this news release and is responsible for the technical information reported herein, including verification of the data disclosed.

About GDR

GDR is a private Canadian company founded by former South African and Canadian mining executives. Our vision is to establish a geographically diversified multi-commodity mining house focused on the acquisition and development of near term gold, uranium, base metal and industrial minerals projects in South Africa, Namibia, Zambia, Chile, Peru, Ontario and elsewhere.

For more information about GDR or PDI please visit GDR's website at http://www.golddragonresources.ca.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This news release contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws. Some of the specific forward-looking statements in this news release include statements regarding the potash, fertilizers and other key industrial minerals, our strategy and development plans, project schedules and statements regarding economic analysis of certain assets to be acquired. When used in this presentation, such statements use words, including but not limited to, "may", "will", "expect", "believe", "plan", "intend", "anticipate", "future" and other similar terminology. Our ability to develop our properties and to commence supplying potash, other fertilizers and other key minerals, any economic analysis regarding those mining properties, any statements regarding the potential for other minerals or the exploration and exploitation of other properties, and other forward-looking statements reflect management's current expectations regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the outcome of the actual results, performance or achievements of GDR or PDI to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These factors include, but are not limited to, actual future market conditions being different than anticipated by GDR's and PDI's management; material changes to government and environmental regulations affecting GDR's and PDI's operations; the ability of the Company to obtain the necessary permitting to develop the target properties or proposed marine terminal; material shifts in demographic trends. Material factors or assumptions that were applied to drawing a conclusion or making an estimate set out in the forward-looking information include, among others: the views of management of GDR and PDI regarding current and anticipated market conditions and the successful attainment of certain goals as discussed in this presentation. Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although forward-looking information contained in this presentation is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements speak only as of the date the statements are made. Readers should not put undue reliance on any forward-looking statements.

Contacts:
Gold Dragon Resources
Jim Fisher
Executive Vice President
Mobile +1 289 981 0669
[email protected]
www.golddragonresources.ca

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