Asian Dragon Group Inc., Finalizes Agreement to Acquire Interest in China Gold Producer, Lingbao Jinshan Gold Mine Confirming Focus on Earnings and Share Value



    LUOYANG, CHINA, January 31 /CNW/ - The Board of Asian Dragon Group Inc.,
(OTCBB:AADG) (FWB:P2J1) (WKN:A0KE7Z) is pleased to announce the execution of a
Formal Letter of Intent to acquire an interest in the Lingbao Jinshan Gold
Mine, formerly known as the Lingbao Yishishan Gold Mine. The focus on
immediate gold production complements the development of Project Luogold in
Luoning County, less than 100 km away. The terms of the Joint Venture
Agreement outlined in the Formal Letter of Intent see Asian Dragon investing
up to US$3 million in 2 phases over 3 years, to expand the mine operations and
earn a 70% interest.

    The Lingbao Jinshan Gold Mine consists of a non-exploited, formerly
state-owned (Lingbao Gold Bureau) and now privatized medium size gold mine
with fully equipped mining infrastructure including rail facilities for main
haulage and subordinate machinery for secondary haulage. The property is
approximately 18 km2 with gold mining operations on the Eastern and Western
regions. The operations of the Lingbao Jinshan Gold Mine were shut down in
2001, due to the long term effects of low gold prices. Through the completion
of a restructure in late 2005, new management has since reopened the Western
Regional operations, where the labour force has increased over 550% since its
initial restart. Transfer stations installed at the numerous mine levels on
the massive quartz-carbonate veins currently produce and mill approximately
150,000 tonnes of high grade ore per year from the Western Regional
operations, which will double to 300,000 tonnes, once Asian Dragon reopens the
Eastern Regional operations. The amount of ore produced and milled can easily
be increased to 700,000 tonnes per year. With grades of veins ranging from
7.09 to 13.61 g/t, the average grade of the whole mine is 11.33 g/t Au, the
acquisition will provide Asian Dragon with immediate earnings and increased
share value.

    The Lingbao Jinshan Gold Mine is situated in the same county of Henan
Province where Hong Kong listed Lingbao Gold Company Ltd. (52 Week High $1B+
US market cap) has 2 operating gold mines, 1 gold mine under construction, and
several advanced exploration projects. As of October 2005, Henan Province
ranked second only to Shandong Province in percentage of gold production in
China.

    About Asian Dragon

    Asian Dragon was established to focus on China's explosive precious
metals reserves and markets and to become one of China's largest foreign gold
and precious metals producers through a series of joint ventures and mine and
property acquisitions.

    Long standing relationships with the Gold Bureau have provided Asian
Dragon with the exclusive opportunity to commence due-diligence on several
advanced Chinese Gold Mining Projects in one of the Country's most well-known
and prolific mineral production regions, the Xiaoqinling Region.

    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, certain delays
beyond the company's control with respect to market acceptance of new
technologies or products, delays in testing and evaluation of products, and
other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission.




For further information:

For further information: Asian Dragon Group Inc. Investor Relations:
Badshah Communications Group Ltd., 866-857-7522

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ASIAN DRAGON GROUP INC.

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