Asian Dragon Group Inc., Increases Concentration Mill Production to 150 Tons Per Day and Executes Formal Letter of Intent to Take over Loning Gold Mine.

LUOYANG, China -- Asian Dragon Group Inc., (OTCBB: AADG) (FWB: P2J1) (WKN: A0KE7Z) is pleased to provide the following update:

In order to facilitate planned future expansion, Asian Dragon has successfully completed the next stage of upgrades to the Jinjishan Gold Mine concentration mill and to the administration buildings and surrounding surface property (collectively the 'Luogold Mill'). Local Chinese ore processing experts were contracted to completely rebuild and fully overhaul the entire processing facility. Currently ore from five local mines including Jinjishan is now being processed. The Luogold Mill can now operate at a maximum capacity processing rate of 150 t/d of ore with the resulting concentrate fed to a secondary flotation-cyanidation plant with a processing capacity of 20 t/d. Further expansion plans will enable the Luogold Mill to process up to 500 t/d of the area's high-grade ore.

Several additional recommendations have been provided by Mr. Christian Derosier, P.Geo, President of CDGC Inc., a world-renowned geology and mining company and Asian Dragon's recently appointed independent qualified person, to significantly ramp up both the cyanidation facilities and its daily milling capacity to meet planned production increases over the next few months for Project Luogold. The Luogold Mill is easily accessible, located 70 meters from the paved highway that runs adjacent to the Jinjishan Gold Mine. The central location of the Luogold Mill will allow it to be the headquarters for the Administration of Project Luogold and will also enable ore from the Shizhaigou Gold Mine and other local mines to be transported for processing.

Asian Dragon is also pleased to announce the execution of a Formal Letter of Intent, setting out the terms for the take-over of the Loning Gold Mine. The terms of the Joint Venture Agreement outlined in the Formal Letter of Intent see Asian Dragon investing up to US $2 million over a 2-year period to further explore and initiate mine operations and earn 70% of the Joint Venture. The Loning Gold Mine (LNG) property is located 2 km Southwest of Asian Dragon's Jinjishan Gold Mine with easy access via the paved highway that runs East/West of the North side of Luoning County. The property consists of a 9.1 km2 Exploration Lease that is located immediately southwest of the Administration Headquarters of Project Luogold at the Luogold Mill.

LNG is the third joint venture agreement designed to secure key strategic gold properties lying on the north side of Luoning County. Asian Dragon has already prepared work programs in order to confirm the rich mineralized ore bodies that the Chinese Gold Bureau has estimated. These estimates reveal potential multi-million-ounce gold reserves as well as residual ore rich in silver, copper and lead.

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.

Key relationships in China are enabling Asian Dragon to capture business opportunities as the Chinese Government continues to privatize many of their industries, enabling local and foreign investment to fill the void left by the Government ministries. Asian Dragon takes advantage of an identified niche opportunity in the Gold Mining Industry of China, where the Chinese Government has withdrawn the military from Gold Mining and set up the Gold Bureau to continue Gold Mining on an international scale.

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, where hundreds of small and dozens of medium to large mines are actively mining gold and various other precious metals and minerals. Earlier companies which acquired smaller advanced mining projects have since proven out positively and have succeeded in turning themselves into billion dollar market-cap opportunities. Two recent examples are Hong Kong-listed Lingbao Gold Co. and Toronto Stock Exchange-listed Silvercorp Metal Inc. both of which have major projects in 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.