Mr. Hazout: Silver Dragon Resources was originally formed as a vehicle for equity investors that are looking to capture the upside in silver. The company began in 2005 to vend in silver assets, both in China and Mexico. The Chinese have been driving the demand for silver for the last decade and are currently looking to backdoor resources outside of China, including exporting their own silver assets, and they're using Silver Dragon as a vehicle. Mexico is the number one silver producer in the world, and China is the number one silver consumer in the world. Therefore, our objective is to develop these properties with the world's leading producer of silver on the one hand, and the world's major consumer on the other.
TWST: What is the silver production industry today in China? What are the risks
and some of the advantages?
Mr. Hazout: For the first time, in September 2008, China became a net importer
of silver as opposed to a net exporter of silver. Historically, China produced
enough silver to feed its own internal demand, but from what we understand,
there's approximately 24,000 tons of silver reserve that remains in China. That
country is now consuming 4,000 tons per year, so in the next several years,
China will be running out of silver. So they have to develop and explore the
properties and produce silver in their own backyards, and of course look at and
identify outside sources to fill that demand. Their smelters are starving for
concentrates and the idea is to ship concentrates or dore bars from our
production in Mexico to the smelters in China.
Tickers included in this excerpt: SDRG
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