Dragon Capital Corporation Updates on its Proposed Qualifying Transaction with Arehada Mining Corporation

TORONTO, Oct. 19 - Dragon Capital Corporation ("Dragon") (TSX-V:DGN.P) is pleased to provide this Press Release to its shareholders and members of the public to update shareholders and others with respect to its proposed qualifying transaction with Arehada Mining Corporation ("Arehada"), a private mining and exploration company operating in Inner Mongolia, China, which was previously announced on July 4, 2006.

As a result of the complex nature of the proposed transaction and the extensive financial and other due diligence required, Dragon has requested a further extension with the TSX Venture Exchange to the deadline to file the required materials in connection with Dragon's proposed qualifying transaction. The TSX Venture Exchange has granted an extension of thirty (30) days to Dragon, expiring November 19, 2006. As a result the shares of Dragon will remain halted.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

A press release with further particulars relating to the proposed transaction will follow in accordance with the policies of the Exchange.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

For further information:

Mr. Barry M. Polisuk
Director
Dragon Capital Corporation
Tel: (416) 869-1234

Mr. Oliver Xing
Technical Consultant to Dragon Capital Corporation
Tel: (416) 510-2991

Neither the TSXV or the TSX has in any way passed upon the merits of this press release and has neither approved nor disapproved the contents of this press release.