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Silver Dragon Resources Inc.
200 Davenport Road
Toronto, Ontario M5R 1J2
Canada

Phone: 416-223-8500
Toll Free(North America): 1-866-512-SDRG (7374)
Fax: 416-223-8507
info@silverdragonresources.com

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News Release

Silver Dragon Issues Advisory to Shareholders

TORONTO, December 14, 2010 (PRIME NEWSWIRE) -- Silver Dragon Resources Inc. (OTCBB:SDRG) wishes to advise its shareholders on a matter regarding statements being circulated to shareholders by a party claiming to represent a minority shareholder group.

On December 9, 2010 shareholders began receiving a notice, which contained two items.  The first item was a copy of a legal proceeding filed in Langfang District court, China and the second item was a letter making certain allegations regarding the Company and its management.

The Langfang proceeding was disclosed in the Company’s latest quarterly filing.  The complaint, filed by two shareholders, seeks to invalidate the Company’s sale in 2008 of 50% of Sanhe Sino-Top Resources & Technologies, Ltd.  After consulting with Chinese legal counsel, the Company believes that the Langfang proceeding has been filed in an improper jurisdiction and is, in any event, frivolous and wholly without merit.  The sale in question was made to a Chinese government-owned entity, after the receipt of approval by the Ministry of Commerce in China.  The second item was a letter purporting to be written by a “Minority Shareholder Committee”, which the letter identifies as consisting of over 50 individual shareholders of the Company resident in China, Taiwan and Hong Kong who invested in the Company in 2006.  The letter claims that the Committee initiated the Langfang proceeding.  The letter presents, on behalf of the Committee and a Ms. Fanny Chan as its “representative”, allegations that the Company and its management have engaged in various improper and illegal activities since 2005.  The allegations made in the letter are similar to allegations that have been repeatedly made and published by an individual named Fanny Chan over the past three years.  The Company, on several occasions, through its legal counsel in several countries, has asked Ms. Chan to cease and desist.  On August 11, 2010 the Company’s Hong Kong counsel sent a final request letter to cease and desist and to comply with certain demands.  A copy of the letter can be viewed by clicking here (http://orders.newsfilecorp.com/files/1062/866_863_letter.pdf). Ms. Chan has not complied with the demands.

The Company wishes to advise its shareholders that the allegations made by Ms. Chan and the “Minority Shareholder Committee” are false and unsubstantiated.  The Company believes that the continuous pursuance of such allegations and publication of libelous statements with respect to the Company and its management are malicious and calculated to defame and discredit the Company and its management, as well as to damage their reputation.

The Company is pursuing a legal remedy and will prosecute to the fullest extent of the law(s). 

About Silver Dragon Resources Inc.
Silver Dragon Resources Inc. is a mining and metals company focused on the exploration, acquisition, development and operation of silver mines in proven silver districts globally. Silver Dragon's objective is to acquire silver mining assets that contain promising exploration targets, have highly leveraged, out-of-the-money silver deposits, and/or are producing properties with significant untapped exploration potential. It is management's objective to grow Silver Dragon into a significant silver producer by developing the Cerros las Minitas project in Mexico, its six Sino-Top properties in China (particularly Dadi and Laopandao), and its Erbahuo Silver mine (via its Chifeng Silver Dragon subsidiary), also in China. For more information, please visit the Company's website at: www.silverdragonresources.com (now available in Chinese).

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: general economic conditions and financial markets, changes in market prices of silver and other metals, technological and operational risks, and other risks set out in the Company's most recent Form 10-K available at www.sec.gov/edgar.shtml.

Contact 

Silver Dragon Resources Inc.
Marc Hazout, President or Alessandro Motta, Investor Relations
(416) 223-8500 or Toll Free: 1-866-512- SDRG (7374)
Email: info@silverdragonresources.com

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Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission (SEC) limits disclosure for U.S. reporting purposes to mineral deposits that a company can economically or legally extract or produce. We may use certain terms on this website such as "reserves," "resources," "geologic resources," "proven," "probable," "measured," "indicated" or "inferred," which may not be consistent with the reserve definitions established by the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K. You can review and obtain copies of the latest Form 10-K filing from the SEC's website at http://www.sec.gov/edgar.shtml.