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News Release

Silver Dragon Resources Inc. Closes $1 Million Private Placement

Toronto, Ontario - (BUSINESS WIRE) – Monday December 21, 2009 - Silver Dragon Resources Inc. (OTC BB: SDRG.OB - News) is pleased to announce it has closed a private placement consisting of 3,739,198 units (the "Units") in the Company at a price of US$.28 per Unit, for gross proceeds of US$1,046,976. Each Unit is comprised of one restricted common share and one common share purchase warrant. Each warrant entitles the Unit holder to purchase one common share (the "Warrant Shares") of the Company at an exercise price of US$.50 per Warrant Share at any time within one year from the date of issuance.

The Company plans to use proceeds from the financing to: (i) continue development of the Cerro las Minitas silver project in Durango, Mexico; (ii) continue the exploration, development and resource conversion program presently under way at the Erbahuo silver properties in China; and (iii) for general corporate purposes.

About Silver Dragon Resources Inc.

Silver Dragon Resources Inc. (OTC:SDRG) is a mining company focused on the acquisition, exploration, development, and operation of silver mines in proven silver districts in China and Mexico. Silver Dragon's objective is to acquire silver mining assets that contain promising exploration targets and/or producing properties with significant untapped exploration potential. It is management's objective to grow Silver Dragon into a significant silver producer by developing Cerros las Minitas in Mexico and the nine Erbahuo properties in China. With operations in Mexico, the world's leading silver producer, and China, the largest silver consumer, Silver Dragon is prepared to participate in China's increasing demand for silver. For more information, please visit the Company's website at: http://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, such as statements regarding the exploration and development of the Cerros las Minitas Silver Project, outcome and timing for the completion of further assays and metal amounts in partial assay results as well as production expectations are forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur. Information inferred from the interpretation of assay results and information concerning mineralization zones may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. Forward-looking statements 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 future assay results, delays in testing and evaluation of assays, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

Contact Silver Dragon Resources Inc.

Marc Hazout
President
(416) 223-8500 or Toll Free: 1-866-512- SDRG (7374)
Email: info@silverdragonresources.com