Document:

Silver Dragon Resources, Inc. - Exhibit 4.4 - Prepared By TNT Filings
Inc.

 

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO SILVER DRAGON RESOURCES, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED. 

	 	Right to Purchase
    1,000,000 shares of Common Stock of Silver Dragon
    Resources, Inc. (subject to adjustment as provided herein)

CLASS C COMMON STOCK PURCHASE WARRANT 

	No.
    2006-C-001	Issue
    Date: November 2, 2006

SILVER DRAGON RESOURCES, INC., a corporation
organized under the laws of the State of Delaware (the "Company"), hereby
certifies that, for value received, ALPHA CAPITAL ANSTALT, Pradafant 7, 9490
Furstentums, Vaduz, Lichtenstein, Fax: 011-42-32323196, or its assigns (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company at any time after the Issue Date until 5:00 p.m., E.S.T on the first
anniversary of such date (the "Expiration Date"), 1,000,000 fully paid and
nonassessable shares of Common Stock at a per share purchase price of $1.00. The
aforedescribed purchase price per share, as adjusted from time to time as herein
provided, is referred to herein as the "Purchase Price." The number and
character of such shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein. The Company may reduce the Purchase Price without
the consent of the Holder. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Subscription Agreement
(the "Subscription Agreement"), dated November 2, 2006, entered into by
the Company and Holders. 

As used herein the following terms, unless the
context otherwise requires, have the following respective meanings: 

(a) The term "Company" shall mean Silver Dragon
Resources, Inc. and any corporation which shall succeed or assume the
obligations of Silver Dragon Resources, Inc. hereunder. 

(b) The term "Common Stock" includes (a) the
Company’s common stock, $0.0001 par value per share, as authorized on the date
of the Subscription Agreement, and (b) any Other Securities into which or for
which any of the securities described in (a) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise. 

(c) The term "Other Securities" refers to any stock
(other than Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the holder of the Warrant at any time
shall be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 or otherwise. 

(d) The term "Warrant Shares" shall mean the Common
Stock issuable upon exercise of this Warrant. 

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1.     Exercise of Warrant. 

1.1.     Number of Shares
Issuable upon Exercise. From and after the Issue Date through and including
the Expiration Date, the Holder hereof shall be entitled to receive, upon
exercise of this Warrant in whole in accordance with the terms of subsection 1.2
or upon exercise of this Warrant in part in accordance with subsection 1.3,
Common Stock of the Company, subject to adjustment pursuant to Section 4. 

1.2.     Full Exercise.
This Warrant may be exercised in full by the Holder hereof by delivery of an
original or facsimile copy of the form of subscription attached as Exhibit A
hereto (the "Subscription Form") duly executed by such Holder and surrender of
the original Warrant within three (3) days of exercise, to the Company at its
principal office or at the office of its Warrant Agent (as provided
hereinafter), accompanied by payment, in cash, wire transfer or by certified or
official bank check payable to the order of the Company, in the amount obtained
by multiplying the number of shares of Common Stock for which this Warrant is
then exercisable by the Purchase Price then in effect. 

1.3.     Partial Exercise.
This Warrant may be exercised in part (but not for a fractional share) by
surrender of this Warrant in the manner and at the place provided in subsection
1.2 except that the amount payable by the Holder on such partial exercise shall
be the amount obtained by multiplying (a) the number of whole shares of Common
Stock designated by the Holder in the Subscription Form by (b) the Purchase
Price then in effect. On any such partial exercise, the Company, at its expense,
will forthwith issue and deliver to or upon the order of the Holder hereof a new
Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may request, the whole
number of shares of Common Stock for which such Warrant may still be exercised
for the balance of. 

1.4.     Fair Market Value.
Fair Market Value of a share of Common Stock as of a particular date (the
"Determination Date") shall mean: 

(a)     If the Company’s Common
Stock is traded on an exchange or is quoted on the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ"), National Market System,
the NASDAQ Capital Market or the American Stock Exchange, LLC, then the closing
or last sale price, respectively, reported for the last business day immediately
preceding the Determination Date; 

(b)     If the Company’s Common
Stock is not traded on an exchange or on the NASDAQ National Market System, the
NASDAQ Capital Market or the American Stock Exchange, Inc., but is traded in the
over-the-counter market, then the average of the closing bid and ask prices
reported for the last business day immediately preceding the Determination Date;

(c)     Except as provided in
clause (d) below, if the Company’s Common Stock is not publicly traded, then as
the Holder and the Company agree, or in the absence of such an agreement, by
arbitration in accordance with the rules then standing of the American
Arbitration Association, before a single arbitrator to be chosen from a panel of
persons qualified by education and training to pass on the matter to be decided;
or 

(d)     If the Determination Date
is the date of a liquidation, dissolution or winding up, or any event deemed to
be a liquidation, dissolution or winding up pursuant to the Company’s charter,
then all amounts to be payable per share to holders of the Common Stock pursuant
to the charter in the event of such liquidation, dissolution or winding up, plus
all other amounts to be payable per share in respect of the Common Stock in
liquidation under the charter, assuming for the purposes of this clause (d) that
all of the shares of Common Stock then issuable upon exercise of all of the
Warrants are outstanding at the Determination Date. 

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1.5.     Company
Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights. 

1.6.     Trustee for Warrant
Holders. In the event that a qualified bank or trust company shall have been
appointed as trustee for the Holder of the Warrants pursuant to Subsection 3.2,
such bank or trust company shall have all the powers and duties of a warrant
agent (as hereinafter described) and shall accept, in its own name for the
account of the Company or such successor person as may be entitled thereto, all
amounts otherwise payable to the Company or such successor, as the case may be,
on exercise of this Warrant pursuant to this Section 1. 

1.7.     Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that the shares of Common
Stock purchased upon exercise of this Warrant shall be deemed to be issued to
the Holder hereof as the record owner of such shares as of the close of business
on the date on which this Warrant shall have been surrendered and payment made
for such shares as aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within five (5) business days
thereafter ("Warrant Share Delivery Date"), the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise. The
Company understands that a delay in the delivery of the Warrant Shares after the
Warrant Share Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Company agrees to pay (as
liquidated damages and not as a penalty) to the Holder for late issuance of
Warrant Shares upon exercise of this Warrant the amount of $100 per business day
after the Warrant Share Delivery Date for each $10,000 of Purchase Price of
Warrant Shares for which this Warrant is exercised which are not timely
delivered. The Company shall pay any payments incurred under this Section in
immediately available funds upon demand. Furthermore, in addition to any other
remedies which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Warrant Shares by the Warrant
Share Delivery Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company whereupon the
Company and the Holder shall each be restored to their respective positions
immediately prior to the exercise of the relevant portion of this Warrant,
except that the liquidated damages described above shall be payable through the
date notice of revocation or rescission is given to the Company. 

1.8     Buy-In. In
addition to any other rights available to the Holder, if the Company fails to
deliver to a Holder the Warrant Shares as required pursuant to this Warrant,
within six (6) business days after the Warrant Share Delivery Date and the
Holder or a broker on the Holder’s behalf, purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a
sale by such Holder of the Warrant Shares which the Holder was entitled to
receive from the Company (a "Buy-In"), then the Company shall pay in cash
to the Holder (in addition to any remedies available to or elected by the
Holder) the amount by which (A) the Holder's total purchase price (including
brokerage commissions, if any) for the shares of common stock so purchased
exceeds (B) the aggregate Purchase Price of the Warrant Shares required to have
been delivered together with interest thereon at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a penalty). For
example, if a Holder purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price of
Warrant Shares to have been received upon exercise of this Warrant, the Company
shall be required to pay the Holder $1,000, plus interest. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In. 

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2.     Cashless Exercise. 

(a)     Except as described
below, if a Registration Statement (as defined in the Subscription Agreement)
("Registration Statement") is effective and the Holder may sell its shares of
Common Stock upon exercise hereof pursuant to the Registration Statement, this
Warrant may be exercisable in whole or in part for cash only as set forth in
Section 1 above. If no such Registration Statement is available during the time
that such Registration Statement is required to be effective pursuant to the
terms of the Subscription Agreement, then commencing one (1) year after the
Issue Date, payment upon exercise may be made at the option of the Holder either
in (i) cash, equal to the applicable aggregate Purchase Price, (ii) by cashless
exercise in accordance with Section (b) below or (iii) by a combination of any
of the foregoing methods, for the number of shares of Common Stock specified in
such form (as such exercise number shall be adjusted to reflect any adjustment
in the total number of shares of Common Stock issuable to the Holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the
number of duly authorized, validly issued, fully-paid and non-assessable shares
of Common Stock (or Other Securities) determined as provided herein. 

(b)     If the Fair Market Value
of one share of Common Stock is greater than the Purchase Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant for cash,
the Holder may elect to receive shares equal to the value (as determined below)
of this Warrant (or the portion thereof being cancelled) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Subscription Form in which event the Company shall issue to the Holder
a number of shares of Common Stock computed using the following formula: 

  
  	X=Y (A-B)
	   
      A

  

Where X= the number of shares of
Common Stock to be issued to the holder 

Y= the number of shares of Common
Stock purchasable under the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being exercised (at the date of such
calculation) 

A= the average of the closing sale
prices of the Common Stock for the five (5) Trading Days immediately prior to
(but not including) the Exercise Date 

B= Purchase Price (as adjusted to the date of such
calculation) 

(c) The Holder may employ the cashless exercise
feature described in Section (b) above only during the pendency of a
Non-Registration Event as described in Section 11 of the Subscription Agreement.

For purposes of Rule 144 promulgated under the 1933
Act, it is intended, understood and acknowledged that the Warrant Shares issued
in a cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement. 

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3.     Adjustment for Reorganization, Consolidation,
Merger, etc. 

3.1.     Reorganization,
Consolidation, Merger, etc. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, as a condition to the
consummation of such a transaction, proper and adequate provision shall be made
by the Company whereby the Holder of this Warrant, on the exercise hereof as
provided in Section 1, at any time after the consummation of such
reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4. 

3.2.     Dissolution. In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable in
accordance with Section 3.1 by the Holder upon their exercise after the
effective date of such dissolution pursuant to this Section 3 to a bank or trust
company (a "Trustee") having its principal office in New York, NY, as trustee
for the Holder. 

3.3.     Continuation of Terms.
Upon any reorganization, consolidation, merger or transfer (and any dissolution
following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable to
the Other Securities and property receivable on the exercise of this Warrant
after the consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may be,
and shall be binding upon the issuer of any Other Securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 3, then only in such
event will the Company’s securities and property (including cash, where
applicable) receivable by the Holder of the Warrants be delivered to the Trustee
as contemplated by Section 3.2. 

3.4     Share Issuance.
Until the Expiration Date, if the Company shall issue any Common Stock except
for the Excepted Issuances (as defined in the Subscription Agreement), prior to
the complete exercise of this Warrant for a consideration less than the Purchase
Price that would be in effect at the time of such issue, then, and thereafter
successively upon each such issue, the Purchase Price shall be reduced to such
other lower purchase price. For purposes of this adjustment, the issuance of any
security or debt instrument of the Company carrying the right to convert such
security or debt instrument into Common Stock or of any warrant, right or option
to purchase Common Stock shall result in an adjustment to the Purchase Price
upon the issuance of the above-described security, debt instrument, warrant,
right, or option if such issuance is at a price lower than the Purchase Price in
effect upon such issuance. The reduction of the Purchase Price described in this
Section 3.4 is subject to the provisions of, and in addition to the other rights
of the Holder described in, the Subscription Agreement. 

4.     Extraordinary Events Regarding Common Stock.
In the event that the Company shall (a) issue additional shares of the Common
Stock as a dividend or other distribution on outstanding Common Stock, (b)
subdivide its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common Stock,
then, in each such event, the Purchase Price shall, simultaneously with the
happening of such event, be adjusted by multiplying the then Purchase Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall thereafter be the Purchase Price then
in effect. The Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The number of shares of Common Stock that the Holder of this
Warrant shall thereafter, on the exercise hereof as provided in Section 1, be
entitled to receive shall be adjusted to a number determined by multiplying the
number of shares of Common Stock that would otherwise (but for the provisions of
this Section 4) be issuable on such exercise by a fraction of which (a) the
numerator is the Purchase Price that would otherwise (but for the provisions of
this Section 4) be in effect, and (b) the denominator is the Purchase Price in
effect on the date of such exercise. 

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5.     Certificate as to Adjustments. In each case
of any adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
to be received upon exercise of this Warrant, in effect immediately prior to
such adjustment or readjustment and as adjusted or readjusted as provided in
this Warrant. The Company will forthwith mail a copy of each such certificate to
the Holder of the Warrant and any Warrant Agent of the Company (appointed
pursuant to Section 11 hereof). 

6.     Reservation of Stock, etc. Issuable on Exercise
of Warrant; Financial Statements. The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock from time to time issuable on the exercise
of the Warrant. This Warrant entitles the Holder hereof to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Company’s Common Stock. 

7.     Assignment; Exchange of Warrant. Subject to
compliance with applicable securities laws, this Warrant, and the rights
evidenced hereby, may be transferred by any registered holder hereof (a
"Transferor"). On the surrender for exchange of this Warrant, with the
Transferor’s endorsement in the form of Exhibit B attached hereto (the
"Transferor Endorsement Form") and together with an opinion of counsel
reasonably satisfactory to the Company that the transfer of this Warrant will be
in compliance with applicable securities laws, the Company at its expense,
twice, only, but with payment by the Transferor of any applicable transfer
taxes, will issue and deliver to or on the order of the Transferor thereof a new
Warrant or Warrants of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor. No such transfers shall result in a public
distribution of the Warrant. 

8.     Replacement of Warrant. On receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, on surrender and cancellation of this Warrant, the Company at
its expense, twice only, will execute and deliver, in lieu thereof, a new
Warrant of like tenor. 

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9.     Registration Rights. The Holder of this
Warrant has been granted certain registration rights by the Company. These
registration rights are set forth in the Subscription Agreement. The terms of
the Subscription Agreement are incorporated herein by this reference. 

10.     Maximum Exercise. The Holder shall not be
entitled to exercise this Warrant on an exercise date nor may the Company
exercise its right to give a Call Notice (as defined in Section 11) in
connection with that number of Common Stock which would be in excess of the sum
of (i) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates on an exercise date or Call Date, and (ii) the number of Common
Stock issuable upon the exercise of this Warrant with respect to which the
determination of this limitation is being made on an exercise date or Call Date,
which would result in beneficial ownership by the Holder and its affiliates of
more than 4.99% of the outstanding Common Stock on such date. For the purposes
of the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
shall not be limited to aggregate exercises which would result in the issuance
of more than 4.99%. The restriction described in this paragraph may be waived,
in whole or in part, upon sixty-one (61) days prior written notice from the
Holder to the Company. The Holder may allocate which of the equity of the
Company deemed beneficially owned by the Subscriber shall be included in the
4.99% amount described above and which shall be allocated to the excess above
4.99% provided such allocations are consistent with applicable law. 

11.     Call. The Company shall have the option to
"call" the exercise of the shares issuable upon exercise of this Warrant (the
"Warrant Call") in accordance with and governed by the following: 

(a)     The
Company shall exercise the Warrant Call by giving to the Warrant Holder a
written notice of call (the "Call Notice") during the period in which the
Warrant Call may be exercised. The effective date of each Call Notice (the "Call
Date") is the date on which notice is effective under the notice provision of
Section 14 of this Warrant. 

(b)     The Company's right to
exercise the Warrant Call shall commence thirty trading days after the actual
effective date of a Registration Statement described in Section 11.1(iv) of the
Subscription Agreement and end thirty trading days prior to the Expiration Date.

(c)     The number of shares of
Common Stock to be issued upon exercise of the Warrant which are subject to a
Call Notice must be registered in a Registration Statement effective from twenty
(20) trading days prior to the Call Date and through the date such Common Stock
is actually delivered to the Warrant Holder ("Delivery Date"). 

(d)     A Call Notice may be
given not sooner than fifteen trading days after the prior Call Date. 

(e)     A Call Notice may be
given by the Company in connection with shares of Common Stock issuable upon
exercise of the Warrant only within ten days after the Common Stock has had a
volume weighted average using the AQR function for the Principal Market ("VWAP")
(as defined in the Subscription Agreement) of not less than 150% of the Purchase
Price for ten (10) consecutive trading days ("Lookback Period"), and average
daily trading volume during the Lookback Period of not less than 100,000 shares
of Common Stock. 

(f)     The Common Stock must be
listed on the Principal Market for the Lookback Period and through the Delivery
Date. 

(g)     The
Company shall not have received a notice from the Principal Market during the
ninety calendar days prior to the Call Date that the Company or its Common Stock
does not meet the requirements for continued quotation, listing or trading on
the Principal Market. 

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(h)     The Company and the
Common Stock shall meet the requirements for continued quotation, listing or
trading on the Principal Market for the Lookback Period and through the Delivery
Date. 

(i)     Unless otherwise agreed
to by the Holder of this Warrant, a Call Notice must be given to all Warrant
Holders who receive Warrants similar to this Warrant (in terms of exercise price
and other principal terms) issued on or about the same Issue Date as this
Warrant, in proportion to the amounts of Common Stock which may be purchased by
the respective Warrant Holders in accordance with the respective Warrants held
by each. 

(j)     The Warrant Holder shall
exercise his Warrant rights and purchase the Called Warrant Shares and pay for
same within five trading days after the Call Date. If the Warrant Holder fails
to timely pay the amount required by the Warrant Call, the Company’s sole remedy
shall be to cancel a corresponding amount of this Warrant. 

(k)     The Company may not
exercise the right to Call this Warrant after the occurrence of a default by the
Company of a material term of this Warrant or the Subscription Agreement or the
Notes referred to in the Subscription Agreement. 

12.     Warrant Agent. The Company may, by written
notice to the Holder of the Warrant, appoint an agent (a "Warrant Agent") for
the purpose of issuing Common Stock on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and replacing this
Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent. 

13.     Transfer on the Company’s Books. Until
this Warrant is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary. 

14.     Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other
communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur or (c) three business days after deposited in the mail if
delivered pursuant to subsection (ii) above. The addresses for such
communications shall be: (i) if to the Company to: Silver Dragon Resources,
Inc., 1121 Steeles Avenue West, Suite 803, Toronto, Ontario M2R 3W7, Attn: Marc
M. Hazout, President and CEO, telecopier: (416) 661-9510, with a copy by
telecopier only to: Garfin Zeidenberg LLP, Yonge-Norton Center, 5255 Yonge
Street, Suite 800, Toronto, Ontario, Canada M2N 6P4, Attn: Stephen M. Cohen,
B.A., LL.B., telecopier number: (416) 512-9992, and (ii) if to the Holder, to
the addresses and telecopier number set forth in the first paragraph of this
Warrant, with an additional copy by telecopier only to: Grushko & Mittman, P.C.,
551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier number: (212)
697-3575. 

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14.     Miscellaneous. This Warrant and any term
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Warrant shall be construed and enforced
in accordance with and governed by the laws of New York. Any dispute relating to
this Warrant shall be adjudicated in New York County in the State of New York.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision. 

IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above. 

	 	SILVER DRAGON
    RESOURCES, INC.
	 	 
	 	 
	 	 
	 	By:
    ___________________________
	 	Name:
	 	Title:

Witness: 

________________

9

Exhibit A 

FORM OF SUBSCRIPTION 

(to be signed only on exercise of Warrant) 

TO: Silver Dragon Resources, Inc. 

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box): 

___ ________ shares of the Common Stock covered by such Warrant; or 

___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2. 

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
___ $__________ in lawful money of the United States; and/or 

___ the cancellation of the Warrant to the extent necessary,
in accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2. 

The undersigned requests that the certificates for such shares be issued in
the name of, and delivered to
_____________________________________________________ whose address is
_____________________________________________________________________________________
_____________________________________________________________________________________
Number of Shares of Common Stock Beneficially Owned on the date of exercise:
Less than five percent (5%) of the outstanding Common Stock of Silver Dragon
Resources, Inc. 

The undersigned represents and warrants that the
representations and warranties in Section 4 of the Subscription Agreement (as
defined in this Warrant) are true and accurate with respect to the undersigned
on the date hereof. 

The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable upon exercise of the within
Warrant shall be made pursuant to registration of the Common Stock under the
Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an
exemption from registration under the Securities Act. 

	
    Dated:______________________	 
	 	
    (Signature must conform to name of
    holder as
	 	specified on the face
    of the Warrant)
	 	 
	 	 
	 	 
	 	
    (Address)

10

Exhibit B 

FORM OF TRANSFEROR ENDORSEMENT 

(To be signed only on transfer of Warrant) 

For value received, the undersigned
hereby sells, assigns, and transfers unto the person(s) named below under the
heading "Transferees" the right represented by the within Warrant to purchase
the percentage and number of shares of Common Stock of Silver Dragon Resources,
Inc. to which the within Warrant relates specified under the headings
"Percentage Transferred" and "Number Transferred," respectively, opposite the
name(s) of such person(s) and appoints each such person Attorney to transfer its
respective right on the books of Silver Dragon Resources, Inc. with full power
of substitution in the premises. 

	
    
    Transferees
	
    
    Percentage Transferred
	
    
    Number Transferred

	
     
	
     
	
     

	
     
	
     
	
     

 

	Dated:
    ______________,___________	 
	 	(Signature must
    conform to name of holder as specified
	 	on the face of the
    warrant)
	 	 
	Signed in the presence
    of:	 
	 	 
	_________________________	_________________________
	(Name)	_________________________
	 	(address)
	 	 
	ACCEPTED AND AGREED:	_________________________
	[TRANSFEREE]	_________________________
	 	(address)
	 	 
	_________________________	 
	(Name)Silver Dragon Resources Inc.: Exhibit 10.1 - Prepared by TNT Filings Inc.

SILVER DRAGON RESOURCES
INC. 

1121 Steeles Avenue West 

Suite 803 

Toronto, Ontario, Canada 

M2R 3W7 

Tel: (416)661-4989 

Via Fax No (902) 491-4281 

August 4, 2006 

Linear Gold Corp. 

2000 Barrington Street 

Suite 701, Cogswell Tower 

Halifax, Nova Scotia B3J 3K1 

Attention:  Mr. Brian MacEachen - 

                   
Chief Financial Officer 

Re:     Silver Dragon
Resources Inc. Joint Venture with Linear Gold Corp.

Dear Brian: 

This letter shall constitute notice pursuant
to Section 6.1 of the Joint Venture Agreement dated September 7, 2005 between
Silver Dragon Resources Inc. and Linear Gold Corp. that Silver Dragon does not
wish to continue with the exploration of the Property as defined in the Joint
Venture Agreement. 

We wish you and Linear Gold Corp. success in
your endeavors. 

SILVER DRAGON RESOURCES INC. 

Per: ________________________ 

        Marc Hazout - 

        President 

Copy:      COX HANSON O'REILLY
MATHESON 

               
1100 Purdy's Wharf Tower One 

               
1959 Upper Water Street 

               
Halifax, Nova Scotia, Canada 

               
Attn: Daniel Gallivan 

               
Fax: (902) 421-3130 

Copy:      Garfin Zeidenberg LLP 

               
Barristers & Solicitors 

               
5255 Yonge Street 

               
Suite 800 

               
Toronto, Ontario, M2N 6P4 

               
Attn: Stephen M. Cohen 

               
Fax: (416) 512-9992

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