VENTURE AGREEMENT

VENTURE AGREEMENT

This VENTURE AGREEMENT (this "Agreement") is entered into as of April 14, 2005 (the "Effective Date") by and between SILVER DRAGON RESOURCES INC. , a Delaware corporation ("Silver Dragon "), and SINO SILVER CORP ., a Nevada corporation ("Sino").

WHEREAS , Sino owns a 60% interest in Sanhe Sino-Top Resources and Technologies, Ltd. ("Sino-Top") pursuant to the terms of a Joint Venture Contract dated January 27, 2005 among Sino and other holders of equity interests in Sino-Top (the "Sino-Top Joint Venture Contract");

WHEREAS , Sino-Top owns certain exploratory and licensing rights with respect to certain mining properties located in The People's Republic of China, including the real property described in Exhibit A (the "Property"); and

WHEREAS , Silver Dragon desires to assist in the financing of the exploration and, as applicable, development of the Property, and share in the revenues, if any, derived from the Property on the terms set forth in this Agreement.

NOW, THEREFORE , in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

CONSIDERATION

1. 1. Payments by Silver Dragon . Silver Dragon shall pay to Sino the sum of $350,000, payable as follows: (a) $150,000 payable on the Effective Date; (b) $100,000 payable on the first anniversary of the Effective Date; and (c) $100,000 payable on the second anniversary of the Effective Date, with payments under (b) and (c) subject to the conditions set forth in Article V.
   2. Issuance of Stock by Silver Dragon . Silver Dragon shall issue to Sino 500,000 shares of common stock of Silver Dragon (the "Silver Dragon Shares") as follows: (a) 250,000 shares shall be issued on the Effective Date; and (b) 250,000 shares shall be issued on the first anniversary of the Effective Date.
   3. Payments by Sino .
   4. 1. Sino shall pay to Silver Dragon (the " Silver Dragon Payment") a sum equal to 50% (the "Property Percentage Interest") of all distributions received by Sino from Sino-Top attributable to the Property (the "Property Distributions"). It is agreed that all Property Distributions will be received by Sino in trust as to a 50% interest for Silver Dragon. The Silver Dragon Payment will be due and payable from time to time within a reasonable period of time following Sino's receipt of the Property Distributions, not to exceed 30 days.
      2. The Property Distributions shall be deemed to include all distributions received by Sino from Sino-Top attributable to the Property, including, without limitation, distributions of current income, liquidating distributions on the sale or other disposition of Sino-Top's rights or interests in the Property or of Sino's interest in Sino-Top, and distributions in kind. The Property Distributions shall consist of gross revenues attributable to the Property less (i) expenses directly attributable to the Property other than general overhead expenses of Sino-Top ("Direct Expenses") and (ii) a pro-rata amount of the general overhead expenses of Sino-Top allocated to the Property equal to the total general overhead expenses of Sino-Top multiplied by a fraction, the numerator of which is one and the denominator of which is the total number of real properties in respect of which Sino-Top has exploratory and/or development rights ("Indirect Expenses"). Gross Revenues attributable to the Property less Direct Expenses and Indirect Expenses are hereinafter referred to as "Profits". Sino-Top currently has exploratory and/or development rights on four properties, including the Property, with an option to acquire such rights on seven additional properties. The determination of whether distributions received by Sino from Sino-Top are "attributable" to the Property, and whether revenues, expenses and liabilities are "attributable" to the Property, shall be made by Sino, acting reasonably and in good faith, based on the books and records of Sino-Top, subject to the provisions of Section 4.1.
      3. The Property Distributions shall not be deemed to include distributions attributable to any property in respect of which Sino-Top or Sino has any rights or interests other than the Property. Sino makes no representations whatsoever as to the amount of the Property Distributions that can be expected to be received by Sino or the amount of the Silver Dragon Payment that can be expected to be received by Silver Dragon.
      4. As controlling shareholder of Sino-Top, Sino shall ensure that 60% of all Profits shall be distributed from Sino-Top to Sino as Property Distributions and not be retained by Sino-Top for corporate or other purposes. Thereafter, in accordance with the terms in Article 1.3(a) above, Sino shall distribute Silver Dragon Payments to Silver Dragon. Notwithstanding the aforementioned Sino shall not be required to receive its share of the Property Distributions, so long as Silver Dragon receives its Property Percentage Interest of the Property Distributions, as set forth herein.
2.  

REPRESENTATIONS AND WARRANTIES OF SINO

As a material inducement to Silver Dragon to enter into this Agreement, Sino represents and warrants to Silver Dragon, as of the Effective Date, as follows:

2. 1. Corporate Status . Sino is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has the requisite power and authority to own or lease its properties and to carry on its business as now being conducted.
   2. Power and Authority . Sino has the power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Sino has taken all corporate action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation by it of the transactions contemplated hereby.
   3. Enforceability . This Agreement has been duly executed and delivered by Sino and constitutes a legal, valid and binding obligation of Sino, enforceable against Sino in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity.
   4. No Violation . The execution and delivery of this Agreement by Sino, the performance by Sino of its obligations hereunder and the consummation by Sino of the transactions contemplated by this Agreement will not (a) contravene any provision of the articles of incorporation or bylaws of Sino, (b) violate or conflict with any law, statute, ordinance, rule, regulation, decree, writ, injunction, judgment or order of any governmental authority or of any arbitration award that is applicable to, binding upon or enforceable against Sino, (c) conflict with, result in any breach of, or constitute a default (or an event that would, with the passage of time or the giving of notice or both, constitute a default) under, or give rise to a right to terminate, amend, modify, abandon or accelerate, any contract or agreement that is applicable to, binding upon or enforceable against Sino, (d) result in or require the creation or imposition of any lien upon or with respect to any of the property or assets of Sino, or (e) require the consent, approval, authorization or permit of, or filing with or notification to, any governmental authority, any court or tribunal or any other person or entity, that has not been obtained, made or given as of the Effective Date.
   5. No Commissions . Sino has not incurred any obligation for any finder's or broker's or agent's fees or commissions or similar compensation in connection with the transactions contemplated by this Agreement.
   6. Ownership of Sino-Top Interest . Sino owns 60% of the equity interests of Sino-Top pursuant to the terms of the Sino-Top Joint Venture Contract.
   7. Organization of Sino-Top and Ownership of Property Rights . Sino-Top is a limited liability company organized and existing under the laws of The People's Republic of China. Sino-Top owns the exploratory and/or licensing rights and interests in the Property (and, if the Option (as defined in Section 4.2) is exercised and closes, the Additional Property (as defined in Section 4.2) that it represents it owns in the Sino-Top Joint Venture Contract).
   8. Representations Regarding Sino-Top and the Property. The execution and delivery and performance of the Agreement herein does not contravene any provision of the Sino-Top Joint Venture Contract, Sino having full, complete and unrestricted ability to assign to Silver Dragon a portion of its interest in the Sino-Top Joint Venture with respect to the Property (and, if applicable, the Additional Property as defined in Section 4.2). Sino-Top has exclusive exploratory rights with respect to the Property (and, if applicable, the Additional Property) pursuant to the laws of the Government of China, free and clear of all liens, disputes, taxes, claims and encumbrances. Sino-Top has validly renewed its exploration rights on the Property (and the Additional Property), such rights being valid up to and including January 19, 2006, and all required government permits have been validly issued and are in good standing pursuant to the laws of the Government of China. Sino does not require the consent of Sino-Top in order to enter into this Agreement.

2.9        Deliveries . Sino has provided to Silver Dragon a true and correct copy of (a) the Sino-Top Joint Venture Contract, which has been signed and delivered by all parties thereto and is in effect, (b) the Certificate of Authority issued by the competent administration of industry and commerce in The People's Republic of China reflecting that Sino has become a new shareholder of Sino-Top holding 60% of the equity interests of Sino-Top (c) the written acknowledgement of Sino-Top) that either Sino-Top or the North China Geological Bureau shall be responsible for the initial exploratory or development work on the Property (and, if the Option is exercised and closes, the Additional Property), (d) copies of the articles of incorporation and bylaws of Sino as in effect on the Effective Date, certified as of the Effective Date by the Secretary of Sino as being true, correct and complete, (e) a certificate of good standing of Sino issued by the Secretary of State of the State of its incorporation as of a date not more than ten (10) days prior to the Effective Date, and (f) a certified copy of the renewal of Sino-Top's exploration rights with respect to the Property together with a certified English translation.

2.10      Investment Representations .

2. 8. 1. Sino is a sophisticated investor and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Silver Dragon Shares and, if acquired by Sino pursuant to Section 4.2, the Additional Silver Dragon Shares (as defined in Section 4.2) (collectively, the "Shares").
      2. Sino is acquiring the Shares for its own account and not with a view toward distribution in a manner that would violate the Securities Act of 1933, as amended ("Securities Act").
      3. Sino understands that the Shares have not been registered under the Securities Act. Sino agrees that it will not sell or otherwise dispose of any of the Shares unless such sale or other disposition has been registered under the Securities Act or is exempt from registration under the Securities Act and has been registered or qualified or is exempt from registration or qualification under applicable state securities laws. Sino acknowledges that, until such time as the Shares have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 under the Securities Act ("Rule 144") without any restriction as to the number of securities as of a particular date that can then be immediately sold, the certificates evidencing the Shares may bear a restrictive legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OF SAID ACT OR UNLESS THE SECURITIES ARE OTHERWISE SOLD, TRANSFERRED OR ASSIGNED IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.

2.11      Exploration of the Property. Sino represents that, as controlling shareholder of Sino-Top, it will ensure that Sino-Top begins the exploration and evaluation of the Property as soon as reasonably possible after the Effective Date.

2.12      Disclosure . None of the foregoing representations, warranties and statements of fact contains any untrue statement of material fact or omits to state any material fact necessary to make any such representation, warranty or statement not misleading.

            REPRESENTATIONS AND WARRANTIES OF SILVER DRAGON

As a material inducement to Sino to enter into this Agreement, Silver Dragon represents and warrants to Sino, as of the Effective Date, as follows:

3. 1. Corporate Status . Silver Dragon is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite power and authority to own or lease its properties and to carry on its business as now being conducted.
   2. Power and Authority . Silver Dragon has the power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Silver Dragon has taken all corporate action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation by it of the transactions contemplated hereby.
   3. Enforceability . This Agreement has been duly executed and delivered by Silver Dragon, and constitutes the legal, valid and binding obligation of Silver Dragon, enforceable against Silver Dragon in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity.
   4. No Violation . The execution and delivery of this Agreement by Silver Dragon, the performance by Silver Dragon of its obligations hereunder and the consummation by Silver Dragon of the transactions contemplated by this Agreement will not (a) contravene any provision of the articles of incorporation or bylaws of Silver Dragon, (b) violate or conflict with any law, statute, ordinance, rule, regulation, decree, writ, injunction, judgment or order of any governmental authority or of any arbitration award that is applicable to, binding upon or enforceable against Silver Dragon, (c) conflict with, result in any breach of, or constitute a default (or an event that would, with the passage of time or the giving of notice or both, constitute a default) under, or give rise to a right to terminate, amend, modify, abandon or accelerate, any contract or agreement that is applicable to, binding upon or enforceable against Silver Dragon, (d) result in or require the creation or imposition of any lien upon or with respect to any of the property or assets of Silver Dragon, or (e) require the consent, approval, authorization or permit of, or filing with or notification to, any governmental authority, any court or tribunal or any other person or entity, that has not been obtained, made or given as of the Effective Date.
   5. No Commissions . Silver Dragon has not incurred any obligation for any finder's or broker's or agent's fees or commissions or similar compensation in connection with the transactions contemplated by this Agreement.
   6. SEC Filings . Silver Dragon has timely filed with the SEC all documents required to be filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act") during the 12 months preceding the Effective Date. The following documents (collectively, the "Exchange Act Documents") complied when filed in all material respects with the Exchange Act and the applicable rules and regulations of the SEC thereunder, and did not, when so filed, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading: (a) Quarterly Report on Form 10-QSB for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004; (b) Annual Report on Form 10-KSB for the year ended December 31, 2004; and (c) all other documents filed by Silver Dragon with the SEC since January 1, 2004. The information contained in the Exchange Act Documents does not as of the Effective Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The term "file" as used in this Section 3.6 shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.
   7. Capitalization . The authorized capital stock of Silver Dragon conforms as to legal matters to the description thereof contained in the Exchange Act Documents. As of the Effective Date, Silver Dragon has (a) 170,000,000 shares of capital stock authorized and no other shares of any class of capital stock, (b) 28,375,533 shares of capital stock issued and outstanding and (c) no shares of capital stock held in treasury. All of the issued and outstanding shares of capital stock of Silver Dragon (i) have been duly authorized and validly issued and are fully paid and non-assessable, (ii) were issued in compliance with all applicable state and federal securities laws and (iii) were not issued in violation of any preemptive rights or rights of first refusal. Except as set forth on Schedule 3.7, (A) no preemptive rights or rights of first refusal exist with respect to the shares of capital stock of Silver Dragon and no such rights arise by virtue of or in connection with the transactions contemplated hereby, (B) there are no outstanding or authorized rights, options, warrants, convertible securities, subscription rights, conversion rights, exchange rights or other agreements or commitments of any kind that could require Silver Dragon to issue or sell any shares of its capital stock (or securities convertible into or exchangeable for shares of its capital stock) save and except for subscriptions for shares received by Silver Dragon which would authorize the issuance of a maximum of 3,000,000 common shares, (C) there are no outstanding stock appreciation, phantom stock, profit participation or other similar rights with respect to Silver Dragon, (D) there are no anti-dilution or price adjustment provisions contained in any security issued by Silver Dragon (or in any agreement or document providing rights to security holders) that will be triggered by the issuance of the Shares, (E) there are no proxies, voting rights or other agreements or understandings with respect to the voting or transfer of the capital stock of Silver Dragon, (F) there are no agreements or arrangements under which Silver Dragon is obligated to register the sale or any of its securities under the Securities Act and (G) Silver Dragon is not obligated to redeem or otherwise acquire any of its outstanding shares of capital stock. The copies of the articles of incorporation and bylaws of Silver Dragon which were provided to Sino are true, accurate and complete and reflect all amendments made through the Effective Date.
   8. Valid Issuance of Shares . The Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, will have been issued in compliance with all applicable federal and state securities laws, and will be free from all taxes, liens, claims and encumbrances. The issuance of the Shares will not be subject to any preemptive or similar rights.
   9. Financial Statements . The financial statements of Silver Dragon included in the Exchange Act Documents (including the related notes) complied as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto (including, without limitation, Regulation S-X), have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") (except, in the case of unaudited statements, to the extent permitted by Regulation S-X for Quarterly Reports on Form 10-QSB) applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto) and fairly present the financial condition of Silver Dragon at the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that were not, or with respect to any such financial statements contained in any Exchange Act Documents to be filed subsequent to the Effective Date are not reasonably expected to be, material in amount or effect). Except (a) as reflected in Silver Dragon's unaudited balance sheet at December 31, 2004 or liabilities described in any notes thereto (or liabilities for which neither accrual nor footnote disclosure is required pursuant to GAAP) or (b) for liabilities incurred in the ordinary course of business since December 31, 2004 consistent with past practice or in connection with this Agreement or the transactions contemplated hereby, Silver Dragon does not have any material liabilities or obligations of any nature.
   10. No Material Adverse Change; Litigation . There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of Silver Dragon, taken as a whole, since December 31, 2004. There are no legal or governmental proceedings pending or threatened to which Silver Dragon is a party or to which any of the properties of Silver Dragon is subject other than proceedings accurately described in all material respects in the Exchange Act Documents and proceedings that would not have a material adverse effect on Silver Dragon, taken as a whole, or on the power or ability of Silver Dragon to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.
   11. No Registration Required . It is not necessary under applicable laws in connection with the offer, sale and/or delivery of the Shares to Sino in the manner contemplated by this Agreement to register the Shares under the Securities Act. Silver Dragon has taken such action as is necessary to qualify the Shares for sale to Sino under applicable securities or "blue sky" laws of the states of the United States (or has obtained an exemption from such qualification), and has provided Sino with evidence of any such action so taken. C
   12. Deliveries . Silver Dragon has delivered to Sino (a) copies of the articles of incorporation and bylaws of Silver Dragon as in effect on the Effective Date, certified as of the Effective Date by the Secretary of Silver Dragon as being true, correct and complete, (b) copies of resolutions adopted by the Board of Directors of Silver Dragon authorizing the transactions contemplated by this Agreement, certified as of the Effective Date by the Secretary of Silver Dragon as being true, correct and complete, and (c) a certificate of good standing of Silver Dragon issued by the Secretary of State of the State of its incorporation as of a date not more than ten (10) days prior to the Effective Date.
4.  

ADDITIONAL COVENANTS

4. 1. Silver Dragon's Information and Accounting Rights .
   2. 1. Sino shall cause Sino-Top to maintain its books and records in a manner that accurately segregates (i) revenues and expenses attributable to the Property from the revenues and expenses attributable to any other property in respect of which Sino-Top has rights or interests and (ii) if the Option is exercised and closes, revenues and expenses attributable to the Additional Property from the revenues and expenses attributable to any other property in respect of which Sino-Top has rights or interests, for purposes of determining Property Distributions and Additional Property Distributions, as applicable.
      2. Sino shall provide Silver Dragon with Sino-Top's financial statements related to the Property and, if the Option is exercised and closes, the Additional Property, within ten (10) days of completion thereof. In addition, at the time of each distribution of Silver Dragon's share of the Property Distributions, for purposes of allowing Silver Dragon to verify the payments due to it under this Agreement, Sino shall deliver to Silver Dragon a written statement (the "Property Distribution Statement") signed by the Secretary of Sino which shall: (i) state the amount of the Property Distribution received by Sino (or which Sino would be entitled to receive) with respect to the Property; (ii) provide details including receipts (with certified English translations, if necessary) of all permissible Direct Expenses as defined in Article 1.3; (iii) provide details of all permissible Indirect Expenses as defined in Article 1.3; (iii) list the net payment to Silver Dragon of each Silver Dragon Payment; and (iv) contain a certification by the Secretary of Sino that the Property Distribution Statement is true and correct. Silver Dragon shall have a period of 30 days to review the Property Distribution Statement and documentation provided by Sino and either accept or contest the amount of the Silver Dragon Payment. In the event Silver Dragon contest the amount of a Silver Dragon Payment, Sino shall supply it with such further documentation and verification of its calculations as Silver Dragon shall reasonably request, within 30 days of such request. In the event that Silver Dragon continues to contest the amount of a Silver Dragon Payment following receipt of such additional information and documentation, the matter shall be determined in accordance with paragraph (c) below.

4. 1. 3. Silver Dragon may at any time and from time to time cause a complete audit to be made by it's auditors or chartered accountants (collectively, "Auditor") of Sino's and/or Sino-Top's business affairs, records and procedures relating solely to the calculation of Property Distributions and, if applicable, Additional Property Distributions. If the Auditor performing such audit reports to Silver Dragon that, in its reasonable opinion, Sino Top's records and procedures are insufficient to permit a determination of Property Distributions and/or Additional Property Distributions, Sino shall immediately after notice from Silver Dragon take such steps as are necessary to ensure that Sino-Top remedies this. If the Auditor reports that Sino and/or Sino-Top is in default pursuant to the requirements of Article 1 or 4 hereof or that, in its reasonable opinion, Sino's or Sino-Top's records and procedures are insufficient to permit a determination of Property Distributions and/or Additional Property Distributions, or if such audit discloses that the Silver Dragon Payment and/or Additional Silver Dragon Payment for the period in question are understated by Five Percent (5%) or more (the "Deficiency"), Sino shall forthwith, after being provided with notice from Silver Dragon, pay to Silver Dragon the cost of such audit ("Audit Cost") as well as the amount of the Deficiency. In the event that Sino disputes the amount of the Deficiency, Sino shall send written notice of such dispute to Silver Dragon ("Sino's Notice"). Within ten (10) days of receipt of Sino's Notice by Silver Dragon, Sino's auditor and Silver Dragon's Auditor shall choose a third auditor to review Sino's and/or Sino-Top's records. The report of the third auditor is final and binding on the parties hereto. In the event that the third auditor confirms that the Silver Dragon Payment and/or Additional Silver Dragon Payment for the period in question were understated by five percent (5%) or more, Sino shall remit the amount of the Deficiency and the Audit Cost to Silver Dragon forthwith. In addition, Sino shall be responsible for the cost of the third auditor. In the event that the third auditor determines that Silver Dragon Payment and/or Additional Silver Dragon Payment for the period in question were understated by less than five percent (5%), Silver Dragon shall be responsible for the cost of the third auditor.
      4. Sino shall make available to Silver Dragon from time to time, upon Silver Dragon 's request, technical information that it has regarding the Property (and the Additional Property, if applicable), including geological data and title confirmation.
      5. Sino will consult with Silver Dragon from time to time on technical and business matters affecting the Property (and the Additional Property, if applicable).
      6. Notwithstanding anything to the contrary in this Agreement, Silver Dragon shall have no right to participate in the management of Sino-Top or Sino.
   2. Silver Dragon's Option With Respect to Additional Property .

c.        Silver Dragon shall have the option, exercisable during the 30-day period following the Effective Date (the "Option Period"), to acquire an Additional Payment Right (as herein defined) with respect to an Additional Property (as herein defined), on the terms set forth in this Section 4.2 (the "Option"). For purposes hereof, the term "Additional Payment Right" means the right to receive from Sino payments (the "Additional Silver Drago