---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended: August 31, 2006

OR

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition periodfrom ___ to ____

Commission File Number 0-12132

SILVERADO GOLD MINES
LTD.(NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS
CHARTER)

|British Columbia, Canada                         | 98-0045034                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|1111 West Georgia Street, Suite 505,             |                                     
|Vancouver, British Columbia, Canada              | V6E 4M3                             
|(Address of principal executive offices)         | (Zip Code)                          

Issuer's telephone number: (604) 689-1535

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [   ]

Check whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [   ] No [X]

Number of shares outstanding as of October 11, 2006: 612,466,192
common shares.

Transitional Small Business Disclosure Format: Yes [  
] No [X]

---

PART IFINANCIAL INFORMATION

ITEM
1.               
FINANCIAL STATEMENTS

SILVERADO GOLD MINES LTD.(An Exploration Stage
Company) CONSOLIDATED BALANCE SHEETS August 31, 2006 and November 30,
2005 (Stated in United States Dollars)

|                                                            |   | 2006        |   |   | 2005        |  
|----------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                            |   | (Unaudited) |   |   |             |  
|                                                            |   |             |   |   |             |  
|**ASSETS**                                                  |  
|                                                            |   |             |   |   |             |  
|Current                                                     |   |             |   |   |             |  
|Cash and cash equivalents                                   | $ | 4,568,891   |   | $ | 408,589     |  
|Gold inventory                                              |   | 618,611     |   |   | 27,916      |  
|Amounts receivable                                          |   | 11,090      |   |   | 6,594       |  
|                                                            |   |             |   |   |             |  
|                                                            |   | 5,198,592   |   |   | 443,099     |  
|Property, plant and equipment                               |   | 1,181,574   |   |   | 1,285,553   |  
|                                                            |   |             |   |   |             |  
|                                                            | $ | 6,380,166   |   | $ | 1,728,652   |  
|                                                            |   |             |   |   |             |  
|LIABILITIES                                                 |  
|Current                                                     |   |             |   |   |             |  
|Accounts payable and
      accrued liabilities              | $ | 300,655     |   | $ | 393,058     |  
|Mineral claims royalty payable                              |   | 350,000     |   |   | 400,000     |  
|Payable to related
      companies                          |   | 244,881     |   |   | 70,282      |  
|Convertible debentures, current portion                     |   | 140,000     |   |   | 176,652     |  
|Capital lease
      obligation, current portion             |   | 289,766     |   |   | 258,254     |  
|                                                            |   |             |   |   |             |  
|                                                            |   | 1,325,302   |   |   | 1,298,246   |  
|Asset retirement obligation                                 |   | 514,315     |   |   | 539,453     |  
|Capital lease obligations                                   |   | 169,563     |   |   | 463,895     |  
|                                                            |   |             |   |   |             |  
|                                                            |   | 2,009,180   |   |   | 2,301,594   |  
|                                                            |   |             |   |   |             |  
|SHAREHOLDERS EQUITY
      (DEFICIT)                        |  
|Capital stock                                               |   |             |   |   |             |  
|Authorized: unlimited common shares with no
      par value |   |             |   |   |             |  
|Issued and outstanding:                                     |   |             |   |   |             |  
|594,722,333 common
      shares (2005: 355,054,275)         |   | 81,534,348  |   |   | 71,526,738  |  
|Additional capital stock options                            |   | 466,314     |   |   | 466,314     |  
|Shares to be issued                                         |   | -           |   |   | 54,500      |  
|Accumulated deficit during exploration                      |   | (77,629,676 | ) |   | (72,620,494 | )
|                                                            |   |             |   |   |             |  
|                                                            |   | 4,370,986   |   |   | (572,942    | )
|                                                            |   |             |   |   |             |  
|                                                            | $ | 6,380,166   |   | $ | 1,728,652   |  

See accompanying notes to financial statement

2

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SILVERADOGOLDMINESLTD.(An
Exploration Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS & OTHER
COMPREHENSIVE INCOME for the nine months ended August 31, 2006 and August
31, 2005 
  (Stated in United States Dollars)

Period SinceRecommencementOf Exploration StageThree
        months ended August 31
      
      
      Nine
        months ended August 31
      
      
      December 1, 20012006
      
      
      2005
      
      
      2006
      
      
      2005
      
      
      To(Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)
      
      
      August 31, 2006General and Administrative ExpensesAccounting and audit
      $
      11,287
      
      $
      22,256
      
      $
      83,053
      
      $
      74,556
      
      $
      257,067Advertising and promotion
      
      36,038
      
      
      44,846
      
      
      218,744
      
      
      181,884
      
      
      1,696,261Consulting fees
      
      175,724
      
      
      20,085
      
      
      788,501
      
      
      344,246
      
      
      5,171,731Depreciation, accretion
        and impairment
      
      57,412
      
      
      95,709
      
      
      167,073
      
      
      199,543
      
      
      1,910,733Exploration expenses
      
      767,864
      
      
      122,476
      
      
      2,100,326
      
      
      422,073
      
      
      10,727,686Financing activities
      
      -
      
      
      -
      
      
      -
      
      
      252,003
      
      
      252,003Interest on convertible debentures
      
      2,800
      
      
      3,258
      
      
      8,400
      
      
      9,774
      
      
      681,807Interest on capital lease
        obligations
      
      9,616
      
      
      14,657
      
      
      33,621
      
      
      41,575
      
      
      291,210Legal
      
      5,775
      
      
      5,396
      
      
      191,237
      
      
      63,717
      
      
      462,725Management services
      
      263,089
      
      
      337,711
      
      
      745,859
      
      
      626,322
      
      
      2,668,378Office
      
      84,949
      
      
      87,584
      
      
      569,048
      
      
      315,843
      
      
      2,355,992Other interest and bank
        charges
      
      2,560
      
      
      1,719
      
      
      8,143
      
      
      4,751
      
      
      35,780Reporting and investor relations
      
      96,281
      
      
      28,282
      
      
      164,763
      
      
      44,605
      
      
      279,402Research
      
      20,441
      
      
      26,537
      
      
      86,358
      
      
      91,436
      
      
      692,037Transfer agent fees and mailing
      
      8,014
      
      
      6,450
      
      
      27,615
      
      
      18,714
      
      
      118,964Write-off of mineral
        claim expenditures
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,159,529Write-down of property, plant and equipment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      285,875Total General and Administrative Expenses
      
      (1,541,850
      )
      
      (816,966
      )
      
      (5,192,741
      )
      
      (2,691,042
      )
      
      (29,047,180
      )Interest and other income
      
      91,531
      
      
      626
      
      
      108,105
      
      
      1,390
      
      
      200,895Cumulative effect of accounting change
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (153,226
      )Other comprehensive incomeGain (loss) on foreign exchange
      
      840
      
      
      78,835
      
      
      75,454
      
      
      (11,228
      )
      
      218,527Loss and comprehensive loss for the period
      $
      (1,449,479
      )
      $
      (737,505
      )
      $
      (5,009,182
      )
      $
      (2,700,880
      )
      $
      (28,780,984
      )Net loss per share
      $
      (0.00
      )
      $
      (0.01
      )
      $
      (0.01
      )
      $
      (0.01
      )Basic and diluted weighted average number ofcommon shares outstanding
      
      570,301,569
      
      
      292,906,521
      
      
      506,289,678
      
      
      266,659,207


See accompanying notes to financial statements

3

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SILVERADO GOLD MINES LTD.(An Exploration
Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS for the nine months
ended August 31, 2006 and August 31, 2005 (Stated in United States
Dollars)

|                                                             |   |                             |   |   |                      |   |   | Period Since             |  
|------------------------------------------------------------ | - | --------------------------- | - | - | -------------------- | - | - | ------------------------ | -
|                                                             |   |                             |   |   |                      |   |   | Recommencement           |  
|                                                             |   | Nine Months Ended August 31 |   |   | Of Exploration Stage |  
|                                                             |   | 2006                        |   |   | 2005                 |   |   | December 1, 2001         |  
|                                                             |   | (Unaudited)                 |   |   | (Unaudited)          |   |   | to
      August 31, 2006 |  
|Cash Flows used in Operating
      Activities                |   |                             |   |   |                      |   |   |                          |  
|Net loss for the
      period                                | $ | (5,009,182                  | ) | $ | (2,700,880           | ) | $ | (28,780,984              | )
|Adjustments to reconcile loss to net cash provided           |   |                             |   |   |                      |   |   |                          |  
|by (used in)
      operating activities:                     |   |                             |   |   |                      |   |   |                          |  
|Cumulative effect of accounting change                       |   | -                           |   |   | -                    |   |   | 153,226                  |  
|Depreciation, accretion and impairment                       |   | 167,073                     |   |   | 199,543              |   |   | 1,910,733                |  
|Stock based compensation                                     |   | -                           |   |   | -                    |   |   | 2,252,950                |  
|Stock issued for debenture                                   |   | -                           |   |   | -                    |   |   | 217,687                  |  
|Non-cash consulting expense                                  |   | 663,000                     |   |   | 284,900              |   |   | 1,525,040                |  
|Non-cash financing expense                                   |   | -                           |   |   | 252,003              |   |   | 252,003                  |  
|Interest accrued                                             |   | -                           |   |   | -                    |   |   | 486,370                  |  
|Write-off of mineral claim expenditures                      |   | -                           |   |   | -                    |   |   | 1,159,529                |  
|Write-down of property, plant and equipment                  |   | -                           |   |   | -                    |   |   | 285,875                  |  
|Changes in
      non-cash operating working capital:         |   |                             |   |   |                      |   |   |                          |  
|Amounts receivable                                           |   | (4,496                      | ) |   | 764                  |   |   | (8,215                   | )
|Gold
      inventory                                         |   | (590,695                    | ) |   | 24,384               |   |   | (607,471                 | )
|Prepaid expense                                              |   | -                           |   |   | 122,000              |   |   | -                        |  
|Exploration and development advances                         |   | -                           |   |   | 147,947              |   |   | -                        |  
|Share subscriptions issued                                   |   | (54,500                     | ) |   | (70,000              | ) |   | 115,000                  |  
|Accounts payable and accrued liabilities                     |   | (137,772                    | ) |   | 61,011               |   |   | (341,107                 | )
|Decrease in mineral claims royalty payable                   |   | (50,000                     | ) |   | -                    |   |   | 33,500                   |  
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Net cash used in Operating
      Activities                  |   | (5,016,572                  | ) |   | (1,678,328           | ) |   | (21,345,864              | )
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Cash Flows used in Investing
      Activities                |   |                             |   |   |                      |   |   |                          |  
|Purchase of
      property, plant and equipment              |   | (42,864                     | ) |   | (6,101               | ) |   | (1,377,569               | )
|Disposal of property, plant and equipment                    |   | -                           |   |   | 153,200              |   |   | 152,252                  |  
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Net cash provided (used) from
      Investing Activities     |   | (42,864                     | ) |   | 147,099              |   |   | (1,225,317               | )
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Cash Flows from Financing
      Activities                   |   |                             |   |   |                      |   |   |                          |  
|Common stock
      issued for cash (net of share issue cost) |   | 9,344,610                   |   |   | 1,822,490            |   |   | 27,952,413               |  
|Repayment of convertible debentures                          |   | (36,652                     | ) |   | -                    |   |   | (74,999                  | )
|Repayment of loans
      payable                             |   | -                           |   |   | -                    |   |   | (35,729                  | )
|Repayment of capital lease obligations                       |   | (262,819                    | ) |   | (144,607             | ) |   | (672,277                 | )
|Due to related
      party                                   |   | 174,599                     |   |   | -                    |   |   | (46,429                  | )
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Net cash provided from Financing Activities                  |   | 9,219,738                   |   |   | 1,677,883            |   |   | 27,122,979               |  
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Increase (decrease) in cash and cash
      equivalents       |   | 4,160,302                   |   |   | 146,654              |   |   | 4,551,798                |  
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Cash and cash equivalents, beginning of
      period         |   | 408,589                     |   |   | 12,828               |   |   | 17,093                   |  
|                                                             |   |                             |   |   |                      |   |   |                          |  
|Cash at end of the period                                    | $ | 4,568,891                   |   | $ | 159,482              |   | $ | 4,568,891                |  

See accompanying notes to financial statements

4

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SILVERADO GOLD MINES LTD.(An Exploration
Stage Company) Notes to Consolidated Financial Statements (Unaudited)
(Stated in United States Dollars)

Nine months ended August 31, 2006 and August 31, 2005

|1. | Basis of presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The unaudited consolidated financial statements include
      the accounts of Silverado Gold Mines Ltd. and its wholly-owned subsidiary
      Silverado Gold Mines Inc. and Silverado Green Fuel Inc. (since its
      inception on August 14, 2006). These statements have been prepared in
      accordance with United States generally accepted accounting principles for
      interim financial information. These financial statements also comply, in
      all material respects, with generally accepted accounting principles in
      the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The accompanying unaudited consolidated financial
      statements do not include all information and footnote disclosures
      required under United States generally accepted accounting principles. In
      our opinion, all adjustments (consisting solely of normal recurring
      accruals) considered necessary for a fair presentation of the financial
      position, results of operations and cash flows as at August 31, 2006, and
      for all periods presented, have been included. Readers of these financial
      statements should note that interim results for the nine month periods
      ended August 31, 2006, and August 31, 2005, are not necessarily indicative
      of the results that August be expected for the fiscal year as a
    whole.                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These financial statements should be read in conjunction
      with the consolidated financial statements and notes thereto included in
      our annual report on Form 10-KSB for the fiscal year ended November 30,
      2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Related party transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company had related party transactions with Tri-Con
      Mining Ltd., Tri-Con Mining Inc., Tri-Con Mining Alaska Inc. (collectively
      Tri-Con), all of which are controlled by a director of ours.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Tri-Con are operations and exploration contractors, and
      has been employed by the Company under contract since 1972 to carry out
      all of its fieldwork and to provide administrative and management
      services. Under our current contract dated January 1, 1997 work is charged
      at cost plus 25% for exploration and cost plus 15% for development and
      mining. Cost includes out of pocket or actual cost plus 15% charge for
      office overhead including stand by and contingencies. There is no mark up
      on capital purchases. At August 31, 2006, we owe $244,881 to Tri-Con for
      exploration and administration services to be performed during the current
      fiscal year on behalf of the Company. Tri-Cons services for the current
      fiscal year are focusing mainly on our Low-Rank Coal-Water Fuel program as
      well as corporate planning and preparation for year round production on
      our Nolan property and administration services at both our field and
      corporate offices.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The aggregate amounts paid to Tri-Con each period by
      category, including amounts relating to the Grant Mine Project and Nolan
      properties, for disbursements and for services rendered by Tri-Con
      personnel working on our projects, and including interest charged on
      outstanding balance at Tri-Cons borrowing costs are shown
  below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

5

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SILVERADO GOLD MINES LTD.(An Exploration
Stage Company) Notes to Consolidated Financial Statements (Unaudited)
(Stated in United States Dollars)

Nine months ended August 31, 2006 and August 31, 2005

|2. | Related party transactions
  (continued):
|-- | -----------------------------------------

| |                                                                      |   | August
      31, |  |   | August
      31, | 
| | -------------------------------------------------------------------- | - | ---------------- |  | - | ---------------- | 
| |                                                                      |   | 2006             |  |   | 2005             | 
| |                                                                      |   |                  |  |   |                  | 
| | Exploration services                                                 | $ | 2,100,326        |  | $ | 366,591          | 
| | Administrative and management services                               |   | 1,140,150        |  |   | 654,711          | 
| | Research                                                             |   | 86,358           |  |   | 91,436           | 
| |                                                                      | $ | 3,326,834        |  | $ | 1,112,738        | 
| |                                                                      |   |                  |  |   |                  | 
| | Amount of total charges in excess of Tri-Cons costs
      incurred  | $ | 504,452          |  | $ | 91,903           | 
| |                                                                      |   |                  |  |   |                  | 
| | Excess amount charged as a percentage of actual costs
      incurred |   | 15.2%            |  |   | 8.26%            | 

|3. | Loss per share:                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                 
|   | Basic loss per share has been calculated using the
      weighted average number of common shares outstanding for each period. Loss
      per share does not include the effect of the potential exercise of options
      and warrants and the conversion of debentures as their effect is
      anti-dilutive.
|   |                                                                                                                                                                                                                                                                                                                 
|4. | Supplementary cash flow information:                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                 
|   | Supplemental non-cash investing and financing
      activities:                                                                                                                                                                                                                                                 

| |                                          |   | August
      31, |  |   | August
      31, |  
| | ---------------------------------------- | - | ---------------- |  | - | ---------------- | -
| |                                          |   | 2006             |  |   | 2005             |  
| |                                          |   |                  |  |   |                  |  
| | Sale of fixed assets under capital lease | $ | -                |  | $ | 101,500          |  
| | Issuance of shares for:                  |   |                  |  |   |                  |  
| | Financing
      activities               |   | -                |  |   | 252,003          |  
| | Consulting services                      |   | 663,000          |  |   | 284,900          |  
| | Capital lease obligation                 |   | -                |  |   | (101,500         | )

6

---

SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  Notes to Consolidated Financial Statements 
  (Unaudited) 
  (Stated in United States Dollars)

Nine months ended August 31, 2006 and August 31, 2005

|5. | Debentures:                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                            
|   | On March 1, 2001, we completed negotiations to
      restructure our $2,000,000 convertible debentures. We issued replacement
      debentures in the aggregate amount of $2,564,400 in consideration of
      cancellation of the $2,000,000 principal amount plus all accrued interest
      on the original debentures to March 1, 2001.
|   |                                                                                                                                                                                                                                                                                                                                            
|   | (a)                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                            
|   | (b)                                                                                                                                                                                                                                                                                                                                        

|6. | Lease purchase agreement:
|-- | -------------------------

The assets and liabilities under
capital leases are recorded at the lower of the present value of the minimum
lease payments or the fair value of the asset. The assets are amortized over
their estimated productive lives which are estimated to be 10 years.
Amortization on assets under capital leases charged to expense during the period
ended August 31, 2006 was $134,893 (2005: $130,974).

Minimum future lease payments under capital
  leases as of August 31, 2006 and November 30, 2005

| |                              |   | 2006     |   |   | 2005     |  
| | ---------------------------- | - | -------- | - | - | -------- | -
| |                              |   |          |   |   |          |  
| | November 30, 2005            | $ | -        |   | $ | -        |  
| | November 30, 2006            |   | 146,552  |   |   | 778,576  |  
| | November 30, 2007            |   | 346,398  |   |   | -        |  
| |                              |   |          |   |   |          |  
| | Total minimum lease payments |   | 492,950  |   |   | 778,576  |  
| | Less: interest               |   | (33,621  | ) |   | (56,427  | )
| |                              |   |          |   |   |          |  
| |                              |   | 459,329  |   |   | 722,149  |  
| | Less: current portion        |   | (289,766 | ) |   | (258,254 | )
| |                              |   |          |   |   |          |  
| | Long-term
      portion      | $ | 169,563  |   | $ | 463,895  |  

7

---

SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  Notes to Consolidated Financial Statements 
  (Unaudited) 
  (Stated in United States Dollars)

Nine months ended August 31, 2006 and August 31, 2005

|7. | Common shares:                                                                                          
|-- | --------------------------------------------------------------------------------------------------------
|   |                                                                                                         
|   | During the period ending August 31, 2006 the Company had
      the following common shares transactions:

| | Date              | Description       | No. of shares |  |   | Price per share |  |   | Proceeds   | 
| | ----------------- | ----------------- | ------------- |  | - | --------------- |  | - | ---------- | 
| | November 30, 2005 | Balance forward   | 355,054,275   |  | $ | -               |  | $ | 71,526,738 | 
| | December 1, 2005  | Private Placement | 166,667       |  |   | 0.0300          |  |   | 5,000      | 
| | December 1, 2005  | Private Placement | 142,858       |  |   | 0.0300          |  |   | 5,000      | 
| | December 2, 2005  | Warrants          | 1,400,000     |  |   | 0.0225          |  |   | 31,500     | 
| | December 6, 2005  | Private Placement | 285,715       |  |   | 0.0350          |  |   | 10,000     | 
| | December 8, 2005  | Private Placement | 100,000       |  |   | 0.0300          |  |   | 3,000      | 
| | December 8, 2005  | Private Placement | 4,285,715     |  |   | 0.0280          |  |   | 120,000    | 
| | December 19, 2005 | Private Placement | 3,076,924     |  |   | 0.0325          |  |   | 100,000    | 
| | December 19, 2005 | Private Placement | 516,667       |  |   | 0.0300          |  |   | 15,500     | 
| | January 10, 2006  | Private Placement | 700,000       |  |   | 0.0325          |  |   | 22,750     | 
| | January 13, 2006  | Private Placement | 85,806,201    |  |   | 0.0250          |  |   | 2,145,145  | 
| | January 16, 2006  | Private Placement | 2,500,000     |  |   | 0.0300          |  |   | 75,000     | 
| | January 17, 2006  | Private Placement | 300,000       |  |   | 0.0325          |  |   | 9,750      | 
| | January 20, 2006  | Private Placement | 1,914,475     |  |   | 0.0380          |  |   | 72,750     | 
| | January 20, 2006  | Private Placement | 700,000       |  |   | 0.0325          |  |   | 22,750     | 
| | January 24, 2006  | Private Placement | 4,070,000     |  |   | 0.0300          |  |   | 122,100    | 
| | February 8, 2006  | Private Placement | 788,782       |  |   | 0.1140          |  |   | 90,000     | 
| | March 3, 2006     | Private Placement | 1,250,000     |  |   | 0.0800          |  |   | 100,000    | 
| | March 8, 2006     | Private Placement | 6,666,666     |  |   | 0.0300          |  |   | 200,000    | 
| | March 29, 2006    | Private Placement | 16,666,668    |  |   | 0.0600          |  |   | 1,000,000  | 
| | March 31, 2006    | Private Placement | 27,666,666    |  |   | 0.0600          |  |   | 1,660,000  | 
| | March 31, 2006    | Consulting        | 500,000       |  |   | 0.1300          |  |   | 65,000     | 
| | April 4, 2006     | Private Placement | 16,916,666    |  |   | 0.0600          |  |   | 1,015,000  | 
| | April 7, 2006     | Private Placement | 10,376,667    |  |   | 0.0600          |  |   | 622,600    | 
| | April 15, 2006    | Consulting        | 3,600,000     |  |   | 0.1300          |  |   | 468,000    | 
| | April 18, 2006    | Consulting        | 200,000       |  |   | 0.1300          |  |   | 26,000     | 
| | April 25, 2006    | Private Placement | 9,900,001     |  |   | 0.0700          |  |   | 693,000    | 
| | April 25, 2006    | Private Placement | 2,000,000     |  |   | 0.0800          |  |   | 160,000    | 

8

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SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  Notes to Consolidated Financial Statements 
  (Unaudited) 
  (Stated in United States Dollars)

Nine months ended August 31, 2006 and August 31, 2005

|7. | Common shares
(continued):
|-- | --------------------------

| | Date            | Description                | No. of Shares |  |   | Price per share |  |   | Proceeds   |  
| | --------------- | -------------------------- | ------------- |  | - | --------------- |  | - | ---------- | -
| |                 |                            |               |  |   |                 |  |   |            |  
| | May 1, 2006     | Private Placement          | 2,400,000     |  |   | 0.0800          |  |   | 192,000    |  
| | May 16, 2006    | Private Placement          | 4,000,000     |  |   | 0.1000          |  |   | 400,000    |  
| | May 18, 2006    | Private Placement          | 2,000,000     |  |   | 0.0400          |  |   | 80,000     |  
| | June 15, 2006   | Consulting                 | 400,000       |  |   | 0.1300          |  |   | 52,000     |  
| | July 6, 2006    | Warrants                   | 11,081,832    |  |   | 0.0690          |  |   | 767,000    |  
| | July 15, 2006   | Consulting                 | 200,000       |  |   | 0.1300          |  |   | 26,000     |  
| | July 31, 2006   | Warrants                   | 8,888,888     |  |   | 0.0400          |  |   | 355,556    |  
| | July 31, 2006   | Warrants                   | 8,000,000     |  |   | 0.0400          |  |   | 320,000    |  
| | August 15, 2006 | Consulting                 | 200,000       |  |   | 0.1300          |  |   | 26,000     |  
| |                 | Share
      issuance costs | -             |  |   | -               |  |   | (1,070,791 | )
| | August 31, 2006 |                            | 594,722,333   |  | $ | -               |  | $ | 81,534,348 |  

|8. | Subsequent events:                                                                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                            
|   | Subsequent to August 31, 2006, the Company issued an
      aggregate of 200,000 common shares at $0.13 per share totaling $26,000
      pursuant to a consulting agreement.
|   |                                                                                                                                                                            
|   | Subsequent to August 31, 2006, the Company issued an
      aggregate of 17,543,859 common shares at $0.0285 totaling $500,000
      pursuant to a private placement.       

9

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**ITEM
2.****MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

FORWARD-LOOKING STATEMENTS

The information in this Quarterly Report on Form 10-QSB
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements involve risks and
uncertainties, including statements regarding our capital needs, business plans
and expectations. Such forward-looking statements involve risks and
uncertainties regarding the market price of gold, availability of funds,
government regulations, common share prices, operating costs, capital costs,
outcomes of gold recovery activities and other factors. Forward-looking
statements are made, without limitation, in relation to operating plans,
property exploration and gold recovery activities, availability of funds,
environmental reclamation, operating costs and permit acquisition. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. Actual events or results may differ materially. In evaluating these
statements, you should consider various factors, including the risks outlined
below, and, from time to time, in other reports we file with the SEC. These
factors may cause our actual results to differ materially from any
forward-looking statement. We disclaim any obligation to publicly update these
statements, or disclose any difference between its actual results and those
reflected in these statements. The information constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.

OVERVIEW

We are engaged in the acquisition and exploration of mineral
properties in the State of Alaska. Precious metals, primarily gold, are our main
interest. We have more than 30 years of experience in all aspects of the gold
mining industry, from grass-roots exploration, to state of the art mining and
processing technologies, for both placer and lode gold deposits. Our primary
focus is presently on the exploration of our Nolan Gold Project, located 175
miles north of Fairbanks, Alaska. Our plan of operations is to continue with
exploration activities at the Nolan Gold Project. These plans include
exploration for both placer gold deposits and lode gold deposits at the Nolan
Gold Project. Our exploration activities include lode drilling and trenching,
geochemical and geophysical surveys, placer drilling, and bulk placer test
mining work that we carry out as part of our exploration programs.

We are also seeking financing to enable us to proceed with the
retrofitting and operation of our Grant Mill Facility as a demonstration
facility to establish the combustion characteristics and marketability of
low-rank coal-water fuel to be used as a replacement fuel in oil fired boilers
and utility generators. There is no assurance that we will be able to obtain any
financing for this project.

We hold interests in four groups of mineral properties in
Alaska, as described below:

|1. | our Nolan Gold Project;        
|-- | -------------------------------
|   |                                
|2. | our Ester Dome Gold properties;
|   |                                
|3. | our Hammond properties; and    
|   |                                
|4. | our Eagle Creek properties.    

We are an exploration stage company. All of our properties are
presently in the exploration stage. We do not have any commercially viable
reserves on any of our properties. There is no assurance that a commercially
viable mineral deposit exists on any of our mineral properties. Further
exploration will be required before a final evaluation of the feasibility of
commercial mining on any of our properties is determined. There is no assurance
that further exploration will result in a final evaluation that determines a
commercially viable mineral deposit exists on any of our mineral properties.

10

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PLAN OF OPERATIONS

Our plan of operation for the next three months through the
remainder of our fiscal year is discussed below:

The Nolan Gold Project

We plan to continue with the exploration at the Nolan Placer
and Nolan Lode properties within the Nolan Gold Project. Our planned geological
exploration program is described in detail in the section of our Annual Report
on Form 10-KSB for the year ended November 30, 2005 entitled Description of
Properties  Nolan Gold Project. The objective of this geological exploration
program is to further define both placer and lode gold occurrences in order to
provide a basis for future exploration activities, including test mining
activities, at the Nolan Gold Project. Our lode exploration work is intended to
increase our geologic knowledge on the Solomon Shear Trend and other lode gold
occurrences on the properties.

We plan to spend approximately $600,000 during the next three
months on ourexploration activities for the Nolan Gold Project. Of this
amount, we anticipate approximately $400,000 will be spent on test mining
activities, with the balance of $200,000 being spent on other exploration
activities, including a drilling program on the Marys Bench East deposit and
continued exploration for lode gold occurrences. The actual amount that we spend
on exploration will depend on the actual amount of funds that we have available
for exploration. While the costs of exploration and test mining may be off-set
by recoveries from sales of gold that we may achieve, these recoveries may not
exceed the costs of our exploration programs including our test mining
activities. See the discussion of our cash resources and working capital under
Liquidity and Financial Condition below and in the section entitled Risk Factors
below.

During the past three months, we retro-fitted and expanded our
gold sluice plant, and installed the water recycling ponds and pumping systems
needed to process our stockpiled gravel extracted last winter from the Swede
Channel and what we expect to extract in the 2006/2007 winter for summer of 2007
processing. We began washing the stockpiled gravel on June 28th, and
completed on July 20th. The total amount of material processed was
8,896 loose cubic yards of gravel. As of August 31, 2006, 785.22 troy ounces of
large jewelry grade gold and collectors nuggets have been recovered from the
coarse and fraction concentrates. 202.18 troy ounces of fine fraction
concentrates are secured for delivery to a smelter, and are estimated to contain
approximately 153.85 troy ounces.

During July, drilling was started on the Nolan Gold Project,
and continued through the quarter. A Reverse Circulation Drill was used to
explore for placer gold bearing gravels along the left limit benches of Nolan
Creek. Fifteen holes were completed with a total of 987 feet.

Surveyors and geologists were active throughout the summer
months on surface work on the companys mineral claims holdings at the Nolan
Gold Project. The company now holds 342 federal lode and 218 federal placer
claims in Nolan land package.

The Swede Channel project will continue underground operations
once freeze up arrives, and is expected to begin during mid October of this
year. During the last winter a main haulage way, truck and front end loader
turnarounds, explosive storage, ore pad, settling ponds, water delivery systems
and roads were installed while exploring and developing the channel. The
majority of the Swede channel remains to be mined this upcoming season.

Hammond Property

Drilling commenced on Slisco Bench on the Right Limit of the
Hammond River, and through the end of August, 19 drill holes for 3175 feet had
been completed. Once survey work is completed, 3-D imaging will be used to
enhance the interpretation of locations of potential gold bearing gravel
deposits. Other information, such as gold content and value, depth of
overburden, and permafrost continuity will be combined to assess the overall
development and mining potential of the areas being explored.

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Reclamation

Reclamation work was carried out during June through August and
included the removal of scrap steel and debris which was shipped back to
Fairbanks from solid waste disposal. At least one half of the 41 acres of bonded
surface disturbed area was reclaimed during June through August. A close working
relationship with the Bureau of Land Management is maintained to assure that
best management practices are used to accomplish the reclamation work.

Our plan is for the following operations to be carried out over
the remainder of the fiscal year.

| | 1. | Continue placer drilling aimed at further development of
      the Swede Channel and to prospect other areas of the property.                                                                                           
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                         
| | 2. | Continue reclamation of prior surface disturbances at the
      Nolan project.                                                                                                                                          
| |    |                                                                                                                                                                                                                         
| | 3. | Once freeze-up has occurred in the fall, re-open the
      Swede Channel. This work will proceed to stockpile all gold bearing gravel
      remaining in the Swede Channel to be washed during the summer of
    2007.
| |    |                                                                                                                                                                                                                         
| | 4. | Continue exploration on the Solomon Shear. This will be
      a lode gold exploration program.                                                                                                                        

This plan will continue to be modified as new information
becomes available.

We do not have any commercially viable reserves on any of our
properties that comprise the Nolan Gold Project or any of our other properties.
As we have not established commercially viable reserves on the Nolan Gold
Project, there is no assurance that any recoveries of gold from test mining
activities will be sufficient to pay for the full cost of exploration. There is
no assurance that our test mining activities will result in a final evaluation
that a commercially viable mineral deposit exists on any of our mineral
properties that comprise the Nolan Gold Project.

Low-Rank Coal-Water Fuel Project

We anticipate spending approximately $60,000 during the
remaining fiscal year on our work to seek funding from government and private
sources in connection with establishment of the demonstration facility at the
Grant Mill. There is no assurance that any financing will be obtained from
either government or private sources to fund this project.

RESULTS OF OPERATIONS

Nine months ended August 31, 2006 compared to the nine
months ended August 31, 2005.

Revenues

We did not earn revenues during the nine months ended August
31, 2006 or August 31, 2005 as commercial production of gold from the Nolan Gold
Project was not achieved during either of these periods. Under our accounting
policies, any sales of gold recovered as a result of our exploration activities
that may be realized will be treated as sales received incidental to exploration
activities on the Nolan Gold Project until such time as we have reached
commercial levels of gold production from the Nolan Gold Project.

We anticipate that we will not realize revenues during the
current fiscal year from the low-rank coal-water fuel component of our plan of
operations. We will not be able to realize revenues from this business until we
are able to proceed with the construction and operation of a commercial-scale
demonstration facility for the low-rank coal-water fuel technology. There is no
assurance that we will be able to secure the financing necessary to proceed with
construction of this demonstration facility or that the demonstration facility
will prove the commercial viability of the process.

12

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Expenses

Our expenses increased to $5,192,741 for the nine months ended
August 31, 2006 compared to $2,691,042 for the nine months ended August 31,
2005, representing an increase of $2,501,699 or 93%. Our expenses increased to
$1,541,850 for the three months ended August 31, 2006 compared to $816,966 for
the three months ended August 31, 2005, representing an increase of $724,884 or
89%. The increase in expenses was attributable to increases in exploration,
management services, consulting, legal, and office expenses during the period
ended August 31, 2006 to facilitate exploration on our Nolan Gold Project.

Increased exploration activity on our mineral properties
resulted in an increase of our general exploration expenses to $2,100,326 for
the nine months ended August 31, 2006 compared to $422,073 for the nine months
ended August 31, 2005. General exploration expenses increased to $767,864 for
the three months ended August 31, 2006 compared to $122,476 for the three months
ended August 31, 2005. The increase in exploration expenses during the nine
months of our current fiscal year was attributable to increased exploration
activities at the Nolan Gold Project compared to 2005. These exploration
activities included sluicing, drilling and surveying activities on the Nolan
Gold Project. We anticipate that our exploration expenses will increase when we
continue the test mining program aimed at further development of the Swede
Channel and to prospect other areas of the property.

Office expenses increased to $569,048 for the nine months ended
August 31, 2006 compared to $315,843 for the nine months ended August 31, 2005,
representing an increase of $253,205 or 80%. Office expenses decreased to
$84,949 for the three months ended August 31, 2006 compared to $87,584 for the
three months ended August 31, 2005, representing a decrease of $2,635 or 3%. The
overall increase during the period ending August 31, 2006 reflects an increase
in our general office operating costs at our offices in Fairbanks, Alaska due to
exploration activities on the Nolan Gold Project.

Management services expenses increased to $745,859 for the nine
months ended August 31, 2006 compared to $626,322 for the nine months ended
August 31, 2005, representing an increase of $119,537 or 19%. Management
services expenses decreased to $263,089 for the three months ended August 31,
2006 compared to $337,711 for the three months ended August 31, 2005
representing a decrease of $74,622 or 22%. The overall increase in management
services is a result of increased exploration activity during the period ending
August 31, 2006 compared to the period ending August 31, 2005.

Consulting fees increased to $788,501 for the nine months ended
August 31, 2006 compared to $344,246 for the nine months ended August 31, 2005,
representing an increase of $444,255 or 129%. Consulting fees increased to
$175,724 for the three months ended August 31, 2006 compared to $20,085 for
three months ended August 31, 2005, representing an increase of $155,639. The
increase is largely attributable to engaging consulting services to facilitate
our Low-Rank Coal-Water Fuel Project. Consulting fees are attributable to stock
based compensation paid to our consultants during the year. Compensation was
recorded based on the quoted market price of our shares as of the date of the
agreement.

Loss

Our loss and comprehensive loss increased to $5,009,182 for the
nine months ended August 31, 2006 compared to $2,700,880 for the nine months
ended August 31, 2005 representing an increase of $2,308,302 or 85%. The
increase in our loss was primarily attributable to increased exploration,
management services, consulting and office expenses during the nine months ended
August 31, 2006. We anticipate that we will continue to incur a loss until such
time as we can achieve commercial production from the Nolan Gold Project, of
which there is no assurance.

LIQUIDITY AND FINANCIAL CONDITION

Cash and Working Capital

The Company had cash and cash equivalents of $4,568,891 as of
August 31, 2006, compared to cash of $408,589 as of November 30, 2005. We had
working capital of $3,873,290 as of August 31, 2006, compared to a working
capital deficiency of $855,147 as of November 30, 2005. The increase in our
working capital was

13

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primarily the result of increased funding through equity sales
of our common shares and extraction of gold during the nine months ended August
31, 2006.

We plan to spend approximately $600,000 in the next three
months on ourexploration activities for the Nolan Gold Project. Of this
amount, we anticipate approximately $400,000 will be spent on test mining
activities, with the balance of $200,000 being spent on other exploration
activities, including a drilling program on the Marys Bench East deposit and
continued exploration for lode gold occurrences. While the costs of exploration
and test mining may be off-set by recoveries from sales of gold that we may
achieve, these recoveries may not exceed the costs of our exploration programs
including our test mining activities. See Risk Factors.

Cash Used in Operating Activities

Cash used in operating activities increased to $5,016,572 for
  the nine months ended August 31, 2006, compared to $1,678,328 for the nine months
  ended August 31, 2005, primarily as a result of our increased exploration activity
  on the Nolan Gold Project. We funded the cash used in operating activities predominantly
  through equity sales of our common shares.

Investing Activities

Cash paid for investing activities was $42,864 during the nine
months ended August 31, 2006 compared to cash provided from investing activities
of $147,099 during the nine months ended August 31, 2005. The Company purchased
mining and computer equipment during the period ending August 31, 2006.

Financing Activities

Cash provided by financing activities increased to $9,219,738
for the nine months ended August 31, 2006, compared to $1,677,883 for the nine
months ended August 31, 2005. Cash provided by financing activities was
primarily attributable to share issuances. Cash provided by financing activities
was used to fund our operating and investing activities. Equity financings were
completed with private purchasers at prices that were reflective of the market
price of our common shares as of the date of the financing.

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing shareholders.

Capital Leases

On October 11, 2002, we entered into a lease purchase agreement
whereby we would purchase three dump trucks, an underground loader, two surface
loaders, and other equipment valued at a total of $1,496,150. The agreement
required payment upon signing of $550,000 (paid), $100,000 on or before December
1, 2003 (paid) and 24 equal payments thereafter for the balance of the purchase
price plus interest at a rate of 12% per annum.

On February 14, 2003, we entered into a three-year lease
agreement whereby we would purchase mining equipment valued at $250,170. The
agreement required a payment on signing of $105,000 (paid), $25,000 on or before
December 4, 2003 and 24 equal payments for the balance of the purchase price
plus interest at a rate of 12% per annum.

On January 28, 2004 the agreements for the above two leases
were modified into one agreement. The modified agreement required us to make a
one-time payment of $50,000 on acceptance of the agreement and a fixed amount
per month specified in the agreement in the following six months. At the same
time of accepting the revised agreement, we returned three pieces of equipment
under the original capital lease agreement to the lessor as a credit towards the
lease liability.

During the year ended November 30, 2004, the Company entered
into an agreement to combine the two lease agreements. The new agreement
required payment upon signing of $50,000 (paid), and monthly payments of $25,000
for the balance of principal plus interest at a rate of 7.5% per annum.

14

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As at August 31, 2006, the total amount outstanding under the
revised lease purchase agreements was $492,950, including interest of $33,621.
We are required to maintain the equipment in good working order and are also
required to maintain adequate insurance on the equipment. We are required to
complete future lease payments of $146,552 during fiscal 2006 and $346,398
during fiscal 2007.

Tri-Con

We owe $244,881 to Tri-Con as of August 31, 2006 in connection
with planned exploration activities to be carried out on the Nolan Gold Project
during fiscal 2006. These activities will be carried out by Tri-Con on behalf of
the Company in accordance with our operating agreements with Tri-Con. See Item
12 -- Certain Relationships and Related Transactions of our Annual Report on
Form 10-KSB for the year ended November 30, 2005 for further disclosure
regarding our operating agreements with the Tri-Con.

Debt

The amount of our convertible debt outstanding was $140,000 as
of August 31, 2006. This entire amount is current. This amount consists of a
convertible debenture in the amount of $140,000 which is in default and has
accrued interest of $95,627. It is unclear as to whether this amount will ever
be converted into common shares as we have been unsuccessful in our extensive
attempts to locate the holders of these debentures. There is no agreement to
exchange this amount of remaining original convertible debentures into
replacement debentures.

As of November 30, 2004, we had repaid in full all previously
outstanding convertible debentures that we had renegotiated as of March 1, 2001.

Mineral Properties

As of August 31, 2006, we were in arrears of required mineral
property claims and option payments of $350,000 in respect of our Hammond
Property and therefore the rights to the property were adversely affected.
However, we are currently in the process of re-negotiating the terms and
conditions of the Agreement with the property owner. The property owner has
confirmed that our mineral claims and options are in good standing on the
understanding we will use our best efforts to pay the minimum royalty payments,
including the payments that are in arrears for the past four years, when
business conditions permit. There is however no assurance that we will be able
to re-negotiate this agreement.

Low-Rank Coal-Water Fuel Business

In order to proceed with establishing the commercial viability
of our low-rank coal-water fuel business, we are currently seeking financing
from the U.S. Government and from private sources to achieve the full
$20,000,000 funding for this project. There is no assurance that we will be
awarded any grant or private funding or that we will be able to complete any
additional sales of our equity securities or arrange for debt or other financing
to fund this component of our plan of operations.

Future Financings

We require additional financings in order to fund our plan of
operations. We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing shareholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned exploration
activities, including test mining activities.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources and
would be considered material to investors.

15

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CRITICAL ACCOUNTING POLICIES

Exploration Stage Company

The Securities and Exchange Commissions Securities Act
Industry Guide 7 Description of Property by Issuers Engaged or to be Engaged in
Significant Mining Operations requires that mining companies in the exploration
stage should not refer to themselves as development stage companies in their
financial statements, even though such companies should comply with Financial
Accounting Standards Board Statement No. 7, if applicable. We are an exploration
stage company under the SECs Guide 7 and accordingly, we have not been referred
to as a development stage company in our financial statements. Accumulated
results of operations are presented from December 1, 2001, the date we
re-entered the exploration stage.

Mineral claim payments and exploration costs

We expense all costs related to the acquisition, maintenance
and exploration of mineral claims in which we have secured exploration rights
prior to establishment of proven and probable reserves. To date, we have not
established the commercial feasibility of our exploration prospects; therefore,
all costs are being expensed.

Asset retirement obligation

Effective December 1, 2002, we adopted SFAS 143, Accounting for
Asset Retirement Obligations, which addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated retirement costs. The standard applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and normal use of the asset.

SFAS No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The fair value of the
liability is added to the carrying amount of the associated asset and this
additional carrying amount is depreciated over the life of the asset. The
liability is accreted at the end of each period through charges to operating
expense. If the obligation is settled for other than the carrying amount of the
liability, we will recognize a gain or loss on settlement.

Stock Based Compensation

Effective November 1, 2002, we adopted the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation. Under the modified prospective method of adoption selected by us
under the provisions of FASB Statement No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, compensation cost recognized in 2003
is the same as that which would have been recognized had the recognition
provisions of Statement 123 been applied from its original effective date.
Results for prior years have not been restated. The value of shares issued to
non-employees for services is based on the quoted market price of our shares as
of the date of issue.

Gold Inventory

Gold inventory is valued at the lower of weighted average cost
and estimated net realizable value. Proceeds on gold recoveries from test mining
are recorded as a reduction of exploration costs during the period the Company
is in the exploration stage.

Note: Historically, the Company has used the spot gold price
to value its entire gold inventory. On average, the Companys test production of
past years has yielded 50% gold dust and 50% gold nuggets. Gold dust has brought
a sales price equivalent to the spot gold price. Gold nuggets, however, are
considered to be gem or jewelry items. They are valued according to weight,
purity, character, and relative flatness (wearing quality). Historically, the
Companys gold nuggets have sold in a range of 5 to 350% over the spot gold
price. In aggregate, the historical sales price of the Companys gold nuggets
have yielded a realizable value of 67% in excess of the spot gold price.

16

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ITEM
3.                
CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") require public companies to maintain "disclosure controls and procedures,"
which are defined to mean a company's controls and other procedures that are
designed to ensure that information required to be disclosed in the reports that
it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Exchange Act. Our Chief
Executive Officer and Chief Financial Officer carried out an evaluation of the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based on those evaluations, our Chief Executive
Officer and Chief Financial Officer concluded that:

(i) that our disclosure controls and
procedures are designed to ensure that information required to be disclosed by
us in the reports we file under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Exchange Act
and that such information is accumulated and communicated to our management,
including the CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure; and

(ii) that our disclosure controls and
procedures are effective.

(b) Changes in Internal Controls. There were no
significant changes in our internal controls or, to our knowledge, in other
factors that could significantly affect our internal controls subsequent to the
evaluation date.

| | (1) | While management believes that our disclosure controls
      and procedures and our internal control over financial reporting are
      effective, no system of controls can prevent all error and all fraud. A
      control system, no matter how well designed and operated, can provide only
      reasonable, not absolute, assurance that the control system's objectives
      will be met. Further, the design of a control system must reflect the fact
      that there are resource constraints, and the benefits of controls must be
      considered relative to their costs. Because of the inherent limitations in
      all control systems, no evaluation of controls can provide absolute
      assurance that all control issues and instances of fraud, if any, within
      our company have been detected. These inherent limitations include the
      realities that judgments in decision-making can be faulty, and that
      breakdowns can occur because of simple error or mistake. Controls can also
      be circumvented by the individual acts of some persons, by collusion of
      two or more people, or by management override of the controls. The design
      of any system of controls is based in part upon certain assumptions about
      the likelihood of future events, and there can be no assurance that any
      design will succeed in achieving its stated goals under all potential
      future conditions. Over time, controls may become inadequate because of
      changes in conditions or deterioration in the degree of compliance with
      its policies or procedures. Because of the inherent limitations in a
      cost-effective control system, misstatements due to error or fraud may
      occur and not be detected
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

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PART II OTHER INFORMATION

ITEM
1.                
LEGAL PROCEEDINGS

We are not a party to any material pending legal proceedings
nor are aware of any contemplated proceedings by a governmental agency.

ITEM
2.                
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have not sold any unregistered securities other than those
previously reported on a Current Report on Form 8-K and filed with the
Securities and Exchange Commission.

ITEM
3.                
DEFAULTS UPON SENIOR SECURITIES

We are currently in default of obligations pursuant to
convertible debentures in the aggregate principal amount of $140,000, plus
accrued interest of $92,827. There is no agreement to exchange this amount of
remaining original convertible debentures into replacement debentures.

ITEM
4.                
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM
5.                
OTHER INFORMATION

None.

ITEM
6.                
EXHIBITS

|Exhibit |  |                                                                                                                                                                                         
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of
      Exhibit                                                                                                                                                            
|        |  |                                                                                                                                                                                         
|3.1     |  | Articles of the Company (1)                                                                                                                                                             
|        |  |                                                                                                                                                                                         
|3.2     |  | Amendment to Articles of the Company (2)                                                                                                                                                
|        |  |                                                                                                                                                                                         
|3.3     |  | Altered Memorandum of the Company (3)                                                                                                                                                   
|        |  |                                                                                                                                                                                         
|3.4     |  | Amendment to Articles of the Company (8)                                                                                                                                                
|        |  |                                                                                                                                                                                         
|4.1     |  | Share certificate representing common shares of the
      capital of the Company (1)                                                                                                    
|        |  |                                                                                                                                                                                         
|10.1    |  | Agreement for Conditional Purchase and Sale of Mining
      Property between the Company and Roger C. Burggraf dated October 6, 1978 
      Grant Mine Property (1)                    
|        |  |                                                                                                                                                                                         
|10.2    |  | Agreement for Conditional Purchase and Sale of Mining
      Property between the Company and Paul Barelka, Donald May and Mark
      Thoennes dated May 12, 1979  St. Paul Property (1)
|        |  |                                                                                                                                                                                         
|10.3    |  | Lease of Mining Claims with Option to Purchase between
      the Company and Alaska Mining Company, Inc. dated February 3, 1995 
      Hammond Property (4)                            
|        |  |                                                                                                                                                                                         
|10.4    |  | Change of Control Agreement between the Company and Garry
      L. Anselmo dated May, 1995(6)                                                                                           
|        |  |                                                                                                                                                                                         
|10.5    |  | Change of Control Agreement between the Company and James
      Dixon dated May, 1995 (6)                                                                                               
|        |  |                                                                                                                                                                                         
|10.6    |  | Amendment to Change of Control Agreement between the
      Company and Garry L. Anselmo (6)                                                                                             
|        |  |                                                                                                                                                                                         
|10.7    |  | Operating Agreement between the Company and Tri-Con
      Mining Ltd. dated January 1, 1997 (5)                                                                                         
|        |  |                                                                                                                                                                                         
|10.8    |  | Operating Agreement between the Company and Tri-Con
      Mining Inc. dated January 1, 1997 (6)                                                                                         
|        |  |                                                                                                                                                                                         
|10.9    |  | Operating Agreement between the Company and Tri-Con
      Mining Alaska Inc. dated January 1, 1997 (6)                                                                                  
|        |  |                                                                                                                                                                                         
|10.10   |  | Contract between the Company and Dr. Warrack Willson
      dated March 19, 2001 (6)                                                                                                     
|        |  |                                                                                                                                                                                         
|10.11   |  | Equipment Lease Agreement between the Company
      and Airport Equipment Rentals Inc. dated October 11, 2002 (6)                                                                       

18

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|10.12 |  | 2003 Stock Option Plan (7)                                                                                                            
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                       
|10.13 |  | Form of Warrant Exercise Agreement
        between the Company and certain of the selling security holders (9)                        
|      |  |                                                                                                                                       
|10.14 |  | Consultant Agreement between the Company
        and CEOcast, Inc. dated April 21, 2004 (9)                                           
|      |  |                                                                                                                                       
|10.15 |  | Subscription Agreement between the
        Company and Christoph Bruning dated May 10, 2004 (9)                                       
|      |  |                                                                                                                                       
|10.16 |  | Consultant Agreement between the Company
        and Smith Canciglia Consulting, Inc. dated May 16, 2004 (9)                          
|      |  |                                                                                                                                       
|10.17 |  | Form of Delay Agreement between the
        Company and certain of the Selling Shareholders.(9)                                       
|      |  |                                                                                                                                       
|10.18 |  | 2004 Stock Option Plan (10)                                                                                                           
|      |  |                                                                                                                                       
|31.1  |  | Certification Pursuant To
        Section 302 Of The Sarbanes-Oxley Act Of 2002                                                       
|      |  |                                                                                                                                       
|31.2  |  | Certification Pursuant To
        Section 302 Of The Sarbanes-Oxley Act Of 2002                                                       
|      |  |                                                                                                                                       
|32.1  |  | Certification Pursuant To
        18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley
        Act Of 2002
|      |  |                                                                                                                                       
|32.2  |  | Certification Pursuant To 18
        U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley
        Act Of 2002

|(1)  | Filed as an exhibit to the Companys Registration
      Statement on Form 10 filed initially on May 11, 1984, as
amended.
|---- | -------------------------------------------------------------------------------------------------------------------------
|(2)  | Filed as an exhibit to the Companys Quarterly Report on
      Form 10-Q filed on July 15, 1997.                         
|(3)  | Filed as an exhibit to the Companys Current Report on
      Form 8-K filed on September 11, 2002.                       
|(4)  | Filed as an exhibit to the Companys Annual Report on
      Form 10-K for the year ended November 30, 1995.              
|(5)  | Filed as an exhibit to the Companys Annual Report on
      Form 10-K for the year ended November 30, 1996.              
|(6)  | Filed as an exhibit to the Companys Annual Report on
      Form 10-KSB for the year ended November 30, 2002.            
|(7)  | Filed as an exhibit to the Companys Schedule 14A Proxy
      Statement filed April 29, 2003.                            
|(8)  | Filed as an exhibit to the Companys Current Report on
      Form 8-K filed on June 13, 2003.                            
|(9)  | Filed as an exhibit to the Companys Registration
      Statement on Form SB-2 filed on May 19, 2004;                    
|(10) | Filed as an exhibit to the Companys Quarterly Report on
      Form 10-QSB filed on July 15, 2004.                       

19

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

|                           | SILVERADO GOLD MINES LTD.                      
|-------------------------- | -----------------------------------------------
|                           |                                                
|                           |                                                
|DATE: **October 16, 2006** |                                                
|                           |                                                
|                           | /s/ Garry L. Anselmo                           
|                           | Garry L. Anselmo                               
|                           | President, Chief Executive Officer (Principal  
|                           | Executive Officer), and Chief Financial Officer
|                           | (Principal Financial and Accounting Officer)   

20

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