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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: August 31,2011

or

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

For the transition period from: ___________to ___________

Commission File Number: 000-12132

SILVERADO GOLD MINES
LTD.(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

|British Columbia, Canada                                             | 98-0045034                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|5455 152ndStreet, Suite 308                                          |                                     
|Surrey, British Columbia, Canada                                     | V3S 5A5                             
|(Address of principal executive offices)                             | (Zip Code)                          

Registrants telephone number: (800) 665-4646

Former name, former address, and former fiscal year, if changed
since last report: N/A

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 [ ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]

Indicate by check mark whether the Registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.

Large accelerated filer [ ]
    Accelerated filer [ ]Non-accelerated filer [ ]
    Smaller reporting company [X]


Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [    ] No [ X
]

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
2,914,377,244 common shares, no par value, outstanding as of October 4,
2011.

1

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|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES
|----------------------------------------------
|(An Exploration Stage Company)                
|                                              
|INDEX                                         
|                                              
|Quarterly Period Ended August 31, 2011        

|Item
      1.                     | Financial
      Statements                                                                  | 4 
|--------------------------------- | ------------------------------------------------------------------------------------------- | --
|Item
      2.                     | Management's
      Discussion and Analysis of Financial Condition and Results of Operations | 29
|Item
      3.                     | Quantitative
      and Qualitative Disclosures About Market Risk                            | 39
|Item
      4.                     | Controls
      and Procedures                                                               | 39
|PART
      II  OTHER INFORMATION | 40                                                                                         
|Item
      1.                     | Legal
      Proceedings                                                                     | 40
|Item
      2.                     | Unregistered
      Sales of Equity Securities and Use of Proceeds                           | 40
|Item
      3.                     | Defaults
      Upon Senior Securities                                                       | 40
|Item
      4.                     | Removed
      and Reserved                                                                  | 40
|Item
      5.                     | Other
      Information                                                                     | 40
|Item
      6.                     | Exhibits                                                                                    | 41
|SIGNATURES                        | 43                                                                                         

2

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|                                                                                                                                                                                                                                                | Page
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|FINANCIAL STATEMENTS                                                                                                                                                                                                                            |     
|                                                                                                                                                                                                                                                |     
|Consolidated Balance Sheets as of August 31, 2011
      (unaudited) and November 30, 2010                                                                                                                                                       | 5   
|                                                                                                                                                                                                                                                |     
|Consolidated Statements of Operations for the three
      months and nine months ended August 31, 2011 and 2010, and for the period
      from December 1, 2001 (Recommencement of Exploration Stage) through August
      31, 2011 (unaudited) | 6   
|                                                                                                                                                                                                                                                |     
|Consolidated Statements of Cash Flows for the nine months
      ended August 31, 2011 and 2010, and for the period from December 1, 2001
      (Recommencement of Exploration Stage) through August 31, 2010 (unaudited)                        | 7   
|                                                                                                                                                                                                                                                |     
|Notes to the Consolidated Financial Statements as of
      August 31, 2011 (unaudited)                                                                                                                                                          | 8-28

3

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited consolidated financial statements for the three
and nine month periods ended August 31, 2011 form part of this quarterly report.
They are stated in United States Dollars (US$) and are prepared in accordance
with United States generally accepted accounting principles.

4

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|SILVERADO GOLD MINES LTD.        
|---------------------------------
|(An Exploration Stage Company)   
|CONSOLIDATED BALANCE SHEETS      
|(Stated In United States Dollars)

|                                                                                                                                                                       |  | August 31,   |   |  | November 30, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                                                                                                                       |  | 2011         |   |  | 2010         |  
|                                                                                                                                                                       |  | $            |   |  | $            |  
|                                                                                                                                                                       |  | (unaudited)  |   |  |              |  
|ASSETS                                                                                                                                                                 |  |              |   |  |              |  
|Current Assets                                                                                                                                                         |  |              |   |  |              |  
|Cash                                                                                                                                                                   |  | 501          |   |  | 66,267       |  
|Gold inventory (Note 3)                                                                                                                                                |  |             |   |  | 6,316        |  
|Prepaid expenses and other receivables (Note
      4)                                                                                                                  |  | 136,494      |   |  | 316,393      |  
|Total Current Assets                                                                                                                                                   |  | 136,995      |   |  | 388,976      |  
|Restricted Cash Equivalent (Note 5)                                                                                                                                    |  | 9,189        |   |  |             |  
|Mineral Properties and Rights (Note 6)                                                                                                                                 |  | 1,759,522    |   |  | 1,600,442    |  
|Property and Equipment (Note 7)                                                                                                                                        |  | 541,074      |   |  | 494,416      |  
|Total Assets                                                                                                                                                           |  | 2,446,780    |   |  | 2,483,834    |  
|                                                                                                                                                                       |  |              |   |  |              |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                                                  |  |              |   |  |              |  
|Current Liabilities                                                                                                                                                    |  |              |   |  |              |  
|Cheques written in excess of cash balance                                                                                                                              |  | 6,970        |   |  |             |  
|Accounts payable and accrued
      liabilities                                                                                                                         |  | 1,150,264    |   |  | 915,819      |  
|Due to related parties (Note 12)                                                                                                                                       |  | 680,463      |   |  | 871,744      |  
|Tenant inducement (Note 8)                                                                                                                                             |  | 11,685       |   |  |             |  
|Promissory notes (Note 9)                                                                                                                                              |  | 365,000      |   |  | 62,327       |  
|Convertible debt, net of
      unamortized discount of $125,058 (Note 10)                                                                                              |  | 224,942      |   |  | 10,620       |  
|Mineral claims royalty payable (Note 6(c))                                                                                                                             |  | 610,000      |   |  | 550,000      |  
|Total Current Liabilities                                                                                                                                              |  | 3,049,324    |   |  | 2,410,510    |  
|Tenant Inducement (Note 8)                                                                                                                                             |  | 55,238       |   |  |             |  
|Asset Retirement Obligation (Note 11)                                                                                                                                  |  | 586,205      |   |  | 565,016      |  
|Total Liabilities                                                                                                                                                      |  | 3,690,767    |   |  | 2,975,526    |  
|Commitments and Contingencies (Notes 1 and
      17)                                                                                                                   |  |              |   |  |              |  
|Subsequent Events (Note 21)                                                                                                                                            |  |              |   |  |              |  
|Stockholders Deficit                                                                                                                                                  |  |              |   |  |              |  
|Common Stock, unlimited shares authorized, no par value;
      2,921,377,244 shares issued and outstanding (November 30, 2010 -
      2,441,343,879 shares ) (Note 13) |  | 105,584,639  |   |  | 103,999,508  |  
|Additional Paid-in Capital                                                                                                                                             |  | 1,368,584    |   |  | 1,397,805    |  
|Shares To Be Issued (Note 13)                                                                                                                                          |  | 251,671      |   |  | 207,716      |  
|Deficit Accumulated During the Exploration Stage                                                                                                                       |  | (108,448,881 | ) |  | (106,096,721 | )
|Total
      Shareholders Deficit                                                                                                                                      |  | (1,243,987   | ) |  | (491,692     | )
|Total Liabilities and Stockholders Deficit                                                                                                                            |  | 2,446,780    |   |  | 2,483,834    |  

The accompanying notes are an integral part of these
consolidated financial statements

5

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|SILVERADO GOLD MINES LTD.            
|-------------------------------------
|(An Exploration Stage Company)       
|CONSOLIDATED STATEMENTS OF OPERATIONS
|(UNAUDITED)                          
|(Stated In United States Dollars)    

|                                                                                                                                   |  | Accumulated From   |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ----------------- | - |  | ------------- | - |  | ------------- | -
|                                                                                                                                   |  | December 1, 2001   |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|                                                                                                                                   |  | (Date of           |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|                                                                                                                                   |  | Recommencement of  |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|                                                                                                                                   |  | Exploration Stage) |   |  | Three Months Ended |   |  | Nine Months Ended |  
|                                                                                                                                   |  | to August 31,      |   |  | August 31,         |   |  | August 31,        |  
|                                                                                                                                   |  | 2011               |   |  | 2011               |   |  | 2010              |   |  | 2011          |   |  | 2010          |  
|                                                                                                                                   |  | $                  |   |  | $                  |   |  | $                 |   |  | $             |   |  | $             |  
|                                                                                                                                   |  |                    |   |  |                    |   |  | (Restated        |   |  |               |   |  | (Restated    |  
|                                                                                                                                   |  |                    |   |  |                    |   |  | Note 22)          |   |  |               |   |  | Note 22)      |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Revenue                                                                                                                            |  |                   |   |  |                   |   |  |                  |   |  |              |   |  |              |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Expenses                                                                                                                           |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Accounting and
      auditing                                                                                                      |  | 1,025,571          |   |  | 20,860             |   |  | 29,492            |   |  | 129,530       |   |  | 48,082        |  
|Advertising, promotion and
      travel                                                                                            |  | 3,031,234          |   |  | 1,318              |   |  | 221               |   |  | 4,890         |   |  | 15,643        |  
|Consulting fees                                                                                                                    |  | 13,070,326         |   |  | 1,035              |   |  | 262,222           |   |  | 1,033,417     |   |  | 1,123,750     |  
|Depreciation                                                                                                                       |  | 3,022,986          |   |  | 30,029             |   |  | 53,328            |   |  | 78,976        |   |  | 163,642       |  
|Exploration
      expenses                                                                                                         |  | 16,234,598         |   |  | 38,895             |   |  | 74,405            |   |  | 211,752       |   |  | 346,919       |  
|Amortization of debt issuance
      costs                                                                                          |  | 321,078            |   |  | 6                  |   |  | 2,763             |   |  | 1,775         |   |  | 6,825         |  
|Foreign exchange
      (gain) loss                                                                                                 |  | (394,276           | ) |  | (7,635             | ) |  | (28,171           | ) |  | (2,243        | ) |  | 16,687        |  
|Legal and other professional
      fees                                                                                            |  | 1,956,492          |   |  | 17,959             |   |  | 33,964            |   |  | 91,162        |   |  | 270,654       |  
|Management
      services (Note 12)                                                                                                |  | 6,649,872          |   |  | 30,122             |   |  | 42,993            |   |  | 106,626       |   |  | 111,841       |  
|Office expenses                                                                                                                    |  | 5,577,782          |   |  | 68,635             |   |  | 83,450            |   |  | 245,367       |   |  | 316,841       |  
|Related party
      charges in excess of cost incurred (Note 12)                                                                   |  | 4,939,770          |   |  | 1,532              |   |  | (23,108           | ) |  | 7,744         |   |  | 17,048        |  
|Reporting and investor relations                                                                                                   |  | 1,643,591          |   |  | 28,791             |   |  | 34,252            |   |  | 85,679        |   |  | 165,233       |  
|Research                                                                                                                           |  | 1,064,735          |   |  |                   |   |  |                  |   |  |              |   |  |              |  
|Transfer agent and filing fees                                                                                                     |  | 480,375            |   |  | 7,697              |   |  | 20,234            |   |  | 39,371        |   |  | 50,557        |  
|Impairment of
      mineral claim expenditures                                                                                     |  | 1,159,529          |   |  |                   |   |  |                  |   |  |              |   |  |               |  
|Impairment of property and
      equipment                                                                                         |  | 329,679            |   |  |                   |   |  |                  |   |  |              |   |  |              |  
|Impairment of leasehold
      improvements                                                                                         |  | 340,821            |   |  |                   |   |  |                  |   |  |              |   |  |              |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Total Operating Expenses                                                                                                           |  | 60,454,163         |   |  | 239,244            |   |  | 586,045           |   |  | 2,034,046     |   |  | 2,653,722     |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Operating Loss                                                                                                                     |  | (60,454,163        | ) |  | (239,244           | ) |  | (586,045          | ) |  | (2,034,046    | ) |  | (2,653,722    | )
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Gold income earned during the exploration
      stage                                                                              |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Gold sale
      proceeds earned during the exploration stage                                                                       |  | 3,731,722          |   |  | 17,412             |   |  |                  |   |  | 17,412        |   |  |              |  
|Cost of gold sold                                                                                                                  |  | (3,256,823         | ) |  | (6,450             | ) |  |                  |   |  | (6,450        | ) |  |              |  
|Gold inventory addition from
      gold extraction                                                                                 |  | 3,248,056          |   |  |                   |   |  |                  |   |  |              |   |  |              |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Total Gold Income Earned During the Exploration Stage                                                                              |  | 3,722,955          |   |  | 10,962             |   |  |                  |   |  | 10,962        |   |  |              |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Other Income (Expense)                                                                                                             |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Interest and
      other income                                                                                                    |  | 278,104            |   |  | 10                 |   |  |                  |   |  | 37            |   |  | 77            |  
|Interest expenses on capital
      lease obligations                                                                               |  | (333,221           | ) |  |                   |   |  |                  |   |  |              |   |  |              |  
|Accretion of discount on convertible debt and promissory notes                                                                     |  | (1,429,389         | ) |  | (154,682           | ) |  | (68,895           | ) |  | (312,511      | ) |  | (163,516      | )
|Other interest expenses and bank
      charges                                                                                     |  | (158,387           | ) |  | (16,257            | ) |  | (10,742           | ) |  | (29,746       | ) |  | (39,280       | )
|Penalty on
      convertible debt                                                                                                  |  | (75,000            | ) |  |                   |   |  | (75,000           | ) |  |              |   |  | (75,000       | )
|Commitment fees                                                                                                                    |  | (960,000           | ) |  |                   |   |  |                  |   |  |              |   |  |              |  
|Gain (Loss) on
      disposal of property and equipment                                                                            |  | (278,712           | ) |  | 817                |   |  |                  |   |  | 817           |   |  |              |  
|Loss on derivatives                                                                                                                |  | (29,797            | ) |  |                   |   |  | (38,583           | ) |  |              |   |  | (100,026      | )
|Gain on derecognition
      of convertible debentures,
                    
      promissory note and accrued interest (Note 9(b)) |  | 273,154            |   |  |                   |   |  |                  |   |  | 12,327        |   |  |              |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Total Other Expenses                                                                                                               |  | (2,713,248         | ) |  | (170,112           | ) |  | (193,220          | ) |  | (329,076      | ) |  | (377,745      | )
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Loss before cumulative effect of accounting
      change                                                                           |  | (59,444,456        | ) |  | (398,394           | ) |  | (779,265          | ) |  | (2,352,160    | ) |  | (3,031,467    | )
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Cumulative effect of accounting change                                                                                             |  | (99,481            | ) |  |                   |   |  |                  |   |  |              |   |  |              |  
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Net Loss                                                                                                                           |  | (59,543,937        | ) |  | (398,394           | ) |  | (779,265          | ) |  | (2,352,160    | ) |  | (3,031,467    | )
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Net Loss Per Share  Basic and Diluted                                                                                             |  |                    |   |  | (0.00              | ) |  | (0.00             | ) |  | (0.00         | ) |  | (0.00         | )
|                                                                                                                                   |  |                    |   |  |                    |   |  |                   |   |  |               |   |  |               |  
|Weighted Average Shares Outstanding                                                                                                |  |                    |   |  | 2,921,377,244      |   |  | 1,961,368,207     |   |  | 2,888,121,286 |   |  | 1,774,211,507 |  

The accompanying notes are an integral part of these
consolidated financial statements

6

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|SILVERADO GOLD MINES LTD.                        
|-------------------------------------------------
|(An Exploration Stage Company)                   
|CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|(Stated In United States Dollars)                

|                                                                                      |  | Accumulated From      |   |  |                   |   |  |            |  
|------------------------------------------------------------------------------------- |  | --------------------- | - |  | ----------------- | - |  | ---------- | -
|                                                                                      |  | December 1, 2001(Date |   |  |                   |   |  |            |  
|                                                                                      |  | of Recommencement of  |   |  |                   |   |  |            |  
|                                                                                      |  | Exploration Stage)    |   |  | Nine Months Ended |  
|                                                                                      |  | to August 31,         |   |  | August 31,        |  
|                                                                                      |  | 2011                  |   |  | 2011              |   |  | 2010       |  
|                                                                                      |  | $                     |   |  | $                 |   |  | $          |  
|                                                                                      |  |                       |   |  |                   |   |  |            |  
|Operating Activities                                                                  |  |                       |   |  |                   |   |  |            |  
|Net loss                                                                              |  | (59,543,937           | ) |  | (2,352,160        | ) |  | (3,031,467 | )
|Adjustments to
      reconcile net loss to cash used in operating activities:         |  |                       |   |  |                   |   |  |            |  
|Cumulative effect
      of accounting change                                          |  | 99,481                |   |  |                  |   |  |           |  
|Amortization of debt issue costs                                                      |  | 7,500                 |   |  |                  |   |  | 6,825      |  
|Depreciation and
      accretion                                                      |  | 3,022,986             |   |  | 78,975            |   |  | 163,642    |  
|Loss on disposal of property and equipment                                            |  | 279,529               |   |  |                  |   |  |           |  
|Stock-based
      compensation included in management fees                            |  | 3,375,644             |   |  |                  |   |  |           |  
|Stock issued for debenture                                                            |  | 217,687               |   |  |                  |   |  |           |  
|Stock issued for
      consulting and other expenses                                  |  | 7,796,962             |   |  | 885,893           |   |  | 811,266    |  
|Prepaid consulting fees expensed                                                      |  | 1,249,059             |   |  | 198,693           |   |  | 716,865    |  
|Stock issued for
      commitment fees                                                |  | 960,000               |   |  |                  |   |  |           |  
|Financing expense                                                                     |  | 252,003               |   |  |                  |   |  | 75,000     |  
|Accretion of
      discount on convertible debt                                       |  | 1,219,951             |   |  | 312,511           |   |  | 159,015    |  
|Loss on derivative                                                                    |  | 29,797                |   |  |                  |   |  | 100,026    |  
|Gain
      on derecognition of convertible debt, promissory note and accrued interest |  | (273,154              | ) |  | (12,327           | ) |  |           |  
|Impairment of mineral claim expenditures                                              |  | 1,159,529             |   |  |                  |   |  |           |  
|Impairment of
      property and equipment                                            |  | 329,679               |   |  |                  |   |  |           |  
|Impairment of leasehold improvements                                                  |  | 340,821               |   |  |                  |   |  |           |  
|Accretion on asset
      retirement obligation                                        |  | 56,894                |   |  | 21,189            |   |  | (2,411     | )
|Changes in operating
      assets and liabilities:                                    |  |                       |   |  |                   |   |  |            |  
|Cheques issued in
      excess of cash                                                |  | 6,970                 |   |  | 6,970             |   |  |           |  
|Gold inventory                                                                        |  | 8,633                 |   |  | 6,316             |   |  |           |  
|Prepaid expenses
      and deposits                                                   |  | (42,765               | ) |  | 3,811             |   |  | (10,139    | )
|Accounts payable and accrued liabilities                                              |  | 908,157               |   |  | 286,800           |   |  | 285,543    |  
|Advances to related party                                                             |  | 389,151               |   |  | (191,281          | ) |  | (117,131   | )
|Net Cash Used in Operating Activities                                                 |  | (38,149,423           | ) |  | (754,610          | ) |  | (842,966   | )
|Investing Activities                                                                  |  |                       |   |  |                   |   |  |            |  
|Purchase of restricted
      cash equivalent                                          |  | (9,189                | ) |  | (9,189            | ) |  |           |  
|Investment in mineral properties and
      rights                                     |  | (1,466,022            | ) |  | (99,080           | ) |  | (99,080    | )
|Purchase of property
      and equipment                                              |  | (3,139,830            | ) |  | (58,711           | ) |  | (1,206     | )
|Proceeds from sale of property and equipment, net                                     |  | 825,299               |   |  |                  |   |  |           |  
|Net Cash Used In Investing Activities                                                 |  | (3,789,742            | ) |  | (166,980          | ) |  | (100,286   | )
|Financing Activities                                                                  |  |                       |   |  |                   |   |  |            |  
|Repayment of loans
      payable                                                      |  | (110,728              | ) |  |                  |   |  |           |  
|Repayment of capital lease obligation                                                 |  | (1,131,607            | ) |  |                  |   |  |           |  
|Proceeds from issuance
      of convertible debt, net                                 |  | 570,000               |   |  |                  |   |  | 251,000    |  
|Proceeds from issuance of promissory
      notes                                      |  | 377,327               |   |  | 315,000           |   |  | 50,000     |  
|Share subscriptions
      received                                                    |  | 203,745               |   |  | 104,453           |   |  | 33,250     |  
|Proceeds from issuance of common stock,
      net                                     |  | 41,782,029            |   |  | 431,877           |   |  | 626,657    |  
|Proceeds from exercise of warrants                                                    |  | 231,807               |   |  | 4,494             |   |  |           |  
|Net Cash Provided
      By Financing Activities                                       |  | 41,922,573            |   |  | 855,824           |   |  | 960,907    |  
|Increase (Decrease) In Cash                                                           |  | (16,592               | ) |  | (65,766           | ) |  | 17,655     |  
|Cash - Beginning
      of Period                                                      |  | 17,093                |   |  | 66,267            |   |  |           |  
|Cash - End of Period                                                                  |  | 501                   |   |  | 501               |   |  | 17,655     |  
|                                                                                      |  |                       |   |  |                   |   |  |            |  
|Supplemental Disclosures                                                              |  |                       |   |  |                   |   |  |            |  
|Interest paid                                                                         |  |                       |   |  |                  |   |  | 73,830     |  
|Income taxes paid                                                                     |  |                       |   |  |                  |   |  |           |  

Supplemental Cash Flow Information (Note 19)

The accompanying notes are an integral part of these
consolidated financial statements

7

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|1. | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Silverado Gold Mines Ltd. (Silverado or the Company)
      was incorporated under the laws of British Columbia, Canada in June 1963.
      The Company is engaged in the exploration of mineral properties in the
      State of Alaska, through its wholly- owned subsidiary, Silverado Gold
      Mines Inc. (incorporated under the laws of the State of Alaska, U.S.A. on
      May 29, 1981) and in the research and development of low-rank coal-water
      fuel as a replacement fuel for oil fired boilers and utility generators
      through its other wholly-owned subsidiary, Silverado Green Fuel, Inc.
      (incorporated under the laws of the State of Alaska, U.S.A. on August 14,
      2006).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company is considered to be an Exploration Stage
      Company, as defined by Financial Accounting Standards Board (FASB)
      Accounting Standards Codification (ASC) 915, Development Stage
      Entities. Accumulated results of operations and cash flows are
      presented from December 1, 2001, the date the Company re-entered the
      exploration stage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The accompanying consolidated financial statements have
      been prepared assuming the Company will continue as a going concern, which
      implies that the Company would continue to realize its assets and
      discharge its liabilities in the normal course of business. The Company
      has never paid any dividends and is unlikely to pay dividends or generate
      earnings in the immediate or foreseeable future. As at August 31, 2011,
      the Company has a working capital deficiency of $2,912,329 and has
      accumulated losses of $108,448,881 since inception and its operations
      continue to be funded primarily from sales of its stock and the sale of
      gold extracted during exploration activities. These factors raise
      substantial doubt regarding the Companys ability to continue as a going
      concern. The ability of the Company to continue as a going concern,
      including completion of the acquisition, exploration and development of
      its mineral properties and completion of the research and development of
      its low-rank coal-water fuel project is dependent on the Companys ability
      to obtain the necessary financing from sales of its stock and debt
      financings. The consolidated financial statements do not include any
      adjustments to the recoverability and classification of recorded asset
      amounts and classification of liabilities that might be necessary should
      the Company be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company's plan for the 2011 exploration season for
      its Alaska operations is to drill further reserves and core analysis
      through a contracted diamond drill operation at the Nolan project and to
      use the Company's own smaller diamond drill core rig for preliminary
      exploration drilling on its Eagle Creek property 8 miles North of
      Fairbanks, Alaska. The Company intends to fund these activities through
      debt and equity financing arrangements, which may be insufficient to fund
      its capital expenditures, working capital and other cash requirements for
      the year ending November 30, 2011. There is no assurance that the Company
      will obtain the necessary financing to complete its objectives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

8

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------
|   |                                                           
|   | b)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | c)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | d)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | e)                                                        
|   |                                                           
|   |                                                           

Mining equipment
    10 yearsAuto and trucks
    5 yearsComputer equipment
    3 yearsComputer software
    1 yearLeasehold improvements
    5  7 yearsFurniture and fittings
    10 years


| | f) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | FASB ASC 820, Fair Value Measurements and
      Disclosures, defines fair value, establishes a framework for measuring
      fair value under generally accepted accounting principles and enhances
      disclosures about fair value measurements. Fair value is defined as the
      price that would be received to sell an asset or paid to transfer a
      liability in an orderly transaction between market participants at the
      measurement date. Valuation techniques used to measure fair value, as
      required by ASC 820, must maximize the use of observable inputs and
      minimize the use of unobservable inputs.                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Companys assessment of the significance of a
      particular input to the fair value measurements requires judgment, and may
      affect the valuation of the assets and liabilities being measured and
      their placement within the fair value hierarchy. The carrying values of
      cash, other receivables, accounts payable, mineral claims royalty payable,
      promissory notes, and due to related parties approximate fair values
      because of the short-term maturity of these instruments. The carrying
      amount reported in the balance sheet for convertible debt approximates
      fair value based on current market rates for similar financial
      instruments. Unless otherwise noted, it is managements opinion that the
      Company is not exposed to significant interest, currency or credit risks
      arising from these financial instruments.

9

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------
|   |                                                           
|   | g)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | h)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | i)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | j)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | k)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | l)                                                        
|   |                                                           
|   |                                                           

10

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------
|   |                                                           
|   | m)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   |                                                           
|   |                                                           
|   | n)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | o)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | p)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | q)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | r)                                                        
|   |                                                           
|   |                                                           

11

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|2. | Summary of Significant Accounting Policies
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | s)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Gold Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Companys test production in past years has yielded
      gold dust and gold nuggets. Gold dust has yielded sales prices equivalent
      to the spot gold price. Gold nuggets, however, are considered to be gem or
      jewelry items, which in the industry sell at a higher price than the spot
      price. They are valued according to weight, purity, character, and
      relative flatness (wearing quality). Historically, the Companys gold
      nuggets have sold at prices above the spot gold price. The following is a
      summary of gold inventory changes during the nine months ended August 31,
      2011, and during the fiscal year ended November 30,
2010:

| |                                 |  |                   |   |   | Weighted      |   |   |       | 
| | ------------------------------- |  | ----------------- | - | - | ------------- | - | - | ----- | 
| |                                 |  | Troy
      Ounces |   |   | Average Price |   |   | Value | 
| |                                 |  |                   |   |   |               |   |   |       | 
| | Balance as of November 30, 2009 |  | 10                |   | $ | 657.50        |   | $ | 6,316 | 
| | Cost of gold sold               |  |                  |   |   |              |   |   |      | 
| | Balance as of November 30, 2010 |  | 10                |   | $ | 657.50        |   | $ | 6,316 | 
| | Cost of gold sold               |  | (10               | ) |   | (657.50       | ) |   | 6,316 | 
| | Balance as of August 31, 2011   |  |                  |   | $ |              |   | $ |      | 

|4. | Prepaid Expenses and Other Receivables Prepaid expenses
      and other receivables consist of:
|-- | -----------------------------------------------------------------------------------------------

| |                                                                       |   | August 31, 2011 |  |   | November 30, 2010 | 
| | --------------------------------------------------------------------- | - | --------------- |  | - | ----------------- | 
| |                                                                       |   |                 |  |   |                   | 
| | Prepaid consulting and other fees resulting
      from share issuance | $ | 2,605           |  | $ | 223,193           | 
| | Shares issued for attorney retainer                                   |   | 92,500          |  |   | 48,000            | 
| | Total prepaid expenses resulting from share
      issuance            |   | 95,105          |  |   | 271,193           | 
| | Insurance deposits, GST refund and others                             |   | 41,389          |  |   | 45,200            | 
| | Total                                                                 | $ | 136,494         |  | $ | 316,393           | 

12

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|5. | Restricted Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has pledged a $9,189 (Cdn$9,000) GIC as
      security held on a corporate credit card.                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6. | Mineral Properties and Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company holds interests in four groups of mineral
      properties, Nolan, Ester Dome, Hammond and Eagle Creek, in Alaska, U.S.A.
      All of these properties are in the exploration stage and have no proven
      reserves as of August 31, 2011. The Nolan property has a probable reserve;
      however, a more extensive feasibility study is required to ascertain if
      such probable reserve can be classified as a proven reserve.                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Since the Company has no proven reserves on its
      properties as of August 31, 2011, the Company does not amortize the
      capitalized mineral costs, but evaluates the capitalized mineral costs
      periodically for impairment in accordance with ASC 360 and has not
      recognized any impairment. A summary of such capitalized direct costs for
      the nine months ended August 31, 2011, and for the fiscal year ended
      November 30, 2010 is as follows:

| |                                       |   | Nolan   |  |   | Ester Dome |  |   | Hammond |  |   | Eagle Creek |  |   | Total     | 
| | ------------------------------------- | - | ------- |  | - | ---------- |  | - | ------- |  | - | ----------- |  | - | --------- | 
| |                                       |   | (a)     |  |   | (b)        |  |   | (c)     |  |   | (d)         |  |   |           | 
| | Balance as of November 30, 2009       | $ | 743,859 |  | $ | 40,702     |  | $ | 525,900 |  | $ | 88,140      |  | $ | 1,398,601 | 
| | Additions during the year:            |   |         |  |   |            |  |   |         |  |   |             |  |   |           | 
| | Claim fees paid during
      the year |   | 85,953  |  |   | 9,398      |  |   | 8,400   |  |   | 13,090      |  |   | 116,841   | 
| | Royalty payment                       |   |        |  |   |           |  |   |        |  |   | 5,000       |  |   | 5,000     | 
| | Accrued royalty payment               |   |        |  |   |           |  |   | 80,000  |  |   |            |  |   | 80,000    | 
| | Balance as of November 30, 2010       |   | 829,812 |  |   | 50,100     |  |   | 614,300 |  |   | 106,230     |  |   | 1,600,442 | 
| | Additions during the period:          |   |         |  |   |            |  |   |         |  |   |             |  |   |           | 
| | Claim fees paid during the period     |   | 85,540  |  |   | 140        |  |   | 8,400   |  |   |            |  |   | 94,080    | 
| | Royalty payment                       |   |        |  |   |           |  |   |        |  |   | 5,000       |  |   | 5,000     | 
| | Accrued royalty payment               |   |        |  |   |           |  |   | 60,000  |  |   |            |  |   | 60,000    | 
| | Balance as of August 31, 2011         | $ | 915,352 |  | $ | 50,240     |  | $ | 682,700 |  | $ | 111,230     |  | $ | 1,759,522 | 

| | a) | Nolan Gold Project, Wiseman Mining District,
  Alaska                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Nolan Gold Project consists of 5 contiguous claim
      groups covering approximately 6 square miles, 8 miles west of Wiseman and
      175 miles north of Fairbanks, Alaska. In addition, The Clara Creek and
      Marion Creek claim groups are located approximately 1.5 and 3 miles north
      of Coldfoot, Alaska, and are situated near the Dalton Highway. Both Clara
      Creek and Marion Creeks are left limit tributaries to the Middle Fork of
      the Koyukuk River.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In total, the Company owns a 100% interest in 204 federal
      placer mining claims and 407 federal lode claims in the Nolan Gold
      Project. The specific claim groups at this site are as
  follows:                                                                                                                                                                                                                                                                                

| | i)   | Nolan Placer: This claim group consists of 148 unpatented
      federal placer claims.                                                                            
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                   
| | ii)  | Thompsons Pup: This claim group consists of 6 unpatented
      federal placer claims and is subject to a royalty of 3% of net profits on
      80% of production.
| |      |                                                                                                                                                                   
| | iii) | Dionne (Marys Bench): This claim group consists of 15
      unpatented federal placer claims.                                                                    
| |      |                                                                                                                                                                   
| | iv)  | Smith Creek: This claim group consists of 28 unpatented
      federal placer claims.                                                                              

13

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|6. | Mineral Properties and Rights
  (continued)
|-- | -------------------------------------------

| | v)  | Marion Creek and Clara Creek: This claim group consists
      of 2 unpatented federal placer mining claims located on Marion Creek and 5
      unpatented federal placer mining claims located on Clara Creek.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                               
| | vi) | Nolan Lode: this claim group consists of 407 unpatented
      federal lode claims.                                                                                                                            

| |    | The Company currently is in a transitional phase between
      exploration and development on this property. The preliminary feasibility
      study, effective January 1, 2009 and amended on June 1, 2009 to reflect
      additional data, supported a probable mineral reserve of antimony and gold
      underlying the southwestern portion of the Solomon Shear Zone, an area
      referred to by the Company as Workmans Bench.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b) | Ester Dome Gold Project, Fairbanks Mining District,
      Alaska                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The Ester Dome Gold Project encompasses all of the
      Companys properties on Ester Dome, which is accessible by road 10 miles
      northwest of Fairbanks, Alaska. This property consists of 1 unpatented
      Federal claim and 52 state mineral claims. The specific properties at this
      site are as follows:                                                                                                               

| | i)   | Grant Mine: This property consists of 26 state mineral
      claims subject to payments of 15% of net profits until $2,000,000 has been
      paid and a royalty payment of 3% of net profits thereafter. The mill has
      remained inactive since February 1989 and the plant and equipment cost was
      written down on our accounting records. During fiscal 2009, the work on
      Grant Mine was limited to assessment work. Upon payment of the $2,000,000,
      the titles of the mineral claims will be transferred.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ii)  | May (St. Paul)/Barelka: This gold property consists of 22
      state mineral claims subject to payments of 15% of net profits until
      $2,000,000 has been paid and a royalty payment of 3% of net profits
      thereafter.                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | iii) | Dobbs: This leased property consists of 1 unpatented
      Federal mineral claim and 4 State mineral claims subject to payments of
      15% of net profits until $1,500,000 has been paid and 3% of net profits
      thereafter.                                                                                                                                                                                                                                                                                               

| |    | The Company has maintained claim rental payments and
      continued with assessment work for this property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | c) | Hammond Property, Wiseman Mining District,
  Alaska                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | This property consists of 24 Federal placer claims and 36
      Federal lode claims covering one and one-half square miles and adjoining
      the Nolan Gold Properties. The Company has leased this property from
      Alaska Mining Company, Inc. (Alminco) since December 14, 1994 and is
      obligated to pay a royalty equal to 10% of gross production and is subject
      to a minimum royalty of $80,000 per year. As of August 31, 2011, the
      capitalized mineral rights of $682,700 (November 30, 2010 - $614,300) for
      the Hammond property includes royalty accruals totalling $610,000
      (November 30, 2010 - $550,000) that are unpaid, and are included in
      mineral claims payable on the accompanying consolidated balance sheets.
      During the nine months ended August 31, 2011, the Company accrued $60,000
      in payable royalties.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | d) | Eagle Creek Property, Fairbanks Mining District,
      Alaska                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | This property consists of 77 state mineral claims. All
      claims are contiguous and are located in the Fairbanks North Star Borough.
      The Company owns a 50% interest and has an option to purchase a full 100%
      interest in the property for $400,000, towards which $33,000 remains to be
      paid. This property is subject to a royalty of 15% of net profits. A
      payment in the amount of $5,000 is due on August 1st of each year until
      the remaining $33,000 is paid. Such yearly payment is required to keep the
      option in good standing. Ownership of the claims is in the name of the
      Companys subsidiary, Silverado Gold Mines Inc. On August 1, 2011, the
      Company paid the required $5,000 option payment.                                                                                                                     

14

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|7. | Property and Equipment                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                   
|   | Property and equipment primarily include capital
      expenditures associated with the Companys corporate office, and mining
      equipment and camp facilities at the Nolan Gold Project in Alaska.
      Depreciation expense for the nine months ended August 31, 2011, was
      $78,976 (2010 - $163,642).
|   |                                                                                                                                                                                                                                                                                                                   
|   | A summary of the Companys property and equipment as of
      August 31, 2011, and November 30, 2010, is as
follows:                                                                                                                                                                                              

| |                                       |  |           |  |  |              |  |  | August 31,   |  |  | November 30, | 
| | ------------------------------------- |  | --------- |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                                       |  |           |  |  |              |  |  | 2011         |  |  | 2010         | 
| |                                       |  |           |  |  | Accumulated  |  |  | Net Carrying |  |  | Net Carrying | 
| |                                       |  | Cost      |  |  | Depreciation |  |  | Value        |  |  | Value        | 
| |                                       |  | $         |  |  | $            |  |  | $            |  |  | $            | 
| |                                       |  |           |  |  |              |  |  |              |  |  |              | 
| | Offices                               |  |           |  |  |              |  |  |              |  |  |              | 
| | Office leasehold improvements         |  | 124,123   |  |  | 6,420        |  |  | 117,703      |  |  |             | 
| | Computer equipment and
      software |  | 140,079   |  |  | 137,836      |  |  | 2,243        |  |  | 3,951        | 
| | Furniture and fittings                |  | 394,559   |  |  | 391,060      |  |  | 3,499        |  |  | 3,725        | 
| |                                       |  |           |  |  |              |  |  |              |  |  |              | 
| | Mining Project                        |  |           |  |  |              |  |  |              |  |  |              | 
| | Nolan gold project
      buildings    |  | 63,000    |  |  | 63,000       |  |  |             |  |  |             | 
| | Leasehold improvements                |  | 48,123    |  |  | 38,499       |  |  | 9,624        |  |  | 16,843       | 
| | Nolan mining equipment                |  | 1,017,987 |  |  | 641,265      |  |  | 376,722      |  |  | 435,735      | 
| | Auto and trucks                       |  | 19,193    |  |  | 12,155       |  |  | 7,038        |  |  | 9,917        | 
| | Assets under construction             |  | 24,245    |  |  |             |  |  | 24,245       |  |  | 24,245       | 
| |                                       |  | 1,831,309 |  |  | 1,290,235    |  |  | 541,074      |  |  | 494,416      | 

|   | Assets under construction are not subject to depreciation
      until substantially complete.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|8. | Tenant Inducement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On May 1, 2011, the Company received advances of $70,956
      (Cdn$69,494) from the landlord of its office towards leasehold
      improvements as an inducement to enter into the lease agreement described
      in Note 17(c). The advances are repayable in full should the Company
      terminate the lease early without the consent of the landlord. During the
      nine months ended August 31, 2011, the Company repaid principal amount of
      $4,033 (Cdn$3,950) and the remaining balance of the tenant inducement was
      $66,923 at August 31, 2011.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9. | Promissory Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

15

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|10. | Convertible Debt
|--- | ----------------
|    |                 
|    | a)              
|    |                 
|    |                 
|    |                 
|    |                 
|    |                 
|    |                 
|    |                 
|    | b)              
|    |                 
|    |                 
|    |                 
|    |                 
|    |                 
|    |                 

16

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|10. | Convertible Debt (continued)
|--- | ----------------------------
|    |                             
|    | c)                          
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    | d)                          
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    | e)                          

17

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|10. | Convertible Debt (continued)
|--- | ----------------------------

Pursuant to ASC 470-20-25, the Company
recognized the intrinsic value of the embedded beneficial conversion feature of
$23,189 as additional paid-in capital and an equivalent discount that reduced
the carrying value of the convertible debenture to $11,663. The discount is
being expensed over the term of the loan to increase the carrying value to the
face value of the loan.

On December 7, 2010, the Company
issued 16,596,171 unrestricted shares of common stock upon the conversion of the
note. In accordance with ASC 470-20, the Company recognized unamortized discount
of $23,189 as interest expense.

|11. | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Asset retirement obligations relate to the closure and
      reclamation of the Grant Mill Tailings Pond and the Mill complex, and to
      the reclamation work associated with the Nolan Gold Project consisting of
      dismantling and removal of site structures and equipment, and reshaping
      and re-vegetating the disturbed areas. The Company has no assets legally
      restricted for purposes of settling asset retirement obligations. A
      summary of assets retirement obligation for the nine months ended August
      31, 2011, and for the fiscal year ended November 30, 2010, is as
      follows:

Grant
    
    
    NolanMine
    
    
    Project
    
    
    TotalBalance as of November 30, 2009
    $
    368,884
    
    $
    171,523
    
    $
    540,407Accretion expense
    
    18,444
    
    
    8,576
    
    
    27,020Liabilities settled
    
    (1,511
    )
    
    (900
    )
    
    (2,411
    )Balance as of November 30, 2010
    $
    385,817
    
    $
    179,199
    
    $
    565,016Accretion expense
    
    14,469
    
    
    6,720
    
    
    21,189Liabilities settled
    
    
    
    
    
    
    
    Balance as of August 31, 2011
    $
    400,286
    
    $
    185,919
    
    $
    586,205


| | a) | Grant Mine                                                                                                                                                                                                                                                                                                                                                                
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Grant Mine is not an active mine and related assets
      were written off as impaired effective December 1, 2001. The retirement
      obligations associated with the Grant Mine involves the decommissioning of
      the Grant Mill Tailings Pond and the Mill complex that was built in the
      early 1980s and no longer used after 1989.                     
| |    |                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company has retained a geotechnical and environmental
      consulting firm to assist with a preliminary report for the closure of the
      tailings pond. The preliminary report is part of the closure plan, and
      further reclamation work involves another closure phase that needs permits
      and/or approval by the State of Alaska regulatory agencies.
| |    |                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company believes that the estimated fair value of the
      cost of reclamation at this time will approximate the accrued obligations
      plus 5% accretion expense per annum until reclaimed. During the nine
      months ended August 31, 2011, the Company recorded $14,469 (2010 -
      $13,833) accretion expense.                                           

18

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|11. | Asset Retirement Obligations (continued)
|--- | ----------------------------------------
|    |                                         
|    | b)                                      
|    |                                         
|    |                                         
|    |                                         
|    |                                         
|    |                                         
|    |                                         
|    |                                         
|12. | Related Party Transactions / Balances   
|    |                                         
|    | a)                                      
|    |                                         
|    |                                         
|    |                                         
|    |                                         
|    |                                         
|    |                                         

| |                                                                         |   | Nine months     |  |   | Nine months     | 
| | ----------------------------------------------------------------------- | - | --------------- |  | - | --------------- | 
| |                                                                         |   | ended           |  |   | ended           | 
| |                                                                         |   | August 31, 2011 |  |   | August 31, 2010 | 
| |                                                                         |   |                 |  |   |                 | 
| | Administration and management services                                  | $ | 51,596          |  | $ | 130,702         | 
| |                                                                         |   |                 |  |   |                 | 
| | Amount of total charges in excess of the
      cost                     | $ | 7,678           |  | $ | 17,048          | 
| | Percentage of excess of the cost charged over total amount
      billed |   | 14.88%          |  |   | 13.04%          | 

| | b) | As of August 31, 2011, the Company owed $3,102 (November
      30, 2010  $3,120) to the President of the Company for amounts advanced.
      The advances are due on demand, unsecured, and non-interest
  bearing.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|12. | Related Party Transactions / Balances
  (continued)                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                      
|    | c)                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                      
|    | d)                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                      
|    | e)                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                      
|13. | Common Stock                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                      
|    | The authorized common stock of the Company consists of an
      unlimited number of common shares, without par value. The following is a
      summary of the Companys issuances of common stock during the nine months
      ended August 31, 2011:

| |                                                                                                                                                 |  | Number of     |  |  | Common       |   |  | Shares to |  
| | ----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- |  |  | ------------ | - |  | --------- | -
| |                                                                                                                                                 |  | Common Shares |  |  | Stock Amount |   |  | be Issued |  
| |                                                                                                                                                 |  | #             |  |  | $            |   |  | $         |  
| | Balance as of November 30, 2010                                                                                                                 |  | 2,441,343,879 |  |  | 103,999,508  |   |  | 207,716   |  
| | Share Issued:                                                                                                                                   |  |               |  |  |              |   |  |           |  
| | For Private Placements                                                                                                                          |  |               |  |  |              |   |  |           |  
| | $0.004 per share                                                                                                                                |  | 75,000,000    |  |  | 300,000      |   |  |          |  
| | $0.0021 per unit (1
      unit = 1 share and 1 warrant)                                                                                         |  | 100,000,000   |  |  | 210,000      |   |  | (78,000   | )
| |                                                                                                                                                 |  | 175,000,000   |  |  | 510,000      |   |  | (78,000   | )
| | For Warrant Exercises                                                                                                                           |  |               |  |  |              |   |  |           |  
| | $0.00233 per share                                                                                                                              |  | 1,928,572     |  |  | 4,494        |   |  |          |  
| | For Conversion of Debentures                                                                                                                    |  |               |  |  |              |   |  |           |  
| | $0.0021 per share                                                                                                                               |  | 40,405,695    |  |  | 84,852       |   |  |          |  
| | $0.002184 per share                                                                                                                             |  | 11,446,887    |  |  | 25,000       |   |  |          |  
| |                                                                                                                                                 |  | 51,852,582    |  |  | 109,852      |   |  |          |  
| | Shares granted under Equity Compensation
      Plans                                                                                            |  |               |  |  |              |   |  |           |  
| | For consulting fees granted at a
      weighted average price of $0.00372 per share                                                             |  | 230,468,002   |  |  | 835,000      |   |  |          |  
| | For investor
      relation and shareholder communication services
             granted at a weighted average
      price of $0.00346 per share |  | 8,536,084     |  |  | 29,536       |   |  |          |  
| | For legal and other services
      granted at a weighted average price of $0.00359 per share                                                    |  | 12,248,125    |  |  | 43,962       |   |  |          |  
| |                                                                                                                                                 |  | 251,252,211   |  |  | 908,498      |   |  |          |  
| | Reclassification of beneficial conversion features on
      conversions of convertible debt                                                     |  |              |  |  | 52,410       |   |  |          |  
| | Stock issuance costs                                                                                                                            |  |              |  |  | (123         | ) |  |          |  
| | Stock subscriptions received                                                                                                                    |  |              |  |  |             |   |  | 104,453   |  
| | Shares issuable for services                                                                                                                    |  |              |  |  |             |   |  | 17,502    |  
| | Balance as of August 31, 2011                                                                                                                   |  | 2,921,377,244 |  |  | 105,584,639  |   |  | 251,671   |  

20

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|13. | Common Stock (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|14. | Equity Compensation Plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On June 3, 2010, the Company adopted the 2010-I Equity
      Compensation Plan (the 2010-I Plan) to encourage certain directors,
      officers, employees, and consultants of the Company to acquire and hold
      stock in the Company as an added incentive to remain with the Company and
      to increase their efforts in promoting the interests of the Company and to
      enable the Company to attract and retain capable individuals. The number
      of shares issued under the 2010-I Plan August not exceed 180,000,000 in
      aggregate. On June 9, 2010, the Company filed a registration statement on
      Form S-8 to register all 180,000,000 of such shares.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On December 2, 2010, the Company adopted the 2010-II
      Equity Compensation Plan to encourage certain directors, officers,
      employees, and consultants of the Company to acquire and hold stock in the
      Company as an added incentive to remain with the Company and to increase
      their efforts in promoting the interests of the Company and to enable the
      Company to attract and retain capable individuals. The number of shares
      issued under the 2010-II Plan August not exceed 400,000,000 in aggregate.
      On December 2, 2010, the Company filed a registration statement on Form
      S-8 to register all 400,000,000 of such shares.          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | During the nine months ended August 31, 2011, the Company
      issued an aggregate of 251,252,211 (2010  185,208,799) shares of common
      stock under the Companys Equity Compensation Plans in payment of
      consulting and other services.                                                                                                                                                                                                                                                                                                                                                                                                                                    

21

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|15. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | There were no stock options granted during the nine
      months ended August 31, 2011. The Company uses the Black- Scholes option
      pricing model to calculate the fair value of stock options when the
      options are granted. Expected volatility is based on historical
      volatility. Because trading tends to be thin, in relation to the total
      shares outstanding, average weekly stock prices were used to calculate
      volatility. Management believes that the annualized weekly average of
      volatility is the best measure of expected volatility. U.S. Treasury
      constant maturity rates were utilized with maturities most closely
      approximating the expected term of the option. The expected term of the
      options was calculated using the alternative simplified method, which
      defines the expected life as the average of the contractual term of the
      options and the weighted average vesting period for all option
      tranches.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The following table summarizes the continuity of the
      Companys stock options:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                                    |  |             |   |  |          |   |  | Weighted-        |  |  |           | 
| | ---------------------------------- |  | ----------- | - |  | -------- | - |  | ---------------- |  |  | --------- | 
| |                                    |  |             |   |  | Weighted |   |  | Average          |  |  |           | 
| |                                    |  | Number      |   |  | Average  |   |  | Remaining        |  |  |           | 
| |                                    |  | of          |   |  | Exercise |   |  | Contractual Term |  |  | Intrinsic | 
| |                                    |  | Options     |   |  | Price    |   |  | (years)          |  |  | Value     | 
| |                                    |  |             |   |  | $        |   |  |                  |  |  |           | 
| | Outstanding, November 30, 2009     |  | 48,200,000  |   |  | 0.056    |   |  | 2.72             |  |  |           | 
| | Cancelled                          |  | (3,900,000  | ) |  | (0.058   | ) |  |                  |  |  |           | 
| | Outstanding, November 30, 2010     |  | 44,300,000  |   |  | 0.056    |   |  | 1.68             |  |  |          | 
| | Cancelled                          |  | (5,000,000  | ) |  | (0.058   | ) |  |                  |  |  |           | 
| | Expired                            |  | (11,600,000 | ) |  | (0.050   | ) |  |                  |  |  |           | 
| | Outstanding,
      August 31, 2011 |  | 27,700,000  |   |  | 0.058    |   |  | 1.36             |  |  |          | 

As at August 31, 2011, the following
common stock options were outstanding and exercisable:

RemainingContractualExercise Price
    Life (years)Number of Options$17,000,000
    0.05
    1.3510,700,000
    0.07
    1.3727,700,000


22

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|16. | Stock Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | During the nine months ended August 31, 2011, 101,749,051
      stock purchase warrants, exercisable at weighted average exercise price of
      $0.009 per share, expired. The Company issued 100,000,000 common stock
      purchase warrants upon the completion of a private placement during the
      nine months ended August 31, 2011. Each common stock purchase warrant
      issued during the period is exercisable into one share of common stock for
      a period of one year commencing from the date of the subscription
      agreement. There was no value assigned to these warrants when they were
      issued. During the nine month period ended August 31, 2011, the Company
      issued 1,928,572 shares of common stock upon the exercise of stock
      purchase warrants for gross proceeds of $4,494.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | A summary of the changes in the Companys common share
      purchase warrants is presented below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Weighted AverageNumber
    
    
    Exercise Price$Balance November 30, 2009
    
    84,900,000
    
    
    0.020Issued
    
    172,307,324
    
    
    0.0079Exercised
    
    (82,917,550
    )
    
    0.0027Expired
    
    (48,000,000
    )
    
    0.020Balance November 30, 2010
    
    126,289,774
    
    
    0.010Issued
    
    100,000,000
    
    
    0.01Exercised
    
    (1,928,572
    )
    
    0.00233Expired
    
    (101,749,051
    )
    
    0.009Balance August 31, 2011
    
    122,612,151
    
    
    0.00356


As at August 31, 2011, the following
common share purchase warrants were outstanding:

RemainingContractual LifeExercise Price
    (years)Number of Warrants$22,612,151
    0.01
    0.02 - 0.15100,000,000
    0.0021
    0.27122,612,151


|17. | Commitments
|--- | -----------
|    |            
|    | a)         

23

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|17. | Commitments (continued)
|--- | -----------------------
|    |                        
|    | b)                     
|    |                        
|    | c)                     

Three months ending November 30, 2011
    $
    23,445
      (Cdn$22,962)Fiscal year ending November 30, 2012
    
    93,780 (Cdn$91,848)Fiscal year ending November 30, 2013
    
    94,354
      (Cdn$92,410)Fiscal year ending November 30, 2014
    
    97,223 (Cdn$95,220)Fiscal year ending November 30, 2015
    
    97,223
      (Cdn$95,220)Fiscal year ending November 30, 2016
    
    32,408 (Cdn$31,740)$
    438,433 (Cdn$429,400)


| | d) | On November 26, 2010, the Company entered into three year
      equipment lease that expires on November 30, 2013. The lease payment for
      the first 35 months will be $2,553 (Cdn$2,500) and the last month will be
      $1,645 (Cdn$1,611). The lease is secured by the leased
equipment.                                                                                                                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | e) | On April 1, 2011, the Company entered into 1 year
      consulting agreement in which the Company will issue shares of the
      Companys common stock equal in value to Cdn$6,000 plus GST at the average
      price over the immediate 20 preceding days payable on the 20thof each month, for an aggregate maximum of 6,000,000 shares of
      common stock if the consulting services are provided for the full term of
      this agreement.

|18. | Segment Disclosures
|--- | -------------------

The Company operates in one reportable
segment, located in United States, being the acquisition and exploration of
mineral properties. The Companys development of low-rank coal-water fuel,
located in United States, is in its initial stages and is not a reportable
segment. Segmented information has been compiled based on the geographic regions
that the Company and its subsidiaries registered and performed exploration and
administration activities. Long-lived assets by geographical segment as of
August 31, 2011 and November 30, 2010 are as follows:

| |                                     |   | Canada  |  |   | United States |  |   | Total     | 
| | ----------------------------------- | - | ------- |  | - | ------------- |  | - | --------- | 
| | As of August 31, 2011               |   |         |  |   |               |  |   |           | 
| | Mineral properties and rights       |   | -       |  |   | 1,759,522     |  |   | 1,759,522 | 
| | Property and equipment              |   | 123,444 |  |   | 417,630       |  |   | 541,074   | 
| |                                     | $ | 123,444 |  | $ | 2,177,152     |  | $ | 2,300,596 | 
| |                                     |   |         |  |   |               |  |   |           | 
| | As of November 30, 2010             |   |         |  |   |               |  |   |           | 
| | Mineral properties and
      rights |   | -       |  |   | 1,600,442     |  |   | 1,600,442 | 
| | Property and equipment              |   | 7,676   |  |   | 486,740       |  |   | 494,416   | 
| |                                     | $ | 7,676   |  | $ | 2,087,182     |  | $ | 2,094,858 | 

24

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|19. | Supplemental Cash Flow Information                                                                                                                                                                                                                                                      
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                         
|    | Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the cash flow
      statements. A summary of non-cash transactions and other cash information
      for the nine months ended August 31, 2011 and 2010 is as
  follow:

| |                                                                               |  | Nine Months Ended | 
| | ----------------------------------------------------------------------------- |  | ----------------- | 
| |                                                                               |  | August 31,        | 
| |                                                                               |  | 2011              | 
| |                                                                               |  | $                 | 
| | Changes in non-cash financing and investing
      activities:                 |  |                   | 
| | Common stock issued on conversion of
      convertible debentures             |  | 109,852           | 
| | Mineral claims
      royalty payable changes at period-end for mineral rights |  | 60,000            | 
| | Convertible debenture issued on
      repayment of accounts payable           |  | 34,852            | 
| | Tenant inducement                                                             |  | 66,923            | 

|20. | Fair Value Measurements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | ASC 820, Fair Value Measurements and Disclosures,requires an entity to maximize the use of observable inputs and
      minimize the use of unobservable inputs when measuring fair value. ASC 820
      establishes a fair value hierarchy based on the level of independent,
      objective evidence surrounding the inputs used to measure fair value. A
      financial instruments categorization within the fair value hierarchy is
      based upon the lowest level of input that is significant to the fair value
      measurement. ASC 820 prioritizes the inputs into three levels that may be
      used to measure fair value:

Level 1

Level 1 applies to assets or
liabilities for which there are quoted prices in active markets for identical
assets or liabilities. Valuations are based on quoted prices that are readily
and regularly available in an active market and do not entail a significant
degree of judgment.

Level 2

Level 2 applies to assets or
liabilities for which there are other than Level 1 observable inputs such as
quoted prices for similar assets or liabilities in active markets; quoted prices
for identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.

Level 2 instruments require more
management judgment and subjectivity as compared to Level 1 instruments. For
instance: determining which instruments are most similar to the instrument being
priced requires management to identify a sample of similar securities based on
the coupon rates, maturity, issuer, credit rating and instrument type, and
subjectively select an individual security or multiple securities that are
deemed most similar to the security being priced; and determining whether a
market is considered active requires management judgment.

Level 3

Level 3 applies to assets or
liabilities for which there are unobservable inputs to the valuation methodology
that are significant to the measurement of the fair value of the assets or
liabilities. The determination of fair value for Level 3 instruments requires
the most management judgment and subjectivity.

Pursuant to ASC 825, cash is based on
"Level 1" inputs and due to related parties, promissory notes and convertible
debt are valued based on Level 2 inputs, consisting of model driven
valuations. The Company believes that the recorded values of these financial
instruments, other receivables and accounts payable approximate their current
fair values because of their nature, respective relatively short durations or
current market rates for similar financial instruments.

25

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|20. | Fair Value Measurements (continued)                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                             
|    | Assets measured at fair value on a recurring basis were
      presented on the Companys consolidated balance sheet as of August 31,
      2011, as follows.

Fair Value Measurements UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    SignificantFor Identical
    
    
    Observable
    
    
    Unobservable
    
    
    Balance as ofInstruments
    
    
    Inputs
    
    
    Inputs
    
    
    August 31,(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2011$
    
    
    $
    
    
    $
    
    
    $Assets:Cash
    
    501
    
    
    
    
    
    
    
    
    501


As at August 31, 2011, there were no
liabilities measured at fair value on a recurring basis presented on the
Companys consolidated balance sheet.

|21. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|22. | Restatement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | During the year ended November 30, 2010, the Company
      identified an error relating to the accounting for the convertible debt
      described in Note 8(a) in its financial statements included in the
      Companys Form 10-K filed with the SEC on March 12, 2010. The Company had
      previously separately accounted for the liability and equity components of
      convertible debentures to reflect the fair value of the liability
      component based on the Companys non-convertible borrowing cost at the
      issuance date. The value attributed to the conversion feature of the
      convertible note was included in additional paid-in capital on the
      consolidated balance sheet. Debt issuance costs of $7,500 and shares
      issued with the convertible debt valued at $80,000 were expensed in the
      statement of operations. After further review, the Company has determined
      that the proceeds should have been allocated based on the relative fair
      values of the convertible note and the shares at time of issuance, the
      resulting beneficial conversion of the convertible note recorded in
      additional paid-in capital, and debt issuance costs capitalized as
      deferred charges and amortized over the term of the convertible
    debt.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company also identified an error related to the
      accounting for the convertible debt described in Note 8(a)(i) in its
      financial statements included in the Companys Form 10-Q filed with the
      SEC on October 20, 2010. The Company had previously separately accounted
      for the liability and equity components of convertible debentures to
      reflect the fair value of the liability component based on the Companys
      non-convertible borrowing cost at the issuance date. The value attributed
      to the conversion feature of the convertible note was included in
      additional paid-in capital on the consolidated balance sheet. After
      further review, the Company has determined that the conversion option
      should be separated from the host contract and accounted for as a
      derivative at time of issuance, the conversion feature classified as
      liability and measured at fair value with changes in fair value recorded
      in the statement of operations.                                                                                                                                                                                                                                                                                 

26

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|22. | Restatement (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company also identified an error related to the
      accounting for the convertible debt described in Note 8(a)(ii) in its
      financial statements included in the Companys Form 10-Q filed with the
      SEC on October 20, 2010. The Company had previously separately accounted
      for the liability and equity components of convertible debentures to
      reflect the fair value of the liability component based on the Companys
      non-convertible borrowing cost at the issuance date. The value attributed
      to the conversion feature of the convertible note was included in
      additional paid-in capital on the consolidated balance sheet. Origination
      fee of $5,000 paid to the note holder and shares issued with the
      convertible debt valued at $61,100 were expensed in the statement of
      operations. After further review, the Company has determined that the
      proceeds should have been allocated based on the relative fair values of
      the convertible note and the shares at time of issuance, the resulting
      beneficial conversion of the convertible note recorded in additional
      paid-in capital, and origination fee recorded as a reduction to the
      proceeds received by the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company also identified an error related to the
      accounting for the convertible debts described in Note 8(a)(iii) in its
      financial statements included in the Companys Form 10-Q filed with the
      SEC on October 20, 2010. The Company had previously separately accounted
      for the liability and equity components of convertible debentures to
      reflect the fair value of the liability component based on the Companys
      non-convertible borrowing cost at the issuance date. The value attributed
      to the conversion feature of the convertible note was included in
      additional paid-in capital on the consolidated balance sheet. Origination
      fee of $15,000 paid to the note holders were recorded as a reduction to
      the proceeds received by the Company. Shares issued to the note holders
      valued at $135,000 were expensed in the statement of operations. After
      further review, the Company has determined that the proceeds should have
      been allocated based on the relative fair values of the convertible note
      and the shares at time of issuance, and the resulting beneficial
      conversion of the convertible note recorded in additional paid-in
      capital.                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The following table reflects the adjustment and restated
      amounts:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |                                                                      |  | For the Three Months Ended August 31, 2010 |  
| | -------------------------------------------------------------------- |  | ------------------------------------------ | -
| |                                                                      |  | As Reported                                |  
| | Consolidated Statement of Operations                                 |  | $                                          |  
| | Operating expenses                                                   |  |                                            |  
| | Amortization of debt issuance costs                                  |  | 270,738                                    |  
| |                                                                      |  |                                            |  
| | Total operating expenses                                             |  | 854,020                                    |  
| |                                                                      |  |                                            |  
| | Accretion of discount on convertible and
      promissory debentures |  | 20,004                                     |  
| | Other interest expenses and
      bank charges                       |  | (50,358                                    | )
| | Penalty on convertible debt                                          |  |                                           |  
| | Loss on fair value of
      derivative liability                     |  |                                           |  
| |                                                                      |  |                                            |  
| | Net Loss                                                             |  | 823,666                                    |  

27

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|as of August 31, 2011 (Unaudited)             
|(Stated in
      United States Dollars)       

|22. | Restatement (continued)
|--- | -----------------------

| |                                                                      |  | For the Nine Months Ended August 31, 2010 | 
| | -------------------------------------------------------------------- |  | ----------------------------------------- | 
| |                                                                      |  | As Reported                               | 
| | Consolidated Statement of Operations                                 |  | $                                         | 
| | Operating expenses                                                   |  |                                           | 
| | Amortization of debt issuance
      costs                            |  | 271,100                                   | 
| |                                                                      |  |                                           | 
| | Total operating expenses                                             |  | 2,917,997                                 | 
| |                                                                      |  |                                           | 
| |                                                                      |  |                                           | 
| | Accretion of discount on
      convertible and promissory debentures |  | 40,714                                    | 
| | Penalty on convertible debt                                          |  |                                           | 
| | Loss on fair value of
      derivative liability                     |  |                                          | 
| |                                                                      |  |                                           | 
| | Net Loss                                                             |  | 2,997,914                                 | 

|a) | To amortize debt issuance costs.                                                           
|-- | -------------------------------------------------------------------------------------------
|   |                                                                                            
|b) | To record accretion of discount on convertible
    debts.                                  
|   |                                                                                            
|c) | To reverse fair value of shares expensed at the time of
      issuance of convertible debt.
|   |                                                                                            
|d) | To reclassify penalty on convertible debt.                                                 
|   |                                                                                            
|e) | To recognized change in fair value of derivative
      liability as at August 31, 2010.    

28

---

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"could", "may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable laws, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements so as to conform these
statements to actual results.

Our unaudited financial statements are stated in U.S. dollars
and are prepared in accordance with generally accepted accounting principles in
the United States. The following discussion should be read in conjunction with
our financial statements and the related notes that appear elsewhere in this
quarterly report.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "common
shares" refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise
indicated, the terms "we", "us", "our" and "our company" mean Silverado Gold
Mines Ltd. a British Columbia, Canada corporation and our wholly owned
subsidiaries, Silverado Gold Mines Inc. and Silverado Green Fuel Inc., unless
otherwise indicated.

Overview

Silverado Gold Mines Ltd. is a corporation organized under the
laws of British Columbia, Canada. Our company was originally incorporated in
June 1963. Our company operates in the United States through its wholly owned
subsidiaries, Silverado Gold Mines Inc., (incorporated August 29, 1981) and
Silverado Green Fuel Inc. (incorporated August 14, 2006). We filed a transition
application and notice of articles with the British Columbia Registrar of
Companies on April 20, 2004 in order to replace our former memorandum adopted
under the British Columbia Company Act and to alter our current articles to the
extent necessary to ensure compliance with the British Columbia Business
Corporations Act.

Our exploration activities have been managed and conducted by
affiliated companies, Tri-Con Mining Ltd. (Tri-Con) and Tri-Con Mining Inc.,
pursuant to written operating agreements. Each of Tri-Con and Tri-Con Mining
Inc. are privately-owned corporations controlled by Garry L. Anselmo, who is our
president, chief executive officer, and the chairman of our board of directors.

Our company is engaged in the acquisition and exploration of
mineral properties in the State of Alaska, through its wholly-owned subsidiary,
Silverado Gold Mines Inc., and in the development of a liquid fuel derived from
low-rank coal through its other wholly-owned subsidiary, Silverado Green Fuel,
Inc.

29

---

Our company has committed over three decades of work to the
exploration, development and test mining of gold properties throughout North
America. In the mid-1980s, we decided to focus our efforts in Alaska. We have
extensive experience in geological, geochemical and geophysical exploration
techniques. Our mineral holdings are located in the Fairbanks Mining District
and in the Koyukuk Mining District, consisting of both lode and placer mining
claims. At the present time, our companys primary focus is the exploration and
development of our Nolan Gold Project and our Hammond Project located 175 miles
north of Fairbanks, Alaska. We are also continuing with exploration activities
on our Eagle Creek Property and our Ester Dome Project, which are both located
in the Fairbanks Mining District.

Our company has also been working on the development of
low-rank coal-water fuel (Green Fuel), a non-toxic liquid fuel product derived
from sub-bituminous and lignite coal. In its finished form, the fuel is a
non-toxic, non-hazardous environmentally friendly strategic (liquid) fuel.
Silverado Green Fuel Inc. is seeking financing to enable us to proceed with the
construction of a commercial demonstration facility designed to document the
combustion characteristics of Green Fuel. A successful demonstration project
could lead to construction of a commercial production facility to manufacture
the low-rank coal-water fuel as a replacement fuel for oil fired boilers and
utility generators.

Summary of Mineral Exploration Program and Plan of
Operation

Our company holds interests in the following four groups of
mineral properties in Alaska, U.S.A.:

|1) | Nolan Gold Project;             
|-- | --------------------------------
|2) | Hammond Property (Slisco Bench);
|3) | Eagle Creek Property; and       
|4) | Ester Dome Property.            

All of these properties are in the exploration stage and have
no proven reserves as of August 31, 2011, with the exception of the Nolan
property, which has a probable reserve but requires a more extensive feasibility
study to ascertain if such probable reserve can be classified as a proven
reserve.

The Nolan Gold Project has been the focus of our companys
exploration strategy since 2007 and will be the focus again in 2011. Although a
lack of sufficient capital did not allow for the permitted 1,000 cubic yard bulk
sample under Workmans Bench in 2010, our company plans to continue exploration
drilling for the purpose of defining additional mineral resources associated
with the Solomon Shear Zone.

Following the 2009 drill program at Nolan Creek, we determined
that a larger core drilling rig will be needed in order to move forward with
drilling in 2011. The current company owned drill rig is limited to less than
500 feet of drilling. Any additional drilling beyond the current resource blocks
will require larger and more powerful drills that can drill over 1,000 feet.

Our plan of operations for the next twelve months are as
follows:

Nolan Gold Project

Our company owns a 100 percent interest in numerous mining
claims on the Nolan Creek Project. As of August 31, 2011, our companys Nolan
Gold Project consist of 204 unpatented, federal placer mining claims covering
approximately 4,080 acres in three non-contiguous groups, and 407 unpatented
federal lode mining claims covering approximately 8,140 acres in one large
contiguous group. Many of the 407 lode mining claims are superimposed over the
placer mining claims. There has been no legal survey on any of the claims.

Under our companys ownership since 1982, a total of 23,153
ounces of placer gold was recovered from channel and bench deposits in the Nolan
Valley through 2006. The largest nugget recovered to date weighed 41.35 ounces
and was valued at US$16,000 by weight. It sold for US$50,000. Most nuggets
recovered at Nolan Valley are suitable for jewelry.

30

---

Based on a preliminary feasibility analysis of January 1, 2009,
as amended June 1, 2009, we have economically viable reserves on our properties
that comprise the Nolan Gold Project, subject to a final feasibility study. We
plan to carry out activities on the Nolan Gold Project. The objective of the
activities on the Nolan Gold Project is to complete permitting, drill, and
continue underground development and bulk sampling and processing.

Our exploration plans are to further define lode gold and
antimony resources. The program includes drilling and trenching, as well as the
review of geological and geophysical data. Our proposed drilling program for
2011 will be aimed at lode gold and antimony exploration. Lode drilling will
focus on Pringle Bench, Workmans Bench and the Hillside along the Solomons
Shear trend, and is designed to provide a better three dimensional understanding
of the mineralized sections of the structure and how it is related to the placer
gold deposits of the Nolan Creek area.

If we can raise the necessary capital, we plan to spend up to
$10,000,000 in the next twelve months in carrying out our exploration,
permitting and development activities for the Nolan Gold Project. Of this
amount, $3,600,000 is projected for lode drilling on the Solomon Shear Zone. The
actual amount that we spend on exploration will depend on the actual amount of
funds that we have available for exploration. We are presently seeking to obtain
sufficient financing to enable us to proceed with these plans.

Hammond Property

Our Hammond property is located approximately 8 miles north of
Wiseman, and 175 air miles north of Fairbanks, Alaska in the foothills of the
Brooks Range in an area known as the Koyukuk Mining District. The Hammond
property is located approximately three miles northeast of the Nolan Gold
Project.

Our company leases 24 federal placer mining claims and 36
federal lode mining claims from Alaska Mining Company, Inc. (Alminco). As of
August 31, 2011, we were in arrears of required mineral property claims and
option payments of $590,000 and therefore our rights to the property were
adversely affected. We are currently re-negotiating the terms and conditions of
the Alminco agreement with Alminco. Alminco 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, when business conditions permit; however there is no assurance
that we will be able to successfully renegotiate the terms and conditions of the
Alminco agreement.

The encouraging drill results to date, the potential of
extending the Slisco Channel to the southeast plus the possibility of
discovering gold bearing tributary channels, make this a prospect for additional
discoveries. This project will require additional funding. Even if funding is
acquired, there is no assurance that a commercial gold bearing placer deposit
will be developed. Even if a gold bearing deposit is developed, additional
funding will be required to mine the deposit, and until a feasibility study is
completed, there is no assurance that the deposit will be profitable to
mine.

Eagle Creek Property

The Eagle Creek property is comprised of 77 Alaska state
mineral claims. All claims are contiguous and are located in the Fairbanks North
Star Borough. The total area of the claims equals approximately 3080 acres and
all claims are valid. There has been no legal survey on the claims. Ownership of
the claims is in the name of Silverado Gold Mines Inc. There is an "option to
purchase" agreement with the descendant of Arley Taylor (deceased), to purchase
a 100% interest in the property for $400,000, of which $38,000 remains to be
paid. The amount of $5,000 per year is required to be paid to keep the agreement
in good standing. The original option agreement with Arley Taylor was acquired
through an agreement with S. Tan who assigned the agreement to us in
consideration of 15% royalty from production (15% of net operating profits after
payback of costs). We have continued to make option payments on the Eagle Creek
property based on the agreement, and as a result, all of our mineral claims and
options are in good standing.

During 2011, we plan to move forward with an exploration
program which will include both trenching and diamond core drilling. The
majority of the permits required for the proposed exploration program have been
approved. If funding permits, our company will design a drilling program to
further investigate the gold mineralization associated with the mineralized
structures known as vein-faults.

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A commercially viable economic mineral deposit has not been
defined on the property, and there is no assurance that a commercially viable
economic mineral deposit exists on the property. Any proposed exploration
program that includes drilling is dependent on available capital and there is no
assurance that we will be able to initiate such a program.

Ester Dome Property

The Ester Dome property is comprised of 52 state mineral claims
and 1 unpatented federal mineral claim. The claims are not all contiguous in
that there are 5 separate blocks of claims. Our wholly owned subsidiary,
Silverado Gold Mines Inc. is the registered owner of all claims. The total area
of all claims equals approximately 2.5 square miles and all claims are valid.
There has been no legal survey on the claims. There are three separate
agreements covering these 53 claims on the Ester Dome property.

During 2011, we plan to move forward with the closure of the
Grant Mill Tailings Pond. This pond is filled to capacity, and will be capped
and decommissioned after a final approval of the tailings pond closure plan is
received from State of Alaska regulatory agencies. A meaningful exploration
program may be completed during the summer months to explore for and identify
small high-grade gold anomalies as well as larger low-grade gold anomalies.
Completing the 2011 exploration work plan will be contingent on available
funding.

Low-Rank Coal-Water Fuel Project

Our company is currently having a $150,000 study conducted on
the chemical and physical characteristics of Mississippi Red Hills Lignite Coal
at the Mineral Industry Research Laboratory at the University of Alaska
(Fairbanks) and expects results in 2011. Results of the tests as well as capital
availability and an increase in oil prices would all have to be present and
sufficient for Silverado Green Fuel Inc. to reconsider construction of its Green
Fuel project.

Liquidity and Capital Resources

Our current ratio (current assets divided by current
liabilities) as of August 31, 2011 was 0.05 as compared to 0.16 as of November
30, 2010. This ratio is commonly used as a measure of a companys liquidity. We
look at actual dollars in analyzing our liquidity. Since our companys cash
inflow has been generated mainly from sales of shares of our companys common
stock, gold sale proceeds earned during the exploration stage, debentures and
loans, it will be very difficult for our company to meet the current and
anticipated obligations without raising additional capital. If we are not able
to raise adequate capital and to do so in a timely manner, we will not be able
to fully implement our business plan or sustain ongoing operations.

|                          |  |            |   |  |              |   |  | Change between    |  
|------------------------- |  | ---------- | - |  | ------------ | - |  | ----------------- | -
|                          |  | At         |   |  | At           |   |  | August 31, 2011   |  
|                          |  | August 31, |   |  | November 30, |   |  | and November 30 , |  
|                          |  | 2011       |   |  | 2010         |   |  | 2010              |  
|                          |  | ($)        |   |  | ($)          |   |  | ($)               |  
|Current Assets            |  | 136,995    |   |  | 388,976      |   |  | (251,981          | )
|Current Liabilities       |  | 3,049,324  |   |  | 2,410,510    |   |  | 638,814           |  
|Working Capital/(Deficit) |  | (2,912,329 | ) |  | (2,021,534   | ) |  | (890,795          | )

As of August 31, 2011, we had a working capital deficit of
$2,912,329 as compared to a working capital deficit of $2,021,534 as of November
30, 2010. We had $501 cash on hand as of August 31, 2011 as compared to $66,267
cash on hand as of November 30, 2010. Our companys total assets for such
periods were $2,447,000 (November 30, 2010: $2,484,000) and the total current
assets were $137,000 (November 30, 2010: $389,000).

32

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As of August 31, 2011, our companys current assets consist of
$501 (November 30, 2010: $66,267) in cash, $nil (November 30, 2010: $6,316) in
gold inventory and $136,494 (November 30, 2010: $316,393) in prepaid and other
receivables. Included in prepaid and other receivables were non-cash prepaid
consulting and other fees of $95,105 (November 30, 2010: $271,193) paid through
issuances of our companys common stock under our companys equity compensation
plans.

The majority of our companys assets are long-term or non-cash
in nature and thus considered being of lower liquidity.

Our companys mineral rights have a carrying value at
$1,759,000 as of August 31, 2011 as compared to $1,600,000 as of November 30,
2010, an increase of $159,000 or 10%. The increase in the value of our mineral
rights this past nine months is directly attributable to $94,000 in claim fees
payment, $5,000 in royalty payment $60,000 in an accrued royalty payment. The
net book value of our fixed assets was $541,000 as of August 31, 2011 as
compared to $494,000 as of November 30, 2010, an increase of approximately
$47,000 or 10%. The increase in the net book value of our fixed assets was due
to improvements made on the newly leased office.

The total liabilities as of August 31, 2011 were $3,691,000 as
compared to $2,976,000 as of November 30, 2010, an increase of approximately
$715,000 or 24%. Included in current liabilities are $680,000 (November 30,
2010: $872,000) due to related parties, which has been classified as operating
activities in our companys cash flow statements, and $1,150,000 (November 30,
2010: $916,000) of accounts payable and accrued liabilities.

Our company has not yet generated significant revenues since
recommencement of the exploration stage on December 1, 2001 and our cash was
primarily generated from the sale of our securities. During the nine months
ended August 31, 2011, we raised $432,000 of net proceeds through completed
private placements of which $78,000 was received from uncompleted private
placement subscriptions in fiscal year ended November 30, 2010. We also received
$108,947 through warrants exercise, of which $104,453 is included in common
stock subscribed. During the fiscal year ended November 30, 2010, we raised
$594,000 of net proceeds through completed private placements of which $100,000
was received from uncompleted private placement subscriptions in the fiscal year
ended November 30, 2009.

During the nine months ended August 31, 2011, our company
incurred $65,000 (2010: $85,000) on mineral rights and $212,000 (2010: $347,000)
on the mineral exploration and drilling program.

In addition, our company has spent $1,822,000 (2010:
$2,307,000) on other operating activities. Our company has been reviewing its
budgets for its current business needs and its further exploration and early
stage production at its Nolan Creek property in Alaska. Our plan of mining
operations in Alaska anticipates that we will need to raise and expend
approximately $10,560,000 during fiscal year 2011. We will also need to raise
and spend approximately $3,000,000 on general and administrative costs during
fiscal year 2011.

We are currently seeking capital to place the Nolan mine into
the development and production phase.

Our company expects to continue to be funded primarily from
equity financings and will continue the current process of seeking to arrange
financing of those operational budgets, exploration and near term production to
meet the requirements of the work program. The ability of our company to
complete the exploration and development of its mineral properties is dependent
on our companys ability to obtain the necessary financing. There is no
assurance that we will be able to raise the financing necessary to enable us to
implement our business plan.

Segment Information

Our company operates in one reportable segment, located in
United States, being the acquisition and exploration of mineral properties. Our
companys development of low-rank coal-water fuel, located in United States, is
in its initial stages and is not a reportable segment. Segmented information has
been compiled based on the geographic regions that our company and its
subsidiaries registered and performed exploration and administration activities.
A summary of financial information by geographical areas is as follows:

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|                                            |   | Canada    |  |   | United States |  |   | Total     | 
|------------------------------------------- | - | --------- |  | - | ------------- |  | - | --------- | 
|As of August 31, 2011                       |   |           |  |   |               |  |   |           | 
|Mineral properties and
      rights         |   | -         |  |   | 1,759,522     |  |   | 1,759,522 | 
|Property and equipment                      |   | 123,444   |  |   | 417,630       |  |   | 541,074   | 
|                                            | $ | 123,444   |  | $ | 2,177,152     |  | $ | 2,300,596 | 
|                                            |   |           |  |   |               |  |   |           | 
|As of November 30, 2010                     |   |           |  |   |               |  |   |           | 
|Mineral properties and rights               |   | -         |  |   | 1,600,442     |  |   | 1,600,442 | 
|Property and equipment                      |   | 7,676     |  |   | 486,740       |  |   | 494,416   | 
|                                            | $ | 7,676     |  | $ | 2,087,182     |  | $ | 2,094,858 | 
|                                            |   |           |  |   |               |  |   |           | 
|For the Nine Months Ended August 31, 2011   |   |           |  |   |               |  |   |           | 
|Total net loss and
      comprehensive loss | $ | 2,029,838 |  | $ | 322,322       |  | $ | 2,352,160 | 
|                                            |   |           |  |   |               |  |   |           | 
|For the Nine Months Ended August 31, 2010   |   |           |  |   |               |  |   |           | 
|Total net loss and comprehensive loss       | $ | 2,467,882 |  | $ | 563,582       |  | $ | 3,031,467 | 

Results of Operations  Nine months ended August 31, 2011
and 2010

Our company has not generated significant revenues since
recommencement of the exploration stage from December 1, 2001 to August 31,
2011. For the nine months ended August 31, 2011, we reported a net loss of
$2,352,000, or $0.001 per share, compared to a net loss of $3,031,000, or $0.002
per share for the same period ended August 31, 2010, a decrease of approximately
22%.

The major decreases in nine months ended August 31, 2011, as
compared to the same period in 2010, were our companys exploration expenses by
$135,000, advertising and promotion expenses by $11,000, consulting fees by
$90,000, depreciation expense by $85,000, legal and other professional fees by
$179,000, office expense by $71,000, its related party charges in excess of cost
by $9,000, management fees by $5,000 reporting and investor relations by $80,000
and transfer agent and filing fees by $11,000. These decreases were mainly due
to cash limitations and the development of a restructuring plan that our company
is working on to fund its exploration and development activities.

The major increase included in the net loss for nine months
ended August 31, 2011, as compared to the same period in 2010, was increase of
$81,000 for accounting and auditing fees. Such increase was mainly due to the
hiring of external accountants for the preparation of the Companys filings.

Results of Operations  Three months ended August 31,
2011 and 2010

Our company has not generated significant revenues since
recommencement of the exploration stage from December 1, 2001 to August 31,
2011. For the three months ended August 31, 2011, we reported a net loss of
$398,000, or $0.0001 per share, compared to a net loss of $779,000, or $0.0004
per share for the same period ended August 31, 2010, a decrease of approximately
49%.

The major decreases in three months ended August 31, 2011, as
compared to the same period in 2010, were our companys accounting and auditing
fees by $9,000, consulting fees by $261,000, exploration expenses by $36,000,
legal and other professional fees by $16,000, management fees by $13,000, office
expenses by $15,000, transfer agent and filing fees by $13,000, and reporting
and investor relations by $5,000. These decreases were mainly due to cash
limitations and the development of a restructuring plan that our company is
working on to fund its exploration and development activities.

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The major increase included in the net loss for three months
ended August 31, 2011, as compared to the same period in 2010, was increase of
$25,000 for related party charges in excess of costs. Such increase was mainly
due to the Companys efforts relating to restructuring, development and
expansion.

Related Party Transactions

The details of related party transactions are disclosed in
footnote 11 of our companys interim unaudited consolidated financial statements
for the fiscal quarter ended August 31, 2011 (Item 1, above).

Critical Accounting Policies

Basis of Presentation and Principles of
Consolidation

These consolidated financial statements and related notes are
presented in accordance with accounting principles generally accepted in the
United States, and are expressed in US dollars. These consolidated financial
statements include the accounts of our company and its wholly-owned
subsidiaries, Silverado Gold Mines Inc. and Silverado Green Fuel Inc. All
inter-company transactions and balances have been eliminated. Our companys
fiscal year-end is November 30.

Interim Financial Statements

The interim unaudited financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions for Securities and
Exchange Commission (SEC) Form 10-Q. They do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. Therefore, these financial statements should
be read in conjunction with our companys audited financial statements and notes
thereto for the year ended November 30, 2010, included in our companys Annual
Report on Form 10-K filed on March 15, 2011, with the SEC.

The financial statements included herein are unaudited;
however, they contain all normal recurring accruals and adjustments that, in the
opinion of management, are necessary to present fairly the Company's financial
position at August 31, 2011, and the results of its operations and cash flows
for the interim periods ended August 31, 2011 and 2010. The results of
operations for the three months and nine months ended August 31, 2011 are not
necessarily indicative of the results to be expected for future quarters or the
full year.

Use of Estimates

The preparation of these consolidated statements in accordance
with United States generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenue and expenses in the reporting period. Our company
regularly evaluates estimates and assumptions related to useful life and
recoverability of long-lived assets, stock-based compensation, deferred income
tax asset valuations, asset retirement obligations, financial instrument
valuations, and loss contingencies. Our company bases its estimates and
assumptions on current facts, historical experience and various other factors
that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by our company may differ
materially and adversely from our companys estimates. To the extent there are
material differences between the estimates and the actual results, future
results of operations will be affected.

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Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and they comprise
cash on hand, deposits held with banks and other highly liquid investments.
Highly liquid investments are readily convertible to cash and generally have
maturities of three months or less from the time acquired. Our company places
its cash and cash equivalents with high quality financial institutions which our
company believes limits credit risks.

Property and Equipment

Property and equipment are recorded at cost and are depreciated
on a straight-line basis as follows:

Mining equipment
    10 yearsAuto and trucks
    5 yearsComputer equipment
    3 yearsComputer software
    1 yearLeasehold improvements
    5  7 yearsFurniture and fittings
    10 years


Financial Instruments

FASB ASC 820, Fair Value Measurements and Disclosures,
defines fair value, establishes a framework for measuring fair value under
generally accepted accounting principles and enhances disclosures about fair
value measurements. Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Valuation techniques used to
measure fair value, as required by ASC 820, must maximize the use of observable
inputs and minimize the use of unobservable inputs.

Our companys assessment of the significance of a particular
input to the fair value measurements requires judgment, and may affect the
valuation of the assets and liabilities being measured and their placement
within the fair value hierarchy. The carrying values of cash, other receivables,
accounts payable, mineral claims royalty payable, promissory notes, and due to
related parties approximate fair values because of the short-term maturity of
these instruments. The carrying amount reported in the balance sheet for
convertible debt approximates fair value based on current market rates for
similar financial instruments. Unless otherwise noted, it is managements
opinion that our company is not exposed to significant interest, currency or
credit risks arising from these financial instruments.

Gold Inventory

Our company values its gold inventories at the lower of cost or
market. Since our company is still in the exploration stage, by definition, our
companys direct and absorbed costs would exceed the market value of any gold
recovery. Therefore, our company values gold inventory additions from gold
extraction at the spot price as of the date of the addition to the gold
inventory, and records the costs of gold inventory sold on a first-in first-out
basis. Gold sale proceeds and cost of gold sold are recorded as other income
earned during the exploration stage.

Revenue Recognition

Proceeds from the sale of gold recoveries from test mining are
recorded as other income earned during the exploration stage. Our company
recognizes revenue when production is sold at a fixed or determinable price,
persuasive evidence of an arrangement exists, delivery has occurred and title
has transferred, and collectability is reasonably assured.

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Mineral Property Costs

Our company has been in the exploration stage since its
inception and has not yet realized any revenues from its planned operations. It
is primarily engaged in the acquisition and exploration of mineral properties.
Mineral property exploration costs are expensed as incurred. Mineral property
acquisition costs are initially capitalized. Our company assesses the carrying
costs for impairment under ASC 360, Property, Plant, and Equipmentat
each fiscal quarter end. When it has been determined that a mineral property can
be economically developed as a result of establishing proven and probable
reserves, the costs then incurred to develop such property, will be capitalized.
Such costs will be amortized using the units-of-production method over the
estimated recoverable reserves. If mineral properties are subsequently abandoned
or impaired, any capitalized costs will be charged to operations.

Asset Retirement Obligation

Our company records asset retirement obligations in accordance
with ASC 410-20, 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. ASC 410-20 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, our
company will recognize a gain or loss on settlement.

Foreign Currency Translation

The functional and reporting currency of our company is the
United States dollar. Monetary assets and liabilities denominated in foreign
currencies are translated to United States dollars in accordance with ASC 830,
Foreign Currency Matters, using the exchange rate prevailing at the
balance sheet date. Gains and losses arising on translation or settlement of
foreign currency denominated transactions or balances are included in the
determination of income. Foreign currency transactions are primarily undertaken
in Canadian dollars. Our company has not, to the date of these consolidated
financial statements, entered into derivative instruments to offset the impact
of foreign currency fluctuations.

Comprehensive Loss

ASC 220, Comprehensive Incomeestablishes standards for
the reporting and display of other comprehensive loss and its components in the
consolidated financial statements. As at August 31, 2011 and 2010, our company
has no items that represent other comprehensive loss and, therefore, has not
included a schedule of other comprehensive loss in the financial statements.

Long-lived Assets

In accordance with ASC 360, Property Plant and Equipmentour company tests long-lived assets or asset groups for recoverability when
events or changes in circumstances indicate that their carrying amount may not
be recoverable. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life.

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Recoverability is assessed based on the carrying amount of the
asset and its fair value which is generally determined based on the sum of the
undiscounted cash flows expected to result from the use and the eventual
disposal of the asset, as well as specific appraisal in certain instances. An
impairment loss is recognized when the carrying amount is not recoverable and
exceeds fair value.

Stock-based Compensation

Our company records stock-based compensation in accordance with
ASC 718, Compensation  Stock Based Compensation, and ASC 505-50,
Equity-Based Payments to Non-Employeesusing the fair value method. All
transactions in which goods or services are the consideration received for the
issuance of equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable.

Basic and Diluted Net Loss Per Share

Our company computes net loss per share in accordance with ASC
260, Earnings per Share. ASC 260 requires presentation of both basic and
diluted earnings per share (EPS) on the face of the statement of operations.
Basic EPS is computed by dividing net income (loss) available to common
shareholders (numerator) by the weighted average number of shares outstanding
(denominator) during the period. Diluted EPS gives effect to all dilutive
potential common shares outstanding during the period using the treasury stock
method and convertible preferred stock using the if-converted method. In
computing diluted EPS, the average stock price for the period is used in
determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti-dilutive. Shares underlying these securities totalled
approximately 303,938,525 as of August 31, 2011.

Debt Issuance Costs

Our company recognizes debt issue costs on the balance sheet
when incurred, and amortizes the balance over the term of the related debt.

Income Taxes

Our company accounts for income taxes using the asset and
liability method in accordance with ASC 740, Income Taxes.The asset and
liability method provides that deferred tax assets and liabilities are
recognized for the expected future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and for
operating loss and tax credit carryforwards. Deferred tax assets and liabilities
are measured using the currently enacted tax rates and laws that will be in
effect when the differences are expected to reverse. Our company records a
valuation allowance to reduce deferred tax assets to the amount that is believed
more likely than not to be realized.

Reclassifications

Certain reclassifications have been made to the prior periods
consolidated financial statements to conform to the current periods
presentation.

Recently Issued and Adopted Accounting
Pronouncements

In June 2011, ASC guidance was issued related to comprehensive
income. Under the updated guidance, an entity will have the option to present
the total of comprehensive income either in a single continuous statement of
comprehensive income or in two separate but consecutive statements. In addition,
the update requires certain disclosure requirements when reporting other
comprehensive income. The update does not change the items reported in other
comprehensive income or when an item of other comprehensive income must be
reclassified to income. The update is effective for the Companys fiscal year
beginning January 1, 2012. The Company does not expect the updated guidance to
have an impact on its consolidated financial position, results of operations or
cash flows.

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In May 2011, ASC guidance was issued related to disclosures
around fair value accounting. The updated guidance clarifies different
components of fair value accounting including the application of the highest and
best use and valuation premise concepts, measuring the fair value of an
instrument classified in a reporting entitys shareholders equity and
disclosing quantitative information about the unobservable inputs used in fair
value measurements that are categorized in level 3 of the fair value hierarchy.
The update is effective for the Companys fiscal year beginning January 1, 2012.
The Company does not expect the updated guidance to have a significant impact on
its consolidated financial position, results of operations or cash flows.

Our company has implemented all other new accounting
pronouncements that are in effect and that may impact its financial statements
and does not believe that there are any other new accounting pronouncements that
have been issued that might have a material impact on its financial position or
results of operations.

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 that would be considered material to investors.

Inflation

The amounts presented in the financial statements do not
provide for the effect of inflation on our operations or financial position. The
net operating losses shown would be greater than reported if the effects of
inflation were reflected either by charging operations with amounts that
represent replacement costs or by using other inflation adjustments.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk

As a smaller reporting company, we are not required to provide
the information required by this Item.

Item 4. Controls and Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (our
principal executive officer) and our chief financial officer (our principal
financial officer and principle accounting officer) to allow for timely
decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
president (our principal executive officer) and our chief financial officer (our
principal financial officer and principle accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president (our principal executive
officer) and our chief financial officer (our principal financial officer and
principle accounting officer) concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this quarterly
report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended August 31, 2011 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

39

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PART II  OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, executive officers or affiliates, or any registered or beneficial
stockholder, is an adverse party or has a material interest adverse to our
interest.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Removed and Reserved

Item 5. Other Information

None.

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Item 6. Exhibits

|Exhibit | Description                                                                                                                                                                                                                                                                                                     
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                                                                 
|(3)     | (i) Articles of Incorporation; (ii) By-laws                                                                                                                                                                                                                                                                     
|3.1     | Articles of Incorporation (Incorporated by reference to
      our Registration Statement on Form 10 filed on August 11, 1984, as
      amended).                                                                                                                                                                
|3.2     | Amendment to Articles of Incorporation (Incorporated by
      reference to our Quarterly Report on Form 10-Q filed on July 15, 1997).                                                                                                                                                                           
|3.3     | Altered Memorandum (Incorporated by reference to our
      Current Report on Form 8-K filed on September 11, 2002).                                                                                                                                                                                             
|3.4     | Amendment to Articles of Incorporation (Incorporated by
      reference to our Current Report on Form 8-K filed on June 13, 2003).                                                                                                                                                                              
|(4)     | Instruments Defining the Rights of Security Holders ,
      Including Indentures                                                                                                                                                                                                                                
|4.1     | Share certificate representing common shares of the
      capital of our company (Incorporated by reference to our Registration
      Statement on Form 10 filed on August 11, 1984, as amended).                                                                                                               
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                              
|10.1    | Agreement for Conditional Purchase and Sale of Mining
      Property between our company and Roger C. Burggraf dated October 6, 1978 
      Grant Mine Property (Incorporated by reference to our Registration
      Statement on Form 10 filed on August 11, 1984, as amended)                                
|10.2    | Agreement for Conditional Purchase and Sale of Mining
      Property between our company and Paul Barelka, Donald August and Mark
      Thoennes dated August 12, 1979  St. Paul Property (Incorporated by
      reference to our Registration Statement on Form 10 filed on August 11,
      1984, as amended)
|10.3    | Lease of Mining Claims with Option to Purchase between
      our company and Alaska Mining Company, Inc. dated February 3, 1995 
      Hammond Property (Incorporated by reference to our Annual Report on Form
      10-K for the fiscal year ended November 30, 1995).                                       
|10.4    | Change of Control Agreement between our company and Garry
      L. Anselmo dated August, 1995 (Incorporated by reference to our Annual
      Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on
      February 28, 2003).                                                               
|10.5    | Amendment to Change of Control Agreement between our
      company and Garry L. Anselmo (Incorporated by reference to our Annual
      Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on
      February 28, 2003).                                                                     
|10.6    | Operating Agreement between our company and Tri-Con
      Mining Ltd. Dated January 1, 1997 (Incorporated by reference to our Annual
      Report on Form 10-K for the fiscal year ended November 30, 1996).                                                                                                    
|10.7    | Operating Agreement between our company and Tri-Con
      Mining Inc. dated January 1, 1997 (Incorporated by reference to our Annual
      Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on
      February 28, 2003).                                                                 
|10.8    | Operating Agreement between our company and Tri-Con
      Mining Alaska Inc. dated January 1, 1997 (Incorporated by reference to our
      Annual Report on Form 10-KSB for the fiscal year ended November 30, 2002
      filed on February 28, 2003).                                                          
|10.9    | Form of Warrant Exercise Agreement between our company
      and certain of the selling security holders (Incorporated by reference to
      our Registration Statement on Form SB-2 filed on August 19, 2004).                                                                                                 
|10.10   | Form of Delay Agreement between our company and certain
      of the Selling Shareholders (Incorporated by reference to our Registration
      Statement on Form SB-2 filed on August 19, 2004).                                                                                                                
|10.11   | 2006 Stock Option Plan (Incorporated by reference to our
      Registration Statement on Form S-8 filed on April 11, 2006) .                                                                                                                                                                                    
|10.12   | 2006-II Stock Option Plan (Incorporated by reference to
      our Registration Statement on Form S-8 filed on March 31, 2006).                                                                                                                                                                                  

41

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|Exhibit | Description                                                                                                                                                                                                                                                                      
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                                  
|10.13   | 2007 Stock Option Plan (Incorporated by reference to our
      Registration Statement on Form S-8 filed on February 20, 2007).                                                                                                                                                   
|10.14   | Shared Well Agreement between the Company and Sukakpak,
      Inc., dated August 17, 2007 (Incorporated by reference to our Annual
      Report on Form 10-KSB for the fiscal year ended November 30, 2007 filed on
      February 28, 2008).                                    
|10.15   | 2007-1 Equity Compensation Plan (Incorporated by
      reference to our Registration Statement on Form S-8 filed on September 7,
      2007).                                                                                                                                    
|10.16   | Lease Agreement between the Company and TA Properties
      (Canada) Ltd., dated March 30, 2007 (Incorporated by reference to our
      Quarterly Report on Form 10-QSB filed on July 15, 2008).                                                                                 
|10.17   | Indemnity Agreements between the Company and Garry L.
      Anselmo, Stuart C. McCulloch, and James F. Dixon, each dated October 27,
      2008 (Incorporated by reference to our Current Report on Form 8-K filed on
      October 29, 2008).                                   
|10.18   | Indemnity Agreements between the Company and Garry L.
      Anselmo, Stuart C. McCulloch, Donald G. Balletto, Robert M. Dynes and John
      Mackay, each dated December 23, 2009 (Incorporated by reference to our
      Current Report on Form 8-K filed on December 23, 2009).
|10.19   | 2009 Equity Compensation Plan (Incorporated by reference
    to our Registration Statement on Form S-8 filed on January 29, 2009).                                                                                                                                               
|10.20   | 2009-II Equity Compensation Plan (Incorporated by
      reference to our Registration Statement on Form S-8 filed on June 1,
      2009).                                                                                                                                        
|10.21   | Equity Line of Credit Agreement between the Company and
      Ashborne Finance Ltd. (Incorporated by reference to our Current Report on
      Form 8-K filed on August 12, 2009).                                                                                                
|10.22   | Consulting Agreement between the Company and 1315781
      Ontario Inc. (Incorporated by reference to our Quarterly Report on Form
      10-Q filed on October 15, 2009).                                                                                                        
|10.23   | Note Purchase Agreement between the Company and St.
      George Investments, LLC. (Incorporated by reference to our Current Report
      on Form 8-K filed on January 28, 2010).                                                                                                
|10.24   | 2009-III Equity Compensation Plan (Incorporated by
      reference to our Registration Statement on Form S-8 filed on December 16,
      2009).                                                                                                                                  
|10.25   | 2010-I Equity Compensation Plan (Incorporated by
      reference to our Registration Statement on Form S-8 filed on June 9,
      2010).                                                                                                                                         
|10.26   | 2010-II Equity Compensation Plan (Incorporated by
      reference to our Registration Statement on Form S-8 filed on December 2,
      2010).                                                                                                                                    
|(14)    | Code of Ethics                                                                                                                                                                                                                                                                   
|14.1    | Code of Ethics (Incorporated by reference to our
      Quarterly Report on Form 10-QSB filed on July 15, 2004).                                                                                                                                                                  
|(21)    | Subsidiaries of the Registrant                                                                                                                                                                                                                                                   
|21.1    | Silverado Gold Mines Inc.                                                                                                                                                                                                                                                        
|        | Silverado Green Fuel Inc.                                                                                                                                                                                                                                                        
|(31)    | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                                                                          
|31.1 *  | Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes- Oxley Act of 2002                                                                                                                                                                      
|31.2 *  | Certification of Principal Financial Officer pursuant to
      Section 302 of the Sarbanes- Oxley Act of 2002                                                                                                                                                                    
|(32)    | Section 1350 Certifications                                                                                                                                                                                                                                                      
|32.1 *  | Certification of Principal Executive Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002                                                                                                                
|32.2 *  | Certification of Principal Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002                                                                                                                

* Filed herewith.

42

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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 21, 2011 | /s/ Garry L. Anselmo                                           
|                       | Garry L. Anselmo                                               
|                       | Chairman of the Board, President, Chief
      Executive Officer
|                       | (Principal Executive Officer)                                  
|                       |                                                                
|                       |                                                                
|DATE: October 21, 2011 | /s/ Donald Balletto                                            
|                       | Donald Balletto                                                
|                       | Chief Financial Officer and Director                           
|                       | (Principal Financial Officer and Principal
      Accounting    
|                       | Officer)                                                       

43

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