---

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

FORM 10-QSB

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

For the quarterly period ended: May 31, 2006

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 0-12132

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

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

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

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

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

Number of shares outstanding as of June 30, 2006: 594,322,333
  common shares.

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

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PART IFINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

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

|ASSETS                                                |   | 2006        |   |   | 2005        |  
|----------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                      |   | (Unaudited) |   |   |             |  
|Current                                               |   |             |   |   |             |  
|Cash and cash
      equivalents                       | $ | 6,066,499   |   | $ | 408,589     |  
|Gold inventory                                        |   | 35,065      |   |   | 27,916      |  
|Amounts receivable                                    |   | 16,622      |   |   | 6,594       |  
|                                                      |   |             |   |   |             |  
|                                                      |   | 6,118,186   |   |   | 443,099     |  
|Property, plant and equipment                         |   | 1,193,436   |   |   | 1,285,553   |  
|                                                      |   |             |   |   |             |  
|                                                      | $ | 7,311,622   |   | $ | 1,728,652   |  
|                                                      |   |             |   |   |             |  
|LIABILITIES                                           |   |             |   |   |             |  
|Current                                               |   |             |   |   |             |  
|Accounts payable and accrued
      liabilities        | $ | 400,972     |   | $ | 393,058     |  
|Mineral claims royalty
      payable                  |   | 350,000     |   |   | 400,000     |  
|Payable to related companies                          |   | 142,350     |   |   | 70,282      |  
|Convertible debentures,
      current portion         |   | 140,000     |   |   | 176,652     |  
|Capital lease obligation, current
      portion       |   | 380,246     |   |   | 258,254     |  
|                                                      |   |             |   |   |             |  
|                                                      |   | 1,413,568   |   |   | 1,298,246   |  
|Asset retirement obligation                           |   | 552,940     |   |   | 539,453     |  
|Capital lease obligations                             |   | 159,948     |   |   | 463,895     |  
|                                                      |   |             |   |   |             |  
|                                                      |   | 2,126,456   |   |   | 2,301,594   |  
|                                                      |   |             |   |   |             |  
|SHAREHOLDERS EQUITY (DEFICIT)                        |   |             |   |   |             |  
|Capital stock                                         |   |             |   |   |             |  
|Authorized: unlimited common shares with no par value |   |             |   |   |             |  
|Issued and outstanding:                               |   |             |   |   |             |  
|565,951,613 common shares (2005:
      355,054,275)   |   | 80,132,048  |   |   | 71,526,738  |  
|Additional capital stock options                      |   | 466,314     |   |   | 466,314     |  
|Shares to be issued                                   |   | 767,000     |   |   | 54,500      |  
|Accumulated deficit during exploration                |   | (76,180,196 | ) |   | (72,620,494 | )
|                                                      |   |             |   |   |             |  
|                                                      |   | 5,185,166   |   |   | (572,942    | )
|                                                      |   |             |   |   |             |  
|                                                      | $ | 7,311,622   |   | $ | 1,728,652   |  

See accompanying notes to financial statement

2

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SILVERADO GOLD MINES LTD.(An
Exploration Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONS & OTHER
COMPREHENSIVE INCOMEfor the six months ended May 31, 2006 and May 31,
2005(Stated in United States Dollars)

|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   | Period Since         |  
|------------------------------------------------- | - | ------------------------- | - | - | ----------------------- | - | - | ---------------- | - | - | ----------- | - | - | -------------------- | -
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   | Recommencement       |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   | Of Exploration Stage |  
|                                                  |   | Three months ended May 31 |   |   | Six months ended May 31 |   |   | December 1, 2001 |  
|                                                  |   | 2006                      |   |   | 2005                    |   |   | 2006             |   |   | 2005        |   |   | To                   |  
|                                                  |   | (Unaudited)               |   |   | (Unaudited)             |   |   | (Unaudited)      |   |   | (Unaudited) |   |   | May 31, 2006         |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|General and Administrative Expenses               |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Accounting and audit                              | $ | 56,943                    |   | $ | 29,700                  |   | $ | 71,766           |   | $ | 52,300      |   | $ | 245,780              |  
|Advertising and promotion                         |   | 53,422                    |   |   | 39,912                  |   |   | 182,702          |   |   | 137,038     |   |   | 1,660,223            |  
|Consulting fees                                   |   | 560,777                   |   |   | 58,624                  |   |   | 612,777          |   |   | 324,161     |   |   | 4,996,007            |  
|Depreciation, accretion and impairment            |   | 55,168                    |   |   | 45,784                  |   |   | 109,661          |   |   | 103,834     |   |   | 1,853,321            |  
|Exploration expenses                              |   | 476,519                   |   |   | 143,345                 |   |   | 1,332,465        |   |   | 299,597     |   |   | 9,959,821            |  
|Financing activities                              |   | -                         |   |   | -                       |   |   | -                |   |   | 252,003     |   |   | 252,003              |  
|Interest on convertible
      debentures          |   | 2,342                     |   |   | 3,716                   |   |   | 5,600            |   |   | 6,516       |   |   | 679,007              |  
|Interest on capital lease obligations             |   | 11,113                    |   |   | 21,184                  |   |   | 24,005           |   |   | 26,918      |   |   | 281,594              |  
|Legal                                             |   | 153,417                   |   |   | 38,236                  |   |   | 185,462          |   |   | 58,321      |   |   | 456,950              |  
|Management services                               |   | 242,608                   |   |   | 137,268                 |   |   | 482,770          |   |   | 288,611     |   |   | 2,405,289            |  
|Office                                            |   | 258,469                   |   |   | 122,547                 |   |   | 484,099          |   |   | 228,259     |   |   | 2,271,043            |  
|Other interest and bank charges                   |   | 2,943                     |   |   | 1,134                   |   |   | 5,583            |   |   | 3,032       |   |   | 33,220               |  
|Reporting and investor
      relations            |   | 31,015                    |   |   | 5,498                   |   |   | 68,482           |   |   | 16,323      |   |   | 183,121              |  
|Research                                          |   | 37,649                    |   |   | 43,531                  |   |   | 65,917           |   |   | 64,899      |   |   | 671,596              |  
|Transfer agent fees and
      mailing             |   | 9,365                     |   |   | 10,013                  |   |   | 19,601           |   |   | 12,264      |   |   | 110,950              |  
|Write-off of mineral claim expenditures           |   | -                         |   |   | -                       |   |   | -                |   |   | -           |   |   | 1,159,529            |  
|Write-down of property,
      plant and equipment |   | -                         |   |   | -                       |   |   | -                |   |   | -           |   |   | 285,875              |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Total General and Administrative Expenses         |   | (1,951,750                | ) |   | (700,492                | ) |   | (3,650,890       | ) |   | (1,874,076  | ) |   | (27,505,329          | )
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Interest and other income                         |   | 10,149                    |   |   | 508                     |   |   | 16,574           |   |   | 764         |   |   | 109,364              |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Cumulative effect of accounting change            |   | -                         |   |   | -                       |   |   | -                |   |   | -           |   |   | (153,226             | )
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Other comprehensive income                        |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Gain (loss) on foreign exchange                   |   | 52,157                    |   |   | (20,148                 | ) |   | 74,614           |   |   | (67,607     | ) |   | 217,687              |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Loss and comprehensive loss for the period        | $ | (1,889,444                | ) | $ | (720,132                | ) | $ | (3,559,702       | ) | $ | (1,940,919  | ) | $ | (27,331,504          | )
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Net loss per share                                | $ | (0.00                     | ) | $ | (0.01                   | ) | $ | (0.00            | ) | $ | (0.01       | ) |   |                      |  
|                                                  |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|Basic and diluted weighted average number of      |   |                           |   |   |                         |   |   |                  |   |   |             |   |   |                      |  
|common shares outstanding                         |   | 524,032,265               |   |   | 268,630,739             |   |   | 469,403,291      |   |   | 246,662,210 |   |   |                      |  

See accompanying notes to financial statements

3

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

|                                                             |   |                         |   |   |                      |   |   | Period Since     |  
|------------------------------------------------------------ | - | ----------------------- | - | - | -------------------- | - | - | ---------------- | -
|                                                             |   |                         |   |   |                      |   |   | Recommencement   |  
|                                                             |   | Six Months Ended May 31 |   |   | Of Exploration Stage |  
|                                                             |   | 2006                    |   |   | 2005                 |   |   | December 1, 2001 |  
|                                                             |   | (Unaudited)             |   |   | (Unaudited)          |   |   | to May 31, 2006  |  
|Cash Flows used in Operating Activities                      |   |                         |   |   |                      |   |   |                  |  
|Net loss for the period                                      | $ | (3,559,702              | ) | $ | (1,940,919           | ) | $ | (27,331,504      | )
|Adjustments to reconcile loss to net
      cash provided     |   |                         |   |   |                      |   |   |                  |  
|by (used in)
      operating activities:                     |   |                         |   |   |                      |   |   |                  |  
|Cumulative effect
      of accounting change                 |   | -                       |   |   | -                    |   |   | 153,226          |  
|Depreciation, accretion and impairment                       |   | 109,661                 |   |   | 141,143              |   |   | 1,853,321        |  
|Stock based
      compensation                               |   | -                       |   |   | -                    |   |   | 2,252,950        |  
|Stock issued for debenture                                   |   | -                       |   |   | -                    |   |   | 217,687          |  
|Non-cash
      consulting expense                            |   | 559,000                 |   |   | 284,900              |   |   | 1,421,040        |  
|Non-cash financing expense                                   |   | -                       |   |   | 252,003              |   |   | 252,003          |  
|Interest accrued                                             |   | -                       |   |   | -                    |   |   | 486,370          |  
|Write-off of mineral claim expenditures                      |   | -                       |   |   | -                    |   |   | 1,159,529        |  
|Write-down of
      property, plant and equipment            |   | -                       |   |   | -                    |   |   | 285,875          |  
|Changes in non-cash
      operating working capital:         |   |                         |   |   |                      |   |   |                  |  
|Amounts receivable                                           |   | (10,028                 | ) |   | (1,770               | ) |   | (13,747          | )
|Gold inventory                                               |   | (7,149                  | ) |   | 22,427               |   |   | (23,925          | )
|Prepaid expense                                              |   | -                       |   |   | 122,000              |   |   | -                |  
|Exploration and development advances                         |   | -                       |   |   | 74,710               |   |   | -                |  
|Share
      subscriptions issued                             |   | 712,500                 |   |   | (5,000               | ) |   | 882,000          |  
|Accounts payable and accrued liabilities                     |   | 7,914                   |   |   | 105,403              |   |   | (195,421         | )
|Increase in
      mineral claims royalty payable             |   | (50,000                 | ) |   | -                    |   |   | 33,500           |  
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Net cash used in Operating Activities                        |   | (2,237,804              | ) |   | (935,106             | ) |   | (18,567,096      | )
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Cash Flows used in Investing Activities                      |   |                         |   |   |                      |   |   |                  |  
|Purchase of property,
      plant and equipment              |   | (3,668                  | ) |   | (480                 | ) |   | (1,338,373       | )
|Disposal of property, plant and
      equipment              |   | -                       |   |   | 148,000              |   |   | 152,252          |  
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Net cash provided (used) from Investing Activities           |   | (3,668                  | ) |   | 147,520              |   |   | (1,186,121       | )
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Cash Flows from Financing Activities                         |   |                         |   |   |                      |   |   |                  |  
|Common stock issued for
      cash (net of share issue cost) |   | 8,046,310               |   |   | 968,998              |   |   | 26,654,113       |  
|Repayment of convertible debentures                          |   | (37,041                 | ) |   | -                    |   |   | (75,388          | )
|Repayment of loans
      payable                             |   | -                       |   |   | -                    |   |   | (35,729          | )
|Repayment of capital lease obligations                       |   | (181,955                | ) |   | (118,882             | ) |   | (591,413         | )
|Due to related party                                         |   | 72,068                  |   |   | -                    |   |   | (148,960         | )
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Net cash provided from Financing Activities                  |   | 7,899,382               |   |   | 850,116              |   |   | 25,802,623       |  
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Increase (decrease) in cash and cash
      equivalents       |   | 5,657,910               |   |   | 62,531               |   |   | 6,049,406        |  
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Cash and cash equivalents, beginning of
      period         |   | 408,589                 |   |   | 12,828               |   |   | 17,093           |  
|                                                             |   |                         |   |   |                      |   |   |                  |  
|Cash at end of the period                                    | $ | 6,066,499               |   | $ | 75,358               |   | $ | 6,066,499        |  

See accompanying notes to financial statements

4

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

Six months ended May 31, 2006 and May 31, 2005

|1. | Basis of presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The unaudited consolidated financial statements include
      the accounts of Silverado Gold Mines Ltd. and its wholly-owned subsidiary
      Silverado Gold Mines Inc. (formerly Silverado Green Fuel Inc. as of May
      17, 2006). These statements have been prepared in accordance with United
      States generally accepted accounting principles for interim financial
      information. These financial statements also comply, in all material
      respects, with generally accepted accounting principles in the United
      States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The accompanying unaudited consolidated financial
      statements do not include all information and footnote disclosures
      required under United States generally accepted accounting principles. In
      our opinion, all adjustments (consisting solely of normal recurring
      accruals) considered necessary for a fair presentation of the financial
      position, results of operations and cash flows as at May 31, 2006, and for
      all periods presented, have been included. Readers of these financial
      statements should note that interim results for the six month periods
      ended May 31, 2006, and May 31, 2005, are not necessarily indicative of
      the results that may be expected for the fiscal year as a whole.                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These financial statements should be read in conjunction
      with the consolidated financial statements and notes thereto included in
      our annual report on Form 10-KSB for the fiscal year ended November 30,
      2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | Related party transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company had related party transactions with Tri-Con
      Mining Ltd., Tri-Con Mining Inc., Tri-Con Mining Alaska Inc. (collectively
      Tri-Con), all of which are controlled by a director of ours.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Tri-Con are operations and exploration contractors, and
      has been employed by the Company under contract since 1972 to carry out
      all of its fieldwork and to provide administrative and management
      services. Under our current contract dated January 1, 1997 work is charged
      at cost plus 25% for exploration and cost plus 15% for development and
      mining. Cost includes out of pocket or actual cost plus 15% charge for
      office overhead including stand by and contingencies. There is no mark up
      on capital purchases. At May 31, 2006, we owe $142,350 to Tri-Con for
      exploration and administration services to be performed during the current
      fiscal year on behalf of the Company. Tri-Cons services for the current
      fiscal year are focusing mainly on our Low-Rank Coal-Water Fuel program as
      well as corporate planning and preparation for year round production on
      our Nolan property and administration services at both our field and
      corporate offices.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The aggregate amounts paid to Tri-Con each period by
      category, including amounts relating to the Grant Mine Project and Nolan
      properties, for disbursements and for services rendered by Tri-Con
      personnel working on our projects, and including interest charged on
      outstanding balance at Tri-Cons borrowing costs are shown
  below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

5

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

Six months ended May 31, 2006 and May 31, 2005

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

| |                                                                      |   | May 31,   |  |   | May 31, | 
| | -------------------------------------------------------------------- | - | --------- |  | - | ------- | 
| |                                                                      |   | 2006      |  |   | 2005    | 
| |                                                                      |   |           |  |   |         | 
| | Exploration services                                                 | $ | 1,230,955 |  | $ | 254,773 | 
| | Administrative and management services                               |   | 511,880   |  |   | 365,521 | 
| | Research                                                             |   | 65,917    |  |   | 64,899  | 
| |                                                                      | $ | 1,808,752 |  | $ | 685,193 | 
| |                                                                      |   |           |  |   |         | 
| | Amount of total charges in excess of Tri-Cons costs
      incurred  | $ | 256,280   |  | $ | 66,572  | 
| |                                                                      |   |           |  |   |         | 
| | Excess amount charged as a percentage of actual costs
      incurred |   | 14.2%     |  |   | 9.7%    | 

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

| |                                          |   | May 31, |  |   | May 31, |  
| | ---------------------------------------- | - | ------- |  | - | ------- | -
| |                                          |   | 2006    |  |   | 2005    |  
| |                                          |   |         |  |   |         |  
| | Sale of fixed assets under capital lease | $ | -       |  | $ | 95,000  |  
| | Issuance of shares for:                  |   |         |  |   |         |  
| | Financing
      activities               |   | -       |  |   | 252,003 |  
| | Consulting services                      |   | 559,000 |  |   | 284,900 |  
| | Capital lease obligation                 |   | -       |  |   | (95,000 | )

6

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

Six months ended May 31, 2006 and May 31, 2005

|5. | Debentures:                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                            
|   | On March 1, 2001, we completed negotiations to
      restructure our $2,000,000 convertible debentures. We issued replacement
      debentures in the aggregate amount of $2,564,400 in consideration of
      cancellation of the $2,000,000 principal amount plus all accrued interest
      on the original debentures to March 1, 2001.
|   |                                                                                                                                                                                                                                                                                                                                            
|   | (a)                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                            
|   | (b)                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                            
|6. | Lease purchase agreement:                                                                                                                                                                                                                                                                                                                  

The assets and liabilities under
capital leases are recorded at the lower of the present value of the minimum
lease payments or the fair value of the asset. The assets are amortized over
their estimated productive lives which are estimated to be 10 years.
Amortization on assets under capital leases charged to expense during the period
ended May 31, 2006 was $89,929 (2005: $50,316).

Minimum future lease payments under
capital leases as of May 31, 2006 and 2005

|                             |   | 2006     |   |   | 2005     |  
|---------------------------- | - | -------- | - | - | -------- | -
|                             |   |          |   |   |          |  
|November 30, 2005            | $ | -        |   | $ | 391,556  |  
|November 30, 2006            |   | 301,694  |   |   | 492,472  |  
|November 30, 2007            |   | 262,505  |   |   | -        |  
|                             |   |          |   |   |          |  
|Total minimum lease payments |   | 564,199  |   |   | 884,028  |  
|Less: interest               |   | (24,005  | ) |   | (85,428  | )
|                             |   |          |   |   |          |  
|                             |   | 540,194  |   |   | 798,600  |  
|Less: current portion        |   | (380,246 | ) |   | (364,214 | )
|                             |   |          |   |   |          |  
|Long-term portion            | $ | 159,948  |   | $ | 434,386  |  

7

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

Six months ended May 31, 2006 and May 31, 2005

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

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


8

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

Six months ended May 31, 2006 and May 31, 2005

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

Date
    
    Description
    
    
    No. of Shares
    
    
    Price per share
    
    
    ProceedsMay 1, 2006
    
    Private Placement
    
    
    2,400,000
    
    
    0.0800
    
    
    192,000May 16, 2006
    
    Private Placement
    
    
    4,000,000
    
    
    0.1000
    
    
    400,000May 18, 2006
    
    Private Placement
    
    
    2,000,000
    
    
    0.0400
    
    
    80,000Share
      issuance costs
    
    
    -
    
    
    -
    
    
    (926,535
    )May 31, 2006
    
    
    
    
    565,951,613
    
    $
    -
    
    $
    80,132,048


|8. | Subsequent events:
|-- | ------------------

Subsequent to May 31, 2006, the Company
issued an aggregate of 200,000 common shares at $0.13 per share totaling $26,000
pursuant to a consulting agreement.

9

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

FORWARD-LOOKING STATEMENTS

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

OVERVIEW

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

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

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

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

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

10

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PLAN OF OPERATIONS

Our plan of operation for the next six months is discussed
below:

The Nolan Gold Project

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

We plan to spend approximately $1.2 million in the next six
months in carrying out our exploration and bulk sampling activities at the Nolan
Gold Project. Of this amount, we anticipate approximately $450,000 will be spent
on test mining activities and reclamation work, with the balance of $750,000
being spent on other exploration activities, including phase one and phase two
drilling programs on Marys Bench East, Swede Channel, Pingel Bench, and Slisco
Bench placer gold targets and continued exploration for lode gold occurrences
along the Solomon Shear Trend. While the costs of exploration and test mining
may be off-set by recoveries from sales of gold that we may achieve, these
recoveries may not exceed the costs of our exploration programs including our
test mining activities. See the discussion of our cash resources and working
capital under Liquidity and Financial Condition below and in the section
entitled Risk Factors below.

During the past six months we have developed a stockpile of
gold bearing gravel by driving a tunnel into a placer deposit known as the Swede
Channel. The volume of the gravel stockpile is estimated at approximately 8,500
loose cubic yards, and will be processed by gravity sluicing beginning in late
June through mid-July of 2006 to remove placer gold nuggets and fine gold from
the gravel. The portal to the Swede Channel was sealed during late April, and
will be re-opened after the freeze-up which usually occurs during late September
or October. Since the tunnel is in permafrost, it requires minimal support other
than at the portal. Since it must be ventilated, it can only be worked during
the coldest time of the year, about October through March to preserve the
integrity of the permafrost. Bulk extraction of the Swede Channel gravels will
then continue. During the time since the portal was sealed, we have been focused
on reclamation work, consisting of cleaning up and removing scrap material from
the property, retro-fitting of the sluicing plant, and outlining our planned
exploration programs. Once the sluicing phase is completed, efforts will be
directed to the exploration programs, further reclamation and clean-up, and
equipment maintenance and preparation for the winter underground project.

Beginning in April of 2006, we have staked an additional 237
federal lode claims to bring our total lode claims holdings in the Nolan-Hammond
area to 342, encompassing 11.04 square miles. We also purchased six federal
unpatented placer claims and staked an additional 7 placer claims to bring our
total placer claims holdings in the Nolan-Hammond area to 218, covering about
6.81 square miles.

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

| | 1. | Retro-fit and upgrade our sluicing plant to maximize the
      efficiency of processing and extracting gold from the stockpile.                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                             
| | 2. | Install necessary ponds, pipelines, pumps, etc., needed
      to facilitate the closed circuit, gravity concentration sluicing
      operations to be carried out this summer.                                                              
| |    |                                                                                                                                                                                                                                             
| | 3. | Stabilize any surface disturbances to prevent or minimize
      surface degradation.                                                                                                                                                        
| |    |                                                                                                                                                                                                                                             
| | 4. | Once the stockpile is sufficiently thawed, proceed with
      gravity processing of the stockpile. Those operations are expected to be
      completed by mid July 2006.                                                                    
| |    |                                                                                                                                                                                                                                             
| | 5. | Initiate a placer drilling program aimed at further
      development of the Swede Channel and to prospect other areas of the
      property, including the Slisco Bench.                                                                   
| |    |                                                                                                                                                                                                                                             
| | 6. | Continue reclamation of prior surface disturbances at the
      Nolan project.                                                                                                                                                              
| |    |                                                                                                                                                                                                                                             
| | 7. | Once freeze-up has occurred in the fall, re-open the
      Swede Channel. This work will proceed to stockpile all gold bearing gravel
      remaining in the Swede Channel to be washed for gold recovery during the
      summer of 2007.
| |    |                                                                                                                                                                                                                                             
| | 8. | Initiate a new phase of exploration on the Solomon
      Shear. This will be a lode gold exploration
program.                                                                                                                             

11

---

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

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

Low-Rank Coal-Water Fuel Project

We anticipate spending approximately $180,000 during the
remaining fiscal year on our work to seek funding from government and private
sources in connection with establishment of the demonstration facility at the
Grant Mill. There is no assurance that any financing will be obtained from
either government or private sources to fund this project.

RESULTS OF OPERATIONS

Six months ended May 31, 2006 compared to the six months
ended May 31, 2005.

Revenues

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

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

Expenses

Our expenses increased to $3,650,890 for the six months ended
May 31, 2006 compared to $1,874,076 for the six months ended May 31, 2005,
representing an increase of $1,776,814 or 95%. Our expenses increased to
$1,951,750 for the three months ended May 31, 2006 compared to $700,492 for the
three months ended May 31, 2005, representing an increase of $1,251,258 or 179%.
The increase in expenses was primarily attributable to increases in exploration,
management services and office expenses during the period ended May 31, 2006 to
facilitate exploration on our Nolan Gold Project.

Increased exploration activity on our mineral properties
resulted in an increase of our general exploration expenses to $1,332,465 for
the six months ended May 31, 2006 compared to $299,597 for the six months ended
May 31, 2005. General exploration expenses increased to $476,519 for the three
months ended May 31, 2006 compared to $143,345 for the three months ended May
31, 2005. The increase in exploration expenses during the six months of our
current fiscal year was attributable to increased exploration activities at the
Nolan Gold Project compared to 2005. These exploration activities included bulk
sampling and exploration activities on the Swede Channel section of the Nolan
Gold Project. We anticipate that our exploration expenses will increase when we
continue the test mining program aimed at further development of the Swede
Channel and to prospect other areas of the property.

Office expenses increased to $484,099 for the six months ended
May 31, 2006 compared to $228,259 for the six months ended May 31, 2005,
representing an increase of $258,979 or 112%. Office expenses increased to
$258,469 for the three months ended May 31, 2006 compared to $122,547 for the
three months ended May 31, 2005, representing an increase of $135,922 or 111%.
The increase during the period ending May 31, 2006

12

---

reflects an increase in our general office operating costs at
our offices in Fairbanks, Alaska due to exploration activities on the Nolan Gold
Project.

Management services expenses increased to $482,770 for the six
months ended May 31, 2006 compared to $288,611 for the six months ended May 31,
2005, representing an increase of $194,159 or 67%. Management services expenses
increase to $242,608 for the three months ended May 31, 2006 compared to
$137,268 for the three months ended May 31, 2005 representing an increase of
$105,340 or 77%. The increase in management services is a result of increased
exploration activity during the period ending May 31, 2006 compared to the
period ending May 31, 2005.

Consulting fees increased to $612,777 for the six months ended
May 31, 2006 compared to $324,161 for the six months ended May 31, 2005,
representing an increase of $288,616 or 89%. Consulting fees increased to
$560,777 for the three months ended May 31, 2006 compared to $58,624 for three
months ended May 31, 2005, representing an increase of $502,153. The increase is
largely attributable to engaging consulting services to facilitate our Low-Rank
Coal-Water Fuel Project. Consulting fees are attributable to stock based
compensation paid to our consultants during the year. Compensation was recorded
based on the quoted market price of our shares as of the date of the
agreement.

Loss

Our loss and comprehensive loss increased to $3,559,702 for the
six months ended May 31, 2006 compared to $1,940,919 for the six months ended
May 31, 2005 representing an increase of $1,618,783 or 83%. The increase in our
loss was primarily attributable to increased exploration, management services,
consulting and office expenses during the six months ended May 31, 2006. We
anticipate that we will continue to incur a loss until such time as we can
achieve commercial production from the Nolan Gold Project, of which there is no
assurance.

LIQUIDITY AND FINANCIAL CONDITION

Cash and Working Capital

The Company had cash and cash equivalents of $6,066,499 as of
May 31, 2006, compared to cash of $408,589 as of November 30, 2005. We had
working capital of $4,704,618 as of May 31, 2006, compared to a working capital
deficiency of $855,147 as of November 30, 2005. The increase in our working
capital was primarily the result of increased funding through equity sales of
our common shares during the six months ended May 31, 2006.

We plan to spend approximately $1.2 million in the next six
months in carrying out our exploration and bulk sampling activities at the Nolan
Gold Project. Of this amount, we anticipate approximately $450,000 will be spent
on test mining activities and reclamation work, with the balance of $ 750,000
being spent on other exploration activities, including phase one and phase two
drilling programs on Marys Bench East, Swede Channel, Pingel Bench, and Slisco
Bench placer gold targets and continued exploration for lode gold occurrences
along the Solomon Shear Trend. While the costs of exploration and test mining
may be off-set by recoveries from sales of gold that we may achieve, these
recoveries may not exceed the costs of our exploration programs including our
test mining activities. See Risk Factors.

Cash Used in Operating Activities

Cash used in operating activities increased to $2,237,804 for
the six months ended May 31, 2006, compared to $935,106 for the six months ended
May 31, 2005, primarily as a result of our increased exploration activity on the
Nolan Gold Project. We funded the cash used in operating activities
predominantly through equity sales of our common shares.

13

---

Investing Activities

Cash paid for investing activities was $3,668 during the six
months ended May 31, 2006 compared to cash provided from investing activities of
$147,520 during the six months ended May 31, 2005. The Company purchased new
computer equipment during the period ending May 31, 2006.

Financing Activities

Cash provided by financing activities increased to $7,899,382
for the six months ended May 31, 2006, compared to $850,116 for the six months
ended May 31, 2005. Cash provided by financing activities was primarily
attributable to share issuances. Cash provided by financing activities was used
to fund our operating and investing activities. Equity financings were completed
with private purchasers at prices that were reflective of the market price of
our common shares as of the date of the financing.

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

Capital Leases

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

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

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

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

As at May 31, 2006, the total amount outstanding under the
revised lease purchase agreements was $540,194, including interest of $21,184.
We are required to maintain the equipment in good working order and are also
required to maintain adequate insurance on the equipment. We are required to
complete future lease payments of $301,694 during fiscal 2006 and $262,505
during fiscal 2007.

Tri-Con

We owe $142,350 to Tri-Con as of May 31, 2006 in connection
with planned exploration activities to be carried out on the Nolan Gold Project
during fiscal 2006. These activities will be carried out by Tri-Con on behalf of
the Company in accordance with our operating agreements with Tri-Con. See Item
12 -- Certain Relationships and Related Transactions of our Annual Report on
Form 10-KSB for the year ended November 30, 2005 for further disclosure
regarding our operating agreements with the Tri-Con.

14

---

Debt

The amount of our convertible debt outstanding was $140,000 as
of May 31, 2006. This entire amount is current. This amount consists of a
convertible debenture in the amount of $140,000 which is in default and has
accrued interest of $92,827. It is unclear as to whether this amount will ever
be converted into common shares as we have been unsuccessful in our extensive
attempts to locate the holders of these debentures. There is no agreement to
exchange this amount of remaining original convertible debentures into
replacement debentures.

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

Mineral Properties

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

Low-Rank Coal-Water Fuel Business

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

Future Financings

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

Off-Balance Sheet Arrangements

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

CRITICAL ACCOUNTING POLICIES

Exploration Stage Company

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

15

---

Mineral claim payments and exploration costs

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

Asset retirement obligation

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

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

Stock Based Compensation

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

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|ITEM 3. | CONTROLS AND PROCEDURES
|------- | -----------------------

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

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

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

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

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

17

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PART IIOTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

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

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

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

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

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

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

None.

|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.

|ITEM 6. | EXHIBITS
|------- | --------

ExhibitNumber
      Description of Exhibit3.1
      Articles of the Company (1)3.2
      Amendment to Articles of the Company (2)3.3
      Altered Memorandum of the Company
        (3)3.4
      Amendment to Articles of the Company (8)4.1
      Share certificate representing
        common shares of the capital of the Company (1)10.1
      Agreement for Conditional Purchase and Sale of
        Mining Property between the Company and Roger C. Burggraf dated October
        6, 1978  Grant Mine Property (1)10.2
      Agreement for Conditional Purchase
        and Sale of Mining Property between the Company and Paul Barelka, Donald
        May and Mark Thoennes dated May 12, 1979  St. Paul Property (1)10.3
      Lease of Mining Claims with Option to Purchase
        between the Company and Alaska Mining Company, Inc. dated February 3,
        1995  Hammond Property (4)10.4
      Change of Control Agreement between
        the Company and Garry L. Anselmo dated May, 1995(6)10.5
      Change of Control Agreement between the Company
        and James Dixon dated May, 1995 (6)10.6
      Amendment to Change of Control
        Agreement between the Company and Garry L. Anselmo (6)10.7
      Operating Agreement between the Company and Tri-Con
        Mining Ltd. dated January 1, 1997 (5)10.8
      Operating Agreement between the
        Company and Tri-Con Mining Inc. dated January 1, 1997 (6)10.9
      Operating Agreement between the Company and Tri-Con
        Mining Alaska Inc. dated January 1, 1997 (6)10.10
      Contract between the Company
        and Dr. Warrack Willson dated March 19, 2001 (6)10.11
      Equipment Lease Agreement between the Company
        and Airport Equipment Rentals Inc. dated October 11, 2002 (6)10.12
      2003 Stock Option Plan (7)


18

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|10.13 | Form of Warrant Exercise Agreement between
        the Company and certain of the selling security holders (9)                        
|----- | --------------------------------------------------------------------------------------------------------------------------------------
|10.14 | Consultant Agreement between the Company and CEOcast,
        Inc. dated April 21, 2004 (9)                                           
|10.15 | Subscription Agreement between the Company
        and Christoph Bruning dated May 10, 2004 (9)                                       
|10.16 | Consultant Agreement between the Company and Smith Canciglia
        Consulting, Inc. dated May 16, 2004 (9)                          
|10.17 | Form of Delay Agreement between the
        Company and certain of the Selling Shareholders.(9)                                       
|10.18 | 2004 Stock Option Plan (10)                                                                                                           
|31.1  | Certification
        Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002                                                       
|31.2  | Certification Pursuant To
        Section 302 Of The Sarbanes-Oxley Act Of 2002                                                       
|32.1  | Certification
        Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906
        Of The Sarbanes-Oxley Act Of 2002
|32.2  | Certification Pursuant To
        18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley
        Act Of 2002
|      |                                                                                                                                       
|(1)   | Filed as an exhibit to the Companys Registration
        Statement on Form 10 filed initially on May 11, 1984, as amended.           
|(2)   | Filed as an exhibit to the Companys
        Quarterly Report on Form 10-Q filed on July 15, 1997.                                    
|(3)   | Filed as an exhibit to the Companys Current Report
        on Form 8-K filed on September 11, 2002.                                  
|(4)   | Filed as an exhibit to the Companys
        Annual Report on Form 10-K for the year ended November 30, 1995.                         
|(5)   | Filed as an exhibit to the Companys Annual Report
        on Form 10-K for the year ended November 30, 1996.                         
|(6)   | Filed as an exhibit to the Companys
        Annual Report on Form 10-KSB for the year ended November 30, 2002.                       
|(7)   | Filed as an exhibit to the Companys Schedule 14A
        Proxy Statement filed April 29, 2003.                                       
|(8)   | Filed as an exhibit to the Companys
        Current Report on Form 8-K filed on June 13, 2003.                                       
|(9)   | Filed as an exhibit to the Companys Registration
        Statement on Form SB-2 filed on May 19, 2004;                               
|(10)  | Filed as an exhibit to the Companys
        Quarterly Report on Form 10-QSB filed on July 15, 2004.                                  

19

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SIGNATURES

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

|                     | SILVERADO GOLD MINES LTD.                      
|-------------------- | -----------------------------------------------
|                     |                                                
|                     |                                                
|DATE:  July 14, 2006 |                                                
|                     |                                                
|                     | /s/ Garry L. Anselmo                           
|                     | Garry L. Anselmo                               
|                     | President, Chief Executive Officer (Principal  
|                     | Executive Officer), and Chief Financial Officer
|                     | (Principal Financial and Accounting Officer)   

20

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