---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

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

For the quarterly period ended: May 31,2010

or

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

For the transition period from: ___________to ___________

Commission File Number: 000-12132

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

|British Columbia, Canada                                             | 98-0045034                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|1111 West Georgia Street, Suite 1820,                                |                                     
|Vancouver, British Columbia, Canada                                  | V6E 4M3                             
|(Address of principal executive offices)                             | (Zip Code)                          

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

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

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

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

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

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

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date: 1,928,296,
846 common shares, no par value, outstanding as of July 13, 2010.

1

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SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES(An
Exploration Stage Company)

INDEX

Quarterly Period Ended May 31, 2010

Page

|PART I     | FINANCIAL INFORMATION   |                                                                                                                                                                                                                                                                            
|---------- | ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 1                  | FINANCIAL STATEMENTS                                                                                                                                                                                                                                                       
|           |                         |                                                                                                                                                                                                                                                                            
|           |                         | Consolidated
      Balance Sheets as of May 31, 2010 (unaudited) and November 30, 2009
      (audited)                                                                                                                                                                     
|           |                         |                                                                                                                                                                                                                                                                            
|           |                         | Consolidated Statements of Operations and Other Comprehensive
        Loss for the three months and six months ended May 31, 2010 and 2009,
        and for the period from December 1, 2001 (Recommencement of Exploration
        Stage) through May 31, 2010 (unaudited)
|           |                         |                                                                                                                                                                                                                                                                            
|           |                         | Consolidated
      Statements of Cash Flows for the six months ended May 31, 2010 and 2009,
      and for the period from December 1, 2001 (Recommencement of Exploration
      Stage) through May 31, 2010 (unaudited)                                                    
|           |                         |                                                                                                                                                                                                                                                                            
|           |                         | Notes
      to the Consolidated Financial Statements as of May 31, 2010 (unaudited)                                                                                                                                                                                        
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 2                  | MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                                                                                                                                                
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 3                  | QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                                                                                                                                           
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 4                  | CONTROLS
      AND PROCEDURES                                                                                                                                                                                                                                              
|           |                         |                                                                                                                                                                                                                                                                            
|PART II    | OTHER
      INFORMATION |                                                                                                                                                                                                                                                                            
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 1                  | LEGAL
      PROCEEDINGS                                                                                                                                                                                                                                                    
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 2                  | UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                                                                                                                                                                                          
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 3                  | DEFAULTS
      UPON SENIOR SECURITIES                                                                                                                                                                                                                                      
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 4                  | SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                                                                                                                                  
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 5                  | OTHER
      INFORMATION                                                                                                                                                                                                                                                    
|           |                         |                                                                                                                                                                                                                                                                            
|           | ITEM 6                  | EXHIBITS                                                                                                                                                                                                                                                                   
|           |                         |                                                                                                                                                                                                                                                                            
|SIGNATURES |                         | 49                                                                                                                                                                                                                                                                         

2

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|PART I                                        
|----------------------------------------------
|FINANCIAL INFORMATION                         
|                                              
|ITEM 1. FINANCIAL STATEMENTS                  
|                                              
|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES
|(An Exploration Stage Company)                
|CONSOLIDATED BALANCE SHEETS                   
|(Stated In United States Dollars)             

|                                                                                                           |   | May 31, 2010 |   |   | November 30, 2009 |  
|---------------------------------------------------------------------------------------------------------- | - | ------------ | - | - | ----------------- | -
|                                                                                                           |   | (Unaudited)  |   |   | (Audited)         |  
|ASSETS                                                                                                     |   |              |   |   |                   |  
|Current Assets                                                                                             |   |              |   |   |                   |  
|Cash and cash equivalents                                                                                  | $ | 34,298       |   | $ | -                 |  
|Gold inventory                                                                                             |   | 6,316        |   |   | 6,316             |  
|Prepaid and other
      receivables                                                                        |   | 83,796       |   |   | 738,473           |  
|Total Current Assets                                                                                       |   | 124,410      |   |   | 744,789           |  
|Mineral rights                                                                                             |   | 1,478,601    |   |   | 1,398,601         |  
|Property, plant and equipment, net                                                                         |   | 905,206      |   |   | 1,002,009         |  
|TOTAL ASSETS                                                                                               | $ | 2,508,217    |   | $ | 3,145,399         |  
|                                                                                                           |   |              |   |   |                   |  
|LIABILITIES                                                                                                |   |              |   |   |                   |  
|Current Liabilities                                                                                        |   |              |   |   |                   |  
|Accounts payable
      and accrued liabilities                                                             | $ | 1,183,167    |   | $ | 882,768           |  
|Due to related parties                                                                                     |   | 1,001,884    |   |   | 1,064,046         |  
|Promissory note                                                                                            |   | 50,000       |   |   | -                 |  
|Convertible debt instruments                                                                               |   | 178,603      |   |   | 69,760            |  
|Total Current Liabilities                                                                                  |   | 2,413,654    |   |   | 2,016,574         |  
|Asset retirement obligation                                                                                |   | 553,917      |   |   | 540,407           |  
|Mineral claims royalty payable                                                                             |   | 550,000      |   |   | 470,000           |  
|Total Liabilities                                                                                          |   | 3,517,571    |   |   | 3,026,981         |  
|                                                                                                           |   |              |   |   |                   |  
|STOCKHOLDERS' (DEFICIT) EQUITY                                                                             |   |              |   |   |                   |  
|Common stock                                                                                               |   |              |   |   |                   |  
|Authorized: 
                   
      unlimited common shares with no par value                           |   |              |   |   |                   |  
|Issued and outstanding:
      
                   
      1,811,952,777 common shares (2009: 1,577,667,073) |   | 101,936,928  |   |   | 100,883,269       |  
|Additional paid-in capital                                                                                 |   | 1,217,991    |   |   | 1,206,124         |  
|Subscriptions received                                                                                     |   | 80,950       |   |   | 100,000           |  
|Accumulated deficit during exploration stage                                                               |   | (104,245,223 | ) |   | (102,070,975      | )
|Total Stockholders' (Deficit) Equity                                                                       |   | (1,009,354   | ) |   | 118,418           |  
|TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                                       | $ | 2,508,217    |   | $ | 3,145,399         |  

The accompanying notes are an integral part of these
consolidated financial statements 3

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES                          
|------------------------------------------------------------------------
|(An Exploration Stage Company)                                          
|CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
      COMPREHENSIVE LOSS
|(UNAUDITED)                                                             
|(Stated In United States Dollars)                                       

|                                                                             |   |                            |   |   |                          |   |   |                     |   |   |               |   |   | Period Since           |  
|---------------------------------------------------------------------------- | - | -------------------------- | - | - | ------------------------ | - | - | ------------------- | - | - | ------------- | - | - | ---------------------- | -
|                                                                             |   |                            |   |   |                          |   |   |                     |   |   |               |   |   | Recommencement of      |  
|                                                                             |   |                            |   |   |                          |   |   |                     |   |   |               |   |   | Exploration Stage from |  
|                                                                             |   | Three Months Ended May 31, |   |   | Six Months Ended May 31, |   |   | December 1, 2001 to |  
|                                                                             |   | 2010                       |   |   | 2009                     |   |   | 2010                |   |   | 2009          |   |   | May 31 2010            |  
|General and administrative expenses                                          |   |                            |   |   |                          |   |   |                     |   |   |               |   |   |                        |  
|Accounting and auditing                                                      | $ | 11,707                     |   | $ | 28,453                   |   | $ | 18,590              |   | $ | 36,943        |   | $ | 853,712                |  
|Advertising, promotion and travel                                            |   | 3,371                      |   |   | 10,607                   |   |   | 15,422              |   |   | 22,739        |   |   | 3,026,025              |  
|Consulting fees                                                              |   | 298,361                    |   |   | 911,414                  |   |   | 861,528             |   |   | 1,650,057     |   |   | 11,393,216             |  
|Depreciation, accretion and impairment                                       |   | 54,813                     |   |   | 59,349                   |   |   | 110,314             |   |   | 130,334       |   |   | 2,899,561              |  
|Exploration expenses                                                         |   | 193,537                    |   |   | 180,323                  |   |   | 272,514             |   |   | 291,708       |   |   | 15,842,829             |  
|Financing activities                                                         |   | 362                        |   |   | -                        |   |   | 362                 |   |   | -             |   |   | 389,865                |  
|Legal and other professional fees                                            |   | 44,871                     |   |   | 59,006                   |   |   | 236,690             |   |   | 157,607       |   |   | 1,802,837              |  
|Management services                                                          |   | 22,431                     |   |   | 199,179                  |   |   | 68,848              |   |   | 430,873       |   |   | 6,467,835              |  
|Office expenses                                                              |   | 157,781                    |   |   | 84,395                   |   |   | 233,391             |   |   | 169,818       |   |   | 5,183,329              |  
|Related party charges in excess of costs incurred                            |   | 32,743                     |   |   | 144,406                  |   |   | 40,156              |   |   | 291,180       |   |   | 4,951,244              |  
|Reporting and investor relations                                             |   | 72,942                     |   |   | 106,125                  |   |   | 130,981             |   |   | 168,941       |   |   | 1,474,332              |  
|Research                                                                     |   | -                          |   |   | -                        |   |   | -                   |   |   | -             |   |   | 1,064,735              |  
|Transfer agent and filing fees                                               |   | 12,571                     |   |   | 12,151                   |   |   | 30,323              |   |   | 59,484        |   |   | 410,154                |  
|Write-off of mineral claim expenditures                                      |   | -                          |   |   | -                        |   |   | -                   |   |   | -             |   |   | 1,159,529              |  
|Write-down of property, plant and
      equipment                            |   | -                          |   |   | -                        |   |   | -                   |   |   | -             |   |   | 329,679                |  
|Total expenses                                                               |   | 905,490                    |   |   | 1,795,438                |   |   | 2,019,119           |   |   | 3,409,684     |   |   | 57,248,882             |  
|Loss from operations                                                         |   | (905,490                   | ) |   | (1,795,438               | ) |   | (2,019,119          | ) |   | (3,409,684    | ) |   | (57,248,882            | )
|Gold income earned during the exploration stage                              |   |                            |   |   |                          |   |   |                     |   |   |               |   |   |                        |  
|Gold sale proceeds earned during the
      exploration stage                 |   | -                          |   |   | -                        |   |   | -                   |   |   | 52,450        |   |   | 3,714,310              |  
|Cost of gold sold                                                            |   | -                          |   |   | -                        |   |   | -                   |   |   | (43,790       | ) |   | (3,250,373             | )
|Gold inventory addition from gold
      extraction                           |   | -                          |   |   | -                        |   |   | -                   |   |   | -             |   |   | 3,248,056              |  
|Total gold income earned during the exploration
      stage                  |   | -                          |   |   | -                        |   |   | -                   |   |   | 8,660         |   |   | 3,711,993              |  
|Other income (expenses)                                                      |   |                            |   |   |                          |   |   |                     |   |   |               |   |   |                        |  
|Interest and other income                                                    |   | 44                         |   |   | 19                       |   |   | 77                  |   |   | 64            |   |   | 278,067                |  
|Interest expenses on capital lease
      obligations                         |   | -                          |   |   | -                        |   |   | -                   |   |   | -             |   |   | (333,221               | )
|Financing costs on convertible debentures                                    |   | (7,147                     | ) |   | 2,800                    |   |   | (20,710             | ) |   | -             |   |   | (728,193               | )
|Other interest expenses and bank
      charges                               |   | (82,661                    | ) |   | (5,226                   | ) |   | (89,638             | ) |   | (7,098        | ) |   | (161,847               | )
|Commitment fees                                                              |   | -                          |   |   | (960,000                 | ) |   | -                   |   |   | (960,000      | ) |   | (960,000               | )
|Loss on disposal of property, plant
      and equipment                      |   | -                          |   |   | (173,921                 | ) |   | -                   |   |   | (173,921      | ) |   | (279,529               | )
|Forgiveness of convertible debentures
      and accrued interests            |   | -                          |   |   | 260,827                  |   |   | -                   |   |   | 260,827       |   |   | 260,827                |  
|Total other expenses                                                         |   | (89,764                    | ) |   | (875,501                 | ) |   | (110,271            | ) |   | (880,128      | ) |   | (1,923,896             | )
|Net loss before cumulative effect of accounting
      change                 |   | (995,254                   | ) |   | (2,670,939               | ) |   | (2,129,390          | ) |   | (4,281,152    | ) |   | (55,460,785            | )
|Cumulative effect of accounting
      change                                 |   | -                          |   |   | -                        |   |   | -                   |   |   | -             |   |   | (99,481                | )
|Net loss                                                                     |   | (995,254                   | ) |   | (2,670,939               | ) |   | (2,129,390          | ) |   | (4,281,152    | ) |   | (55,560,266            | )
|Other comprehensive income (loss)                                            |   |                            |   |   |                          |   |   |                     |   |   |               |   |   |                        |  
|(Loss) / Gain on foreign exchange                                            |   | (41,817                    | ) |   | (72,747                  | ) |   | (44,858             | ) |   | (23,088       | ) |   | 219,987                |  
|Net comprehensive loss for the
      period                                  | $ | (1,037,071                 | ) | $ | (2,743,686               | ) | $ | (2,174,248          | ) | $ | (4,304,240    | ) | $ | (55,340,279            | )
|Net loss per share                                                           | $ | (0.001                     | ) | $ | (0.003                   | ) | $ | (0.001              | ) | $ | (0.004        | ) |   |                        |  
|Basic and diluted weighted average
      number of common shares outstanding |   | 1,698,496,790              |   |   | 1,194,429,237            |   |   | 1,679,604,824       |   |   | 1,102,804,863 |   |   |                        |  

The accompanying notes are an integral part of these
consolidated financial statements 4

---

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

|                                                                                                |   |                          |   |   |                     |   |   | Period Since           |  
|----------------------------------------------------------------------------------------------- | - | ------------------------ | - | - | ------------------- | - | - | ---------------------- | -
|                                                                                                |   |                          |   |   |                     |   |   | Recommencement of      |  
|                                                                                                |   |                          |   |   |                     |   |   | Exploration Stage from |  
|                                                                                                |   | Six Months Ended May 31, |   |   | December 1, 2001 to |  
|                                                                                                |   | 2010                     |   |   | 2009                |   |   | May
      31, 2010     |  
|CASH AND CASH EQUIVALENTS PROVIDED BY
      (USED IN):                                          |   |                          |   |   |                     |   |   |                        |  
|Operating activities:                                                                           |   |                          |   |   |                     |   |   |                        |  
|Net
      comprehensive loss for the period                                                     | $ | (2,174,248               | ) | $ | (4,304,240          | ) | $ | (55,340,279            | )
|Adjustments to reconcile net
      comprehensive loss to net cash used in operating activities: |   |                          |   |   |                     |   |   |                        |  
|Cumulative effect of accounting change                                                          |   | -                        |   |   | -                   |   |   | 99,481                 |  
|Depreciation, amortization, accretion and impairment                                            |   | 110,314                  |   |   | 130,334             |   |   | 2,899,561              |  
|Loss on disposal of property, plant and equipment                                               |   | -                        |   |   | 173,921             |   |   | 279,529                |  
|Stock-based
      compensation included in management fees                                      |   | -                        |   |   | -                   |   |   | 3,375,644              |  
|Stock issued for debenture                                                                      |   | -                        |   |   | -                   |   |   | 217,687                |  
|Non-cash
      consulting and other expenses resulting from share issuance                      |   | 514,134                  |   |   | 1,330,132           |   |   | 6,400,172              |  
|Non-cash prepaid consulting fees expensed during the period                                     |   | 679,530                  |   |   | 333,500             |   |   | 1,013,030              |  
|Non-cash
      commitment fees resulting from share issuance                                    |   | 61,100                   |   |   | 960,000             |   |   | 1,021,100              |  
|Non-cash financing expense                                                                      |   | -                        |   |   | -                   |   |   | 252,003                |  
|Financing
      costs accrued or incurred on convertible debentures                             |   | 20,710                   |   |   | -                   |   |   | 518,756                |  
|Forgiveness of convertible debentures and accrued interests                                     |   | -                        |   |   | (260,827            | ) |   | (260,827               | )
|Write-off
      of mineral claim expenditures                                                   |   | -                        |   |   | -                   |   |   | 1,159,529              |  
|Write-down of property, plant and equipment                                                     |   | -                        |   |   | -                   |   |   | 329,679                |  
|Changes in non-cash operating
      assets and liabilities:                                     |   |                          |   |   |                     |   |   |                        |  
|Gold inventory                                                                                  |   | -                        |   |   | 43,790              |   |   | 2,317                  |  
|Prepaid and
      other receivables                                                             |   | (3,855                   | ) |   | 5,673               |   |   | (22,588                | )
|Accounts payable and accrued liabilities                                                        |   | 300,398                  |   |   | 159,404             |   |   | 686,260                |  
|Asset
      retirement obligation                                                               |   | -                        |   |   | -                   |   |   | (2,336                 | )
|Net cash used in operating
      activities                                                     |   | (491,917                 | ) |   | (1,428,313          | ) |   | (37,371,282            | )
|                                                                                                |   |                          |   |   |                     |   |   |                        |  
|Investing activities:                                                                           |   |                          |   |   |                     |   |   |                        |  
|Investment in mineral properties                                                                |   | -                        |   |   | -                   |   |   | (1,245,101             | )
|Purchase of
      property, plant and equipment                                                 |   | -                        |   |   | (2,001              | ) |   | (3,079,696             | )
|Proceeds from sale of property,
      plant and equipment, net                                  |   | -                        |   |   | 222,509             |   |   | 825,299                |  
|Net cash provided by (used
      in) investing activities                                       |   | -                        |   |   | 220,508             |   |   | (3,499,498             | )
|                                                                                                |   |                          |   |   |                     |   |   |                        |  
|Financing activities:                                                                           |   |                          |   |   |                     |   |   |                        |  
|Advances (to) from related party                                                                |   | (62,162                  | ) |   | 429,715             |   |   | 710,572                |  
|Repayment of
      loans payable                                                                |   | -                        |   |   | -                   |   |   | (110,728               | )
|Repayment of capital lease
      obligation                                                     |   | -                        |   |   | -                   |   |   | (1,131,607             | )
|Convertible debentures,
      net                                                               |   | 120,000                  |   |   | -                   |   |   | 195,000                |  
|Promissory note                                                                                 |   | 50,000                   |   |   | -                   |   |   | 50,000                 |  
|Share
      subscriptions received                                                              |   | 80,950                   |   |   | 250,000             |   |   | 80,950                 |  
|Common stock issued for cash
      (net of share issue costs)                                   |   | 337,427                  |   |   | 507,000             |   |   | 41,093,798             |  
|Net cash provided by
      financing activities                                                 |   | 526,215                  |   |   | 1,186,715           |   |   | 40,887,985             |  
|                                                                                                |   |                          |   |   |                     |   |   |                        |  
|Increase (Decrease) in
      cash and cash equivalents                                          |   | 34,298                   |   |   | (21,090             | ) |   | 17,205                 |  
|                                                                                                |   |                          |   |   |                     |   |   |                        |  
|Cash and cash equivalents,
      at beginning of the period                                     |   | -                        |   |   | 50,991              |   |   | 17,093                 |  
|                                                                                                |   |                          |   |   |                     |   |   |                        |  
|Cash and cash equivalents,
      at end of the period                                           | $ | 34,298                   |   | $ | 29,901              |   | $ | 34,298                 |  
|Supplemental Cash Flow Information (Note
      14)                                              |   |                          |   |   |                     |   |   |                        |  

The accompanying notes are an integral part of these
consolidated financial statements 5

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 1  Nature and Continuance of Operations

Silverado Gold Mines Ltd. (Silverado or the Company) was
incorporated under the laws of British Columbia, Canada in June 1963. The
Company is engaged in the exploration of mineral properties in the State of
Alaska, through its wholly-owned subsidiary, Silverado Gold Mines Inc.
(incorporated under the laws of the State of Alaska, U.S.A. on May 29, 1981) and
in the research and development of low-rank coal-water fuel as a replacement
fuel for oil fired boilers and utility generators through its other wholly-owned
subsidiary, Silverado Green Fuel, Inc. (incorporated under the laws of the State
of Alaska, U.S.A. on August 14, 2006).

The accompanying interim consolidated financial statements have
been prepared assuming the Company will continue as a going concern, which
implies that the Company would continue to realize its assets and discharge its
liabilities in the normal course of business. The Company lacks sufficient
working capital, has receiving losses and its operations continue to be funded
primarily from sales of its stock and the sale of gold extracted during
exploration activities. The ability of the Company to continue as a going
concern, including completion of the acquisition, exploration and development of
its mineral properties and completion of the research and development of its
low-rank coal-water fuel project is dependent on the Companys ability to obtain
the necessary financing from sales of its stock and debt financings. The
consolidated financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.

Note 2  Basis of Presentation and Summary of Significant
Accounting Policies

These interim consolidated financial statements are prepared in
conformity with United States of America generally accepted accounting
principles (GAAP). The application of Canadian generally accepted accounting
principles to these financial statements would not result in material
measurement or disclosure differences.

The unaudited interim consolidated financial statements do not
include all information and footnote disclosures required under GAAP. In
managements opinion, all adjustments (consisting solely of normal recurring
accruals) considered necessary for a fair presentation of the financial position
as of May 31, 2010, and the results of operations and cash flows for all periods
presented, have been included. Readers of these financial statements should note
that interim results for the periods presented are not necessarily indicative of
the results that can be expected for the entire fiscal year as a whole.

These unaudited interim consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in Silverados Annual Report on Form 10-K, for the fiscal
year ended November 30, 2009.

The financial statements have, in managements opinion, been
properly prepared within the framework of the significant accounting policies
summarized below:

a) Basis of Consolidation

The consolidated financial statements include the accounts of
Silverado Gold Mines Ltd. and its wholly-owned subsidiaries Silverado Gold Mines
Inc. and Silverado Green Fuel Inc. All significant inter-company transactions
have been eliminated.

6

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 2  Basis of Presentation and Summary of Significant
Accounting Policies (Continued)

a) Basis of Consolidation (Continued)

The Company considers its functional currency to be the U.S.
dollar for its U.S. and Canadian operations. Monetary assets and liabilities
denominated in foreign currencies are translated into the U.S. dollar at the
rates of exchange in effect at the consolidated balance sheet date. Non-monetary
assets and liabilities are translated at the rate in effect at the time at which
the transactions took place. Revenue and expense transactions are translated at
the average rate of exchange for the period. Foreign exchange gains and losses
are included in the determination of results from operations for the periods as
other comprehensive gains and losses.

b) Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board (FASB)
issued FASB Accounting Standards Codification (ASC) 105, Generally
Accepted Accounting Principles, which establishes the FASB ASC as the sole
source of authoritative GAAP. All existing accounting standards are superseded
as described in FASB ASC No. 168, aside from those issued by the SEC. All other
accounting literature not included in the Codification is non-authoritative. In
accordance with the ASC, references to previously issued accounting standards
have been replaced by ASC references. Subsequent revisions to GAAP will be
incorporated into the ASC through Accounting Standards Updates (ASU). Pursuant
to this codification, the Company has updated references to GAAP in its
financial statements.

c) Exploration Stage Company

The Company has not generated revenues since recommencement of
the exploration stage from December 1, 2001, and is considered to be in the
development stage, as defined in FASB ASC 915-10-05. However, the Securities and
Exchange Commissions 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 the financial statements, even though such
companies should comply with FASB ASC 915-10-05, if applicable. Accordingly, the
Company has been referred to as an exploration stage company, not a development
stage company. Accumulated results of operations and cash flows are presented
from December 1, 2001, the date the Company re-entered the exploration
stage.

d) Environmental Costs

Environmental expenditures that relate to current operations
are expensed or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations and which do not contribute to
current or future revenue generation are expensed. Liabilities are recorded when
environmental assessments and/or remedial efforts are probable, and the costs
can be reasonably estimated. Generally, the timing of these accruals coincides
with the earlier of completion of a feasibility study or the Companys
commitment to a plan of action based on the then known facts.

7

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 2  Basis of Presentation and Summary of Significant
Accounting Policies (Continued)

e) Basic and Diluted Loss Per Share

Basic loss per share is computed by dividing the loss for the
period by the weighted average number of common shares outstanding during the
period. Diluted earnings per share reflect the potential dilution that could
occur if potentially dilutive securities were exercised or converted to common
stock. The dilutive effect of options and warrants and their equivalent is
computed by application of the treasury stock method and the effect of
convertible securities by the if converted method. Fully diluted amounts are
not presented when the effects of the computations are anti-dilutive due to the
losses incurred. Accordingly, there is no difference in the amounts presented
for basic and diluted loss per share. f) Fair Value of Financial
Instruments

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

The Companys assessment of the significance of a particular
input to the fair value measurements requires judgment, and may affect the
valuation of the assets and liabilities being measured and their placement
within the fair value hierarchy. The carrying value of gold inventory,
receivables, accounts payable and accrued liabilities, mineral claims royalty
payable and payable to related party approximate fair value because of the
short-term maturity of these instruments. The carrying amounts reported in the
balance sheets for convertible debentures approximate their fair values as of
the date of issuance. Unless otherwise noted, it is managements opinion that
the Company is not exposed to significant interest, currency or credit risks
arising from these financial instruments.

g) Convertible Debt Instruments

The Company separately accounts for the liability and equity
components of convertible debentures to reflect the fair value of the liability
component based on our non-convertible borrowing cost at the issuance date.
Accordingly, the Company has recorded the liability components of the
convertible debentures at fair value as of the date of issuance based on
effective interest rate and amortized the resulting discount as an increase to
interest expense over the expected life of the debt. The excess proceeds
received over the fair value of the debt at the date of issuance are attributed
to the conversion feature of the convertible debentures and included in
additional paid-in capital on the consolidated balance sheets. The Company will
account for any embedded conversion features, if there are any, in accordance with
ASC 470-20, Debt With Conversion and Other Options.

h) Gold Inventory

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

8

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 2  Basis of Presentation and Summary of Significant
Accounting Policies (Continued)

i) Income Taxes

The Company accounts for income taxes in accordance with FASB
ASC 740, Income Taxes. FASB ASC 740 prescribes the use of the liability
method thereby deferred tax asset and liability account balances are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. The Company provides a
valuation allowance, if necessary, to reduce deferred tax assets to their
estimated realizable value. Deferred tax assets will be reflected on the balance
sheet when it is determined that it is more likely than not that the asset will
be realized.

FASB ASC 740-10 also clarifies the accounting for income taxes, by
prescribing a minimum recognition threshold a tax position is required to meet
before being recognized in the financial statements. It also provides guidance
on derecognizing, measurement and classification of amounts relating to
uncertain tax positions, accounting for and disclosure of interest and
penalties, accounting in interim periods, disclosures and transition relating to
the adoption of the new accounting standard.

j) Mineral Rights Payments and Exploration Costs

Pursuant to EITF 04-02, Whether Mineral Rights are Tangible
or Intangible Assets and Related Issues, the Company has modified its
accounting policy in 2008 with respect to mineral claim payments, retroactively
effective to June 1, 2004, to capitalize the direct costs to acquire or lease
mineral properties and mineral rights as tangible assets. The direct costs
include the costs of signature (lease) bonuses, options to purchase or lease
properties, and brokers and legal fees. If the acquired mineral rights relate
to unproven properties, the Company does not amortize the capitalized mineral
costs, but evaluates the capitalized mineral costs periodically for impairment.
The Company expenses all costs related to the exploration of mineral claims in
which it had secured exploration rights prior to establishment of proven and
probable reserves.

When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs then incurred to develop such property are capitalized. Capitalized
costs related to such property will be amortized using the units-of-production
method over the estimated life of the probable reserve.

k) Asset Retirement Obligation

The Company adopted FASB ASC
410-20, Asset Retirement Obligations,which addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated retirement costs. The standard
applies to legal obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and normal use of
the asset.

FASB ASC 410-20 requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The fair value of
the liability is added to the carrying amount of the associated asset and this
additional carrying amount is depreciated over the life of the asset. The
liability is accreted at the end of each period through charges to operating
expense. If the obligation is settled for other than the carrying amount of the
liability, the Company will recognize a gain or loss on settlement.

9

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 2  Basis of Presentation and Summary of Significant
Accounting Policies (Continued)

l) Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from these estimates or assumptions.

m) Cash and Cash Equivalents

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

n) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation
is provided on a straight line basis as follows:

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


o) Concentration of Credit Risk and Foreign Exchange Rate
Risk

Financial instruments which potentially subject the Company to
concentrations of credit risk and foreign exchange rate risk consist principally
of cash in banks. The Company deposits its cash in high credit quality financial
institutions which the Company believes reduces these risks.

p) Revenue Recognition

Proceeds from the sale of gold recoveries from test mining are
recorded as other income earned during the exploration stage, retroactively
effective from the period since recommencement of exploration stage from
December 1, 2001.

q) Long Lived Asset Impairment

In accordance with FASB ASC 360-10, Impairment or Disposal
of Long-Lived Assets,long-lived assets held and used by the Company are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The Company
recognizes impairment when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the asset. Impairment losses, if any,
are measured as the excess of the carrying amount of the asset over its
estimated fair value.

10

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 2  Basis of Presentation and Summary of Significant
Accounting Policies (Continued)

r) Accounting for Stock-based Compensation

The Company follows FASB ASC 718, Compensation  Stock
Compensation,requiring equity awards granted under its stock option plan
to be accounted for under the fair value method. Accordingly, share-based
compensation is measured at grant date, based on the fair value of the award.
Prior to December 1, 2006, the Company accounted for awards granted under its
stock option plans utilizing the intrinsic value method prescribed by Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25), and related interpretations, and provided the required
pro forma disclosures prescribed by SFAS 123, Accounting for Stock-Based
Compensation, as amended. Under the existing stock option plans, all
options vest entirely on the grant date. Therefore, there were no partially
vested options outstanding as of the FASB ASC 718 adoption date.

s) Research Expenditures

Research expenditures are expensed in the year incurred.

t) Reclassifications

Certain prior years comparative figures have been reclassified
to conform to the financial statement presentation adopted for this year.

u) Recent Accounting Pronouncements

FASB ASU 2010-17 Revenue Recognition  Milestone Method
(Topic 605) (ASU 2010-17). This Update provides guidance on defining a
milestone under Topic 605 and determining when it may be appropriate to apply
the milestone method of revenue recognition for research or development
transactions. Consideration that is contingent on achievement of a milestone in
its entirety may be recognized as revenue in the period in which the milestone
is achieved only if the milestone is judged to meet certain criteria to be
considered substantive. Milestones should be considered substantive in their
entirety and may not be bifurcated. An arrangement may contain both substantive
and nonsubstantive milestones that should be evaluated individually. The
amendments in this Update are effective on a retrospective or prospective basis
for milestones achieved in fiscal years, and interim periods within those years,
beginning on or after June 15, 2010. Early adoption is permitted. The Company is
currently evaluating the early adoption option and does not anticipate that the
adoption would have a material impact on the consolidated financial
statements.

FASB ASU 2009-13 Multiple-Deliverable Revenue
Arrangements (ASU 2009-13). ASU 2009-13 allows the allocation of
consideration in multiple deliverable arrangements to be more reflective of the
transactions economics and may result in earlier revenue recognition. The new
guidance is effective for fiscal years beginning after June 15, 2010 and may be
applied retrospectively or prospectively for new or materially modified
arrangements. In addition, early adoption is permitted. The Company is currently
evaluating the early adoption option and does not anticipate that the adoption
would have a material impact on the consolidated financial statements.

The Company has evaluated all other recently issued
pronouncements and does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on its
financial position or results of operations.

11

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 3  Gold Inventory

The Companys test production in past years has yielded gold
dust and gold nuggets. Gold dust has yielded sales prices equivalent to the spot
gold price. Gold nuggets, however, are considered to be gem or jewelry items,
which in the industry sell at a higher price than the spot price. They are
valued according to weight, purity, character, and relative flatness (wearing
quality). Historically, the Companys gold nuggets have sold at prices above the
spot gold price.

There were no changes in gold inventory during the six months
ended May 31, 2010. For the six months ended May 31, 2009, the Company sold
58.15 troy ounces of gold for net proceeds of $52,450, which were recorded as
other income earned during the exploration stage. In addition, the Company wrote
off 8.45 troy ounces gold inventory for the inventory shrinkage during the
period ended May 31, 2009, the value of which is $5,556 recorded as cost of gold
sold. The following is a summary of gold inventory changes during the six months
ended May 31, 2010 and during the fiscal year ended November 30, 2009:

|                                |  |                   |   |   | Weighted      |  |   |         |  
|------------------------------- |  | ----------------- | - | - | ------------- |  | - | ------- | -
|                                |  | Troy
      Ounces |   |   | Average price |  |   | Value   |  
|Balance as of November 30, 2008 |  | 76                |   | $ | 657.50        |  | $ | 50,106  |  
|Cost of gold sold               |  | (66               | ) |   | 657.50        |  |   | (43,790 | )
|Balance as of November 30, 2009 |  | 10                |   |   | 657.50        |  |   | 6,316   |  
|Cost of gold sold               |  | -                 |   |   | -             |  |   | -       |  
|Balance as of May 31, 2010      |  | 10                |   | $ | 657.50        |  | $ | 6,316   |  

Note 4  Prepaid and Other Receivables

Prepaid and other receivables consist of:

|                                                                      |   | May
      31, 2010 |  |   | November 30, 2009 | 
|--------------------------------------------------------------------- | - | ------------------ |  | - | ----------------- | 
|Prepaid consulting and other fees resulting
      from share issuance | $ | 58,333             |  | $ | 608,640           | 
|Shares issued for attorney retainer                                   |   | -                  |  |   | 108,225           | 
|Total prepaid expenses sesulting from share
      issuance            |   | 58,333             |  |   | 716,865           | 
|Insurance deposits, GST refund and others                             |   | 25,463             |  |   | 21,608            | 
|Total                                                                 | $ | 83,796             |  | $ | 738,473           | 

During the six months ended May 31, 2010, the Company issued an aggregate of 104,327,983 shares of the Company’s common stock for consulting and other service fees, valued at the fair market price at the dates of the agreements or at the dates of shares issued in accordance with the agreements, for total consideration of $596,233, of which $20,998 was recorded as prepaid expenses based on the terms of the agreements. The Company expensed $20,998 of these prepaid expenses during the six months ended May 31, 2010.

During the fiscal year ended November 30, 2009, the Company
issued an aggregate of 218,319,102 shares of the Companys common stock for
consulting and other service fees, valued at the fair market price at the dates
of the agreements or at the dates of shares issued, for total consideration of
$3,158,697, of which $716,865 was recorded as prepaid expenses. The Company
expensed $658,532 of these prepaid expenses during the six months ended May 31,
2010, and the balance of $58,333 remains in prepaid expenses at May 31, 2010.

12

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 5  Mineral Properties and Mineral Rights

The Company holds interests in four groups of mineral
properties, Nolan, Ester Dome, Hammond and Eagle Creek, in Alaska, U.S.A. All of
these properties are in the exploration stage and have no proven reserves as of
May 31, 2010. The Nolan property has a probable reserve; however, a more
extensive feasibility study is required to ascertain if such probable reserve
can be classified as a proven reserve.

Pursuant to EITF 04-02, Whether Mineral Rights are Tangible
or Intangible Assets and Related Issues, the Company, retroactively
effective to June 1, 2004, has capitalized the direct costs to acquire or lease
mineral properties and mineral rights as tangible assets. The direct costs
include the costs of signature (lease) bonuses, options to purchase or lease
properties, and brokers and legal fees. Since the Company has no proven
reserves on its properties as of May 31, 2010, the Company does not amortize the
capitalized mineral costs, but evaluates the capitalized mineral costs
periodically for impairment in accordance with EITF 04-02 and has not recognized
any impairment. A summary of such capitalized direct costs for the six months
ended May 31, 2010 and for the fiscal year ended November 30, 2009 is as
follows:

|Capitalized Mineral Rights:           |   | Nolan   |  |   | Ester Dome |  |   | Hammond |  |   | Eagle Creek |  |   | Total     | 
|------------------------------------- | - | ------- |  | - | ---------- |  | - | ------- |  | - | ----------- |  | - | --------- | 
|                                      |   | (a)     |  |   | (b)        |  |   | (c)     |  |   | (d)         |  |   |           | 
|Balance as of November 30, 2008       | $ | 658,319 |  | $ | 31,722     |  | $ | 437,500 |  | $ | 70,050      |  | $ | 1,197,591 | 
|Additions during the year:            |   |         |  |   |            |  |   |         |  |   |             |  |   |           | 
|Claim fees paid during
      the year |   | 85,540  |  |   | 8,980      |  |   | 8,400   |  |   | 13,090      |  |   | 116,010   | 
|Royalty payment                       |   | -       |  |   | -          |  |   | -       |  |   | 5,000       |  |   | 5,000     | 
|Accrued royalty payment               |   | -       |  |   | -          |  |   | 80,000  |  |   | -           |  |   | 80,000    | 
|Balance as of November 30, 2009       |   | 743,859 |  |   | 40,702     |  |   | 525,900 |  |   | 88,140      |  |   | 1,398,601 | 
|Additions during the period:          |   |         |  |   |            |  |   |         |  |   |             |  |   |           | 
|Accrued royalty payment               |   | -       |  |   | -          |  |   | 80,000  |  |   | -           |  |   | 80,000    | 
|Balance as of May 31, 2010            | $ | 743,859 |  | $ | 40,702     |  | $ | 605,900 |  | $ | 88,140      |  | $ | 1,478,601 | 

a) Nolan Gold Project, Wiseman Mining District,
Alaska

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

| | i)   | Nolan Placer: This claim group consists of 148 unpatented
      federal placer claims.                                                                                                                        
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                               
| | ii)  | Thompsons Pup: This claim group consists of 6 unpatented
      federal placer claims and is subject to a royalty of 3% of net profits on
      80% of production.                                            
| |      |                                                                                                                                                                                                               
| | iii) | Dionne (Marys Bench): This claim group consists of 15
      unpatented federal placer claims.                                                                                                                
| |      |                                                                                                                                                                                                               
| | iv)  | Smith Creek: This claim group consists of 28 unpatented
      federal placer claims.                                                                                                                          
| |      |                                                                                                                                                                                                               
| | v)   | Marion Creek and Clara Creek: This claim group consists
      of 2 unpatented federal placer mining claims located on Marion Creek and 5
      unpatented federal placer mining claims located on Clara Creek.
| |      |                                                                                                                                                                                                               
| | vi)  | Nolan Lode: this claim group consists of 407 unpatented
      federal lode claims. The lode claims overlie much of the placer properties
      extend beyond them.                                            

13

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 5  Mineral Properties and Mineral Rights
(Continued)

During the fiscal year ended November 30, 2009, the Company
paid claim maintenance and holding fees of $85,540 to the Bureau of Land
Management (BLM). The Company currently is in a transitional phase between
exploration and development on this property. The preliminary feasibility study,
effective January 1, 2009 and amended on June 1, 2009 to reflect additional
data, supported a probable mineral reserve of antimony and gold underlying the
southwestern portion of the Solomon Shear Zone, an area referred to by the
Company as Workmans Bench.

b) Ester Dome Gold Project, Fairbanks Mining District,
Alaska

The Ester Dome Gold Project encompasses all of the Companys
properties on Ester Dome, which is accessible by road 10 miles northwest of
Fairbanks, Alaska. The specific properties at this site are as follows:

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

The Company has maintained claim rental payments and continued
with assessment work for this property. During the fiscal year ended November
30, 2009, the Company paid state mining claim fees of $8,840 to the State of
Alaska Department of Natural Resources and federal mining claim fees of $140 to
BLM.

c) Hammond Property, Wiseman Mining District, Alaska

This property consists of 24 Federal placer claims and 36
Federal lode claims covering one and one-half square miles and adjoining the
Nolan Gold Properties. The Company has leased this property from Alaska Mining
Company, Inc. (Alminco) since December 14, 1994 and is obligated to pay a
royalty equal to 10% of gross production and is subject to a minimum royalty of
$80,000 per year. As of May 31, 2010, the capitalized mineral rights of $605,900 (November 30, 2009: $525,900) for the Hammond property includes royalty accruals totalling $550,000 (November 30, 2009: $470,000) that are unpaid, and are included in mineral claims payable on the accompanying consolidated balance sheets. During the six months ended May 31, 2010, the Company accrued $80,000 in payable royalties. During the fiscal year ended November 30, 2009, the Company paid $8,400 in federal claim fees to BLM.

d) Eagle Creek Property, Fairbanks Mining District,
Alaska

This property consists of 77 state mineral claims. All claims
are contiguous and are located in the Fairbanks North Star Borough. The Company
owns a 50% interest and has an option to purchase a full 100% interest in the
property for $400,000, towards which $43,000 remains to be paid. A payment in
the amount of $5,000 is due on August 1stof each year until the
remaining $43,000 is paid. Such yearly payment is required to keep the option in
good standing. Ownership of the claims is in the name of the Companys
subsidiary, Silverado Gold Mines Inc. During the fiscal year ended November 30,
2009, the Company paid the required $5,000 option payment for the year and paid
$13,090 in state mining claim fees.

14

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 6  Property, Plant and Equipment

Property, plant and equipment primarily include capital expenditure
  associated with the Companys Vancouver office, and mining equipment and
  camp facilities at the Nolan Gold Project in Alaska. In accordance with FASB
  ASC 360-10, Impairment or Disposal of Long-Lived Assets,the
  Company recorded an impairment, as of November 30, 2009, of $12,254 against
  Nolan mining equipment. Depreciation expenses for the six months ended May 31,
  2010 was $96,804 (2009: $116,902).

A summary of the Companys property, plant and equipment for
the six months ended as of May 31, 2010 is as follows:

|                                |   |           |  |   | May
      31, 2010 |  |   |          | 
|------------------------------- | - | --------- |  | - | ------------------ |  | - | -------- | 
|                                |   |           |  |   | Accumulated        |  |   |          | 
|                                |   |           |  |   | Depreciation and   |  |   | Net Book | 
|                                |   | Cost      |  |   | Amortization       |  |   | Value    | 
|Offices                         |   |           |  |   |                    |  |   |          | 
|Office leasehold improvements   | $ | 597,557   |  | $ | 235,434            |  | $ | 362,123  | 
|Computer equipment and software |   | 137,346   |  |   | 131,080            |  |   | 6,266    | 
|Furniture and fittings          |   | 394,358   |  |   | 390,355            |  |   | 4,003    | 
|                                |   |           |  |   |                    |  |   |          | 
|Mining Project                  |   |           |  |   |                    |  |   |          | 
|Nolan gold project buildings    |   | 63,000    |  |   | 63,000             |  |   | -        | 
|Leasehold improvements          |   | 48,123    |  |   | 26,468             |  |   | 21,655   | 
|Nolan mining equipment          |   | 1,017,987 |  |   | 542,909            |  |   | 475,078  | 
|Auto and trucks                 |   | 19,193    |  |   | 7,357              |  |   | 11,836   | 
|Capital assets in construction  |   | 24,245    |  |   | -                  |  |   | 24,245   | 
|                                |   |           |  |   |                    |  |   |          | 
|                                | $ | 2,301,809 |  | $ | 1,396,603          |  | $ | 905,206  | 

A summary of the Companys property, plant and equipment for
the fiscal year ended as of November 30, 2009 is as follows:

|                                |   |           |  |   | November 30, 2009 |  |   |           | 
|------------------------------- | - | --------- |  | - | ----------------- |  | - | --------- | 
|                                |   |           |  |   | Accumulated       |  |   |           | 
|                                |   |           |  |   | Depreciation and  |  |   | Net Book  | 
|                                |   | Cost      |  |   | Amortization      |  |   | Value     | 
|Offices                         |   |           |  |   |                   |  |   |           | 
|Office leasehold improvements   | $ | 597,557   |  | $ | 192,832           |  | $ | 404,725   | 
|Computer equipment and software |   | 137,346   |  |   | 123,232           |  |   | 14,114    | 
|Furniture and fittings          |   | 394,358   |  |   | 390,075           |  |   | 4,283     | 
|Mining Project                  |   |           |  |   |                   |  |   |           | 
|Nolan gold project buildings    |   | 63,000    |  |   | 63,000            |  |   | -         | 
|Leasehold improvements          |   | 48,123    |  |   | 21,655            |  |   | 26,468    | 
|Nolan mining equipment          |   | 1,017,987 |  |   | 503,568           |  |   | 514,419   | 
|Auto and trucks                 |   | 19,193    |  |   | 5,438             |  |   | 13,755    | 
|Capital assets in construction  |   | 24,245    |  |   | -                 |  |   | 24,245    | 
|                                |   |           |  |   |                   |  |   |           | 
|                                | $ | 2,301,809 |  | $ | 1,299,800         |  | $ | 1,002,009 | 

15

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 7  Promissory Note

In February 2010, the Company received $50,000 from an investor
and issued a promissory note dated as of March 1, 2010. The unpaid principal
balance of the note bears interest at a rate equal to twelve percent (12%) per
annum if repaid by the Company within ninety (90) days from the date of the
note, or eighteen percent (18%) per annum if repaid at any time thereafter. The
note matures on September 1, 2010. The Company accrued interest of $1,500 during
the six months ended May 31, 2010.

Note 8  Convertible Debt Instruments a) Convertible
Notes Issued in Fiscal Year 2010

|i)  | On January 22, 2010, the Company entered into a Note
        Purchase Agreement (the Agreement) with St. George Investments,
        LLC (St. George). Pursuant to the terms of the Agreement,
        the Company issued and sold a convertible promissory note, dated January
        22, 2010 (the Note) to St. George for the purchase price of
        $80,000 with a maturity date of March 15, 2010. An origination fee of
        $5,000 was paid by the Company to St. George from the proceeds of the
        sale of the Note and $4,000 of issuance costs was added to the principal
        balance of the note pursuant to the Agreement. The Company failed to repay
        the Note on March 15, 2010. On May 12, 2010, $20,000 of the Note was converted
        into 8,333,333 shares of the Company’s common stock. The remaining
        outstanding principal of $64,000 is in default. The Company and St. George
        are renegotiating the terms of the Agreement.                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Note provides that interest on the unpaid principal
      balance of the Note shall not accrue unless a trigger event, as set forth
      therein, occurs. The Note provides St. George with the option, at any time
      prior to payment in full by the Company, to convert the outstanding amount
      into shares of the Companys common stock. The number of common shares to
      be issued upon conversion shall be determined by dividing the outstanding
      amount by 70% of the average of the three lowest closing bid prices for
      the Companys common stock for the twenty trading days immediately
      preceding the date of the conversion notice.                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company separately accounts for the liability and equity
        components of convertible debentures to reflect the fair value of the
        liability component based on our non-convertible borrowing cost at the
        issuance date. The present value of a non-convertible note of $84,000
        at the issuance date would be valued at $83,056 using the effective interest
        rate of 8.25%. Accordingly, the Company recorded $66,944 of the liability
        components of the convertible note as of the date of issuance and the
        excess proceeds of $8,056 received over the fair value of the debt at
        the date of issuance were attributed to the conversion feature of the
        convertible note and accordingly has been included in additional paid-in
        capital on the consolidated balance sheets. During the six months ended
        May 31, 2010, the Company amortized the resulting discount of $17,056
  as an increase to financing cost expense  which increased the carrying value to $64,000 at May 31, 2010.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|ii) | On April 28, 2010, the Company entered into a Secured Convertible
        Note Agreement (the "Note Agreement") with Bodie Investment
        Group, Inc. Pursuant to the terms of the Note Agreement,
        the Company sold and issued a convertible note in the sum of $50,000 with
        a maturity date of April 28, 2011. An origination fee of $5,000 was paid
        by the Company to the Note holder from the proceeds of the sale of the
        Note. The Note bears no interest and is to be paid in full on the maturity
        date, unless previously paid or converted into the Companys common
        stock. The Note holder has the right to convert any unpaid principal portion,
        at a conversion price per share equal to the lower of $0.003 or 70% of
        the average of the three lowest closing bid prices of the Companys
    common stock for the 20 trading days preceding a conversion date.                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company issued 13,000,000 shares of the Companys
      common stock to the Note holder as compensation costs. Such shares were
      valued at $61,100 using the closing price of the Companys common stock on
      April 27, 2009 and were recorded as financing
costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

16

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 8  Convertible Debt Instruments (Continued)

The Company separately accounts for
  the liability and equity components of convertible debentures to reflect the
  fair value of the liability component based on our non-convertible borrowing
  cost at the issuance date. The present value of a non-convertible note of $50,000
  at the issuance date would be valued at $46,189 using the effective interest
  rate of 8.25% . Accordingly, the Company recorded $41,189 of the liability components
  of the convertible note as of the date of issuance and the excess proceeds of
  $8,811 received over the fair value of the debt at the date of issuance were
  attributed to the conversion feature of the convertible note and accordingly
  has been included in additional paid-in capital on the consolidated balance
  sheets. During the six months ended May 31, 2010, the Company recorded amortization of the resulting discount of $797 as an increase to financing cost expense, and will amortize the remaining discount of $8,014 over the expected life of the debt.  At May 31, 2010, the carrying value of the Note was $41,987.

b) Convertible Note Issued in Fiscal Year 2009

On October 30, 2009, the Company sold and issued a convertible
note in the sum of $75,000 with a maturity date of October 30, 2010. The note
bears no interest and is to be paid in full on the maturity date, unless
previously paid or converted into the Companys common stock. The Note holder
has the right from March 1, 2010 to convert any unpaid principal portion, at a
conversion price per share equal to 70% of the average of the three lowest
closing bid prices of the Companys common stock for the 20 trading days
preceding a conversion date.

The Company issued 5,000,000 shares of the Companys common
stock to the Note holder as compensation and issuance costs reimbursement. Such
shares were valued at $80,000 using the closing price of the Companys common
stock on October 29, 2009 and were recorded as financing costs. The Company also
paid $7,500 cash to a third party as a finders fee on this note.

The present value of a non-convertible note at the issuance date
  would be valued at $69,284 using the effective interest rate of 8.25% . Accordingly,
  the Company recorded $69,284 of the liability components of the convertible
  note as of the date of issuance and the excess proceeds of $5,716 received over
  the fair value of the debt at the date of issuance were attributed to the conversion
  feature of the convertible note and accordingly has been included in additional
  paid-in capital on the consolidated balance sheets. The Company amortized the
  resulting discount of $476 as an increase to financing cost expenses during
  the fiscal year ended November 30, 2009 and $2,856 as an increase to interest
  expenses during the six months ended May 31, 2010, and will amortize the remaining
  discount of $2,384 over the expected life of the debt. At May 31, 2010, the carrying value of the Note was $72,616.

Note 9  Asset Retirement Obligations

Asset retirement obligations relate to the closure and
reclamation of the Grant Mill Tailings Pond and the Mill complex, and to the
reclamation work associated with the Nolan Gold Project consisting of
dismantling and removal of site structures and equipment, and reshaping and
revegetating the disturbed areas. The Company has no assets legally restricted
for purposes of settling asset retirement obligations. A summary of assets
retirement obligation for the six months ended May 31, 2010 and the fiscal year
ended November 30, 2009 is as follows:

|                           |   | Grant   |   |   | Nolan   |   |   |         |  
|-------------------------- | - | ------- | - | - | ------- | - | - | ------- | -
|                           |   | Mine    |   |   | Project |   |   | Total   |  
|Balance, November 30, 2008 | $ | 364,651 |   | $ | 172,607 |   | $ | 537,258 |  
|Accretion expense          |   | 18,233  |   |   | 8,630   |   |   | 26,863  |  
|Liabilities settled        |   | (14,000 | ) |   | (4,258  | ) |   | (18,258 | )
|Reclamation bond refunded  |   | -       |   |   | (5,456  | ) |   | (5,456  | )
|Balance, November 30, 2009 |   | 368,884 |   |   | 171,523 |   |   | 540,407 |  
|Accretion expense          |   | 9,222   |   |   | 4,288   |   |   | 13,510  |  
|Balance, May 31, 2010      | $ | 378,106 |   | $ | 175,811 |   | $ | 553,917 |  

17

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 9  Asset Retirement Obligations (Continued)

Grant Mine

The Grant Mine is not an active mine and related assets were
written off as impaired effective December 1, 2001. The retirement obligations
associated with the Grant Mine involves the decommissioning of the Grant Mill
Tailings Pond and the Mill complex that was built in the early 1980s and no
longer used after 1989.

The Company has retained a geotechnical and environmental
consulting firm to assist with a preliminary report for the closure of the
tailings pond. The preliminary report is part of the closure plan, and further
reclamation work involves another closure phase that needs permits and/or
approval by the State of Alaska regulatory agencies.

The Company believes that the estimated fair value of the cost
of reclamation at this time will approximate the accrued obligations plus 5%
accretion expense per annum until reclaimed. During the six months ended May 31,
2010, the Company recorded $9,222 accretion expense. During the fiscal year
ended November 30, 2009, the Company recorded $18,233 accretion expense, paid
$1,511 to the State of Alaska regulatory agencies and spent another $12,489 on
the Grant Mine closure.

Nolan Gold Project

The retirement obligations associated with the Nolan mineral
properties are associated with the reclamation of disturbed land resulting from
normal operations and are not the result of improper operations of an asset such
as environmental remediation liabilities. The Nolan mineral properties are on
Federal mining claims and thus are under the active supervision of the Bureau of
Land Management.

The Company was bonded for 48.5 acres before the start of 2008
and 27.5 acres were reclaimed at Nolan Creek in 2008. During the fiscal year
ended November 30, 2009, the Company received refunds of $5,456 from the
reclamation bond deposited for these reclaimed 27.5 acres. As of May 31, 2010
and November 30, 2009, the Company is obligated to reclaim 21 acres at Nolan
Creek. These 21 acres are areas essential for the Companys operations and
consist of the camp area, equipment storage area, processing area, explosives
storage area, and the portal area, as well as the roads and core storage area.

The Company believes that the remaining accrued obligations
plus 5% accretion expense per annum until the remaining 21 acres are reclaimed
is sufficient to cover the cost of reclamation. During the six months ended May
31, 2010, the Company recorded $4,288 accretion expense. During the fiscal year
ended November 30, 2009, the Company recorded $8,630 accretion expense and spent
$4,258 on reclamation at Nolan properties.

Note 10  Related Party Transactions

(a) Service Agreements

The Company has had related party transactions with Tri-Con
Mining Ltd., Tri-Con Mining Inc. and Tri-Con Mining Alaska Inc. (collectively,
the Tri-Con Group), all of which are controlled by a director and officer of
the Company.

The Tri-Con Group are operations, exploration and development
contractors and have been employed by the Company under contract since 1972 to
carry out all the Companys fieldwork and to provide administrative and
management services. Under the current contracts dated January 1, 1997, Tri-Con
Group has billed the Company cost plus 25% for exploration and cost plus 15% for
development and mining. The term cost means out-of-pocket or actual cost
incurred by Tri-Con Group plus 15% for office overhead including stand-by and
contingencies. There is no mark-up on capital purchases. The Tri-Con Group does
not charge the Company for the services of its directors who are also directors
of the Company. In addition, per the terms of the agreements, the Company paid a
base administration fee of CDN $10,000 per month to Tri-Con Mining Ltd. and US
$10,000 per month to Tri-Con Mining Inc., respectively.

18

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 10  Related Party Transactions (Continued)

(a) Service Agreements (Continued)

During the six months ended May 31, 2010, the Tri-Con Groups
services focused mainly on corporate planning; mining, drilling and engineering
planning and preparation for production on the Companys Nolan property; and
administration services. During the period ended May 31, 2010, there were
nominal exploration activities due to the Companys cash flow constraints and
consequently the Tri-Con Group waived the US $10,000 monthly fee for the six months ended
May 31, 2010, and the CDN $10,000 monthly fee for the three months ended
February 28, 2010 for a total of US $88,511. As of May 31, 2010, Silverado owed
$1,001,884 (November 30, 2009: $1,064,046) to the Tri-Con Group for exploration
and administration services performed on behalf of Silverado. The following is a
summary of Tri-Con Group charges for the six months ended May 31, 2010 and 2009:

|                                                                        |   | Six Months Ended   | 
|----------------------------------------------------------------------- | - | ------------------ | 
|                                                                        |   | May
      31, 2010 | 
|Exploration Services                                                    | $ | -                  | 
|Administration and management services                                  |   | 115,210            | 
|                                                                        | $ | 115,210            | 
|                                                                        |   |                    | 
|Amount of total charges in excess of the
      Cost                     | $ | 40,156             | 
|                                                                        |   |                    | 
|Percentage of excess of the Cost charged
      over total amount billed |   | 35.16%             | 

During the six months ended May 31, 2010, Tri-Con Group billed
the Company CDN $ 9,375 (2009: CDN $35,325) plus 15% office overhead as the Cost
plus markups for services performed on behalf of Silverado by a Tri-Con Group
employee who is related to a director and chief executive officer of the
Company.

(b) Consulting Agreement

Effective April 1, 2009, a consulting agreement was signed between
  the Company and a private company controlled by a former director of the Company
  who resigned on April 20, 2010. Pursuant to the agreement, the Company agreed
  to pay the private company CDN $7,500 plus GST per month for corporate planning,
  business development and investor relations services, as requested by the Company.
  During the six months ended May 31, 2010, the Company was billed CDN $45,000
  plus GST by the private company controlled by the former director pursuant to the terms
  of the consulting agreement. During fiscal year 2009, the Company paid $64,644
  (CDN $74,793, including GST) to the private company, and the Company also issued
  a total of 6,555,000 shares of its common stock to the former director for payment
  of an additional $57,029 owed to the private company under the consulting agreement.
  During the six months ended May 31, 2010, the Company issued a total of 7,735,248
  shares of its common stock to the former director for payment of an additional
  $37,305 owed to the private company under the consulting agreement.

Note 11  Common Stock

The authorized common stock of the Company consists of an
unlimited number of common shares, without par value. The following is a summary
of the Companys issuances of common stock during the six months ended May 31,
2010:

19

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

|                                                                                    |  | Number of     |   |   | Common      |   |   |              |  
|----------------------------------------------------------------------------------- |  | ------------- | - | - | ----------- | - | - | ------------ | -
|                                                                                    |  | Common        |   |   | Stock -     |   |   | Shares to be |  
|                                                                                    |  | Shares        |   |   | Amount      |   |   | Issued       |  
|                                                                                    |  |               |   |   |             |   |   |              |  
|Balance, November 30, 2009                                                          |  | 1,577,667,073 |   | $ | 100,883,269 |   | $ | 100,000      |  
|Shares Issued:                                                                      |  |               |   |   |             |   |   |              |  
|For Private Placements                                                              |  |               |   |   |             |   |   |              |  
|December 31, 2009 @ $0.01 per unit (1 unit = 1 share
      and 1 warrant) cancelled |  | (1,000,000    | ) |   | (10,000     | ) |   | -            |  
|January 04, 2010 @ $0.01 per unit (1
      unit = 1 share and 1 warrant)            |  | 1,500,000     |   |   | 15,000      |   |   | (15,000      | )
|January 04, 2010 @ $0.0035 per unit (1 unit = 1 share
      and 1 warrant)          |  | 25,785,715    |   |   | 90,250      |   |   | (35,000      | )
|January 26, 2010 @ $0.01 per unit (1
      unit = 1 share and 1/2 warrant)          |  | 5,000,000     |   |   | 50,000      |   |   | (50,000      | )
|January 26, 2010 @ $0.0035 per unit (1 unit = 1 share
      and 1 warrant)          |  | 5,714,286     |   |   | 20,000      |   |   | -            |  
|March 24, 2010 @ $0.0035 per share (1
      unit = 1 share and 1 warrant)           |  | 32,376,337    |   |   | 113,317     |   |   | -            |  
|April 8, 2010 @ $0.0035 per share (1 unit = 1 share
      and 1 warrant)            |  | 3,300,000     |   |   | 11,550      |   |   | -            |  
|May 26, 2010 @ $0.0035 per share (1
      unit = 1 share and 1 warrant)             |  | 930,500       |   |   | 3,257       |   |   | -            |  
|                                                                                    |  | 73,606,838    |   |   | 293,374     |   |   | (100,000     | )
|For Warrants                                                                        |  |               |   |   |             |   |   |              |  
|March 05, 2010 @ $0.003 per share                                                   |  | 10,000,000    |   |   | 30,000      |   |   | -            |  
|March 17, 2010 @ $0.003 per share                                                   |  | 20,500,000    |   |   | 61,500      |   |   | -            |  
|April 8, 2010 @ $0.003 per share                                                    |  | 14,017,550    |   |   | 42,053      |   |   | -            |  
|April 14, 2010 @ $0.003 per share                                                   |  | 1,000,000     |   |   | 3,000       |   |   | -            |  
|April 30, 2010 @ $0.003 per share                                                   |  | 1,000,000     |   |   | 3,000       |   |   | -            |  
|May 13, 2010 @ $0.003 per share                                                     |  | 500,000       |   |   | 1,500       |   |   | -            |  
|May 25, 2010 @ $0.003 per share                                                     |  | 1,000,000     |   |   | 3,000       |   |   | -            |  
|                                                                                    |  | 48,017,550    |   |   | 144,053     |   |   | -            |  
|For Consulting Fees                                                                 |  |               |   |   |             |   |   |              |  
|December 15, 2009 @ $0.007 per share                                                |  | 3,000,000     |   |   | 21,000      |   |   | -            |  
|January 11, 2010 @ $0.00777838 per share                                            |  | 1,238,750     |   |   | 9,635       |   |   | -            |  
|January 11, 2010 @ $0.008 per share                                                 |  | 2,196,875     |   |   | 17,575      |   |   | -            |  
|January 15, 2010 @ $0.007 per share                                                 |  | 8,000,000     |   |   | 56,000      |   |   | -            |  
|January 26, 2010 @ $0.0073 per share                                                |  | 5,000,000     |   |   | 36,500      |   |   | -            |  
|January 29, 2010 @ $0.0073 per share                                                |  | 4,123,987     |   |   | 30,105      |   |   | -            |  
|February 12, 2010 @ $0.0058 per share                                               |  | 1,759,724     |   |   | 10,206      |   |   | -            |  
|April 21, 2010 @ $0.0049 per share                                                  |  | 6,021,024     |   |   | 30,105      |   |   | -            |  
|April 23, 2010 @ $0.0049 per share                                                  |  | 30,000,000    |   |   | 147,000     |   |   | -            |  
|                                                                                    |  | 61,340,360    |   |   | 358,127     |   |   | -            |  
|For Investor Relation and Shareholder
      Communication Services                  |  |               |   |   |             |   |   |              |  
|December 17, 2009 @ $0.00888 per share                                              |  | 1,718,325     |   |   | 15,259      |   |   | -            |  
|February 12, 2010 @ $0.0058 per share                                               |  | 2,664,310     |   |   | 15,453      |   |   | -            |  
|                                                                                    |  | 4,382,635     |   |   | 30,712      |   |   | -            |  
|For Legal, Financing and Other Service
      Fees                                   |  |               |   |   |             |   |   |              |  
|January 26, 2010 @ $0.0076 per share                                                |  | 7,000,000     |   |   | 53,200      |   |   | -            |  
|March 18, 2010 @ $0.0058 per share                                                  |  | 5,474,757     |   |   | 31,753      |   |   | -            |  
|April 16, 2010 @ $0.0049 per share                                                  |  | 7,436,709     |   |   | 36,440      |   |   | -            |  
|April 28, 2010 @ $0.0049 per share                                                  |  | 2,467,392     |   |   | 11,350      |   |   | -            |  
|April 28, 2010 @ $0.0047 per share                                                  |  | 13,000,000    |   |   | 61,100      |   |   | -            |  
|May 27, 2010 @ $0.0042 per share                                                    |  | 3,226,130     |   |   | 13,550      |   |   | -            |  
|                                                                                    |  | 38,604,988    |   |   | 207,393     |   |   | -            |  
|For Conversion of Debenture                                                         |  |               |   |   |             |   |   |              |  
|May 12, 2010 @ $0.0024 per share                                                    |  | 8,333,333     |   |   | 20,000      |   |   | -            |  
|                                                                                    |  | 8,333,333     |   |   | 20,000      |   |   | -            |  
|Other stockholders' equity                                                          |  |               |   |   |             |   |   |              |  
|Share Subscriptions Received for Private
      Placements                           |  | -             |   |   | -           |   |   | 66,250       |  
|Share Subscriptions Received for Warrants Exercise                                  |  | -             |   |   | -           |   |   | 14,700       |  
|                                                                                    |  | -             |   |   | -           |   |   | 80,950       |  
|Balance, May 31, 2010                                                               |  | 1,811,952,777 |   | $ | 101,936,928 |   | $ | 80,950       |  

20

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 11  Common Stock (Continued)

The following is a summary of the Companys issuances of common
stock for the fiscal year ended November 30, 2009:

|                                                                             |  | Number of   |  |   | Common     |  |   |              | 
|---------------------------------------------------------------------------- |  | ----------- |  | - | ---------- |  | - | ------------ | 
|                                                                             |  | Common      |  |   | Stock -    |  |   | Shares to be | 
|                                                                             |  | Shares      |  |   | Amount     |  |   | Issued       | 
|Balance, November 30, 2008                                                   |  | 977,437,101 |  | $ | 94,718,072 |  | $ | -            | 
|Shares Issued:                                                               |  |             |  |   |            |  |   |              | 
|For Private Placements                                                       |  |             |  |   |            |  |   |              | 
|December 31, 2008 @ $0.00383 per share                                       |  | 18,260,870  |  |   | 70,000     |  |   | -            | 
|February 25, 2009 @ $0.004 per
      share                                   |  | 19,250,000  |  |   | 77,000     |  |   | -            | 
|March 27, 2009 @ $0.0025 per share                                           |  | 38,000,000  |  |   | 95,000     |  |   | -            | 
|May 06, 2009 @ $0.01 per share                                               |  | 25,000,000  |  |   | 250,000    |  |   | -            | 
|May 14, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)         |  | 3,000,000   |  |   | 30,000     |  |   | -            | 
|May 15, 2009 @ $0.01 per unit
      (1 unit = 1 share and 1 warrant)         |  | 1,000,000   |  |   | 10,000     |  |   | -            | 
|June 02, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)        |  | 500,000     |  |   | 5,000      |  |   | -            | 
|June 03, 2009 @ $0.01 per unit
      (1 unit = 1 share and 1 warrant)        |  | 2,000,000   |  |   | 20,000     |  |   | -            | 
|June 12, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)        |  | 4,900,000   |  |   | 49,000     |  |   | -            | 
|June 12, 2009 @ $0.01 per unit
      (1 unit = 1 share and 1/2 warrant)      |  | 10,000,000  |  |   | 100,000    |  |   | -            | 
|June 16, 2009 @ $0.01 per share                                              |  | 9,500,000   |  |   | 95,000     |  |   | -            | 
|June 22, 2009 @ $0.01 per unit
      (1 unit = 1 share and 1 warrant)        |  | 1,500,000   |  |   | 15,000     |  |   | -            | 
|July 03, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)        |  | 1,000,000   |  |   | 10,000     |  |   | -            | 
|July 03, 2009 @ $0.01 per
      share (1 unit = 1 share and 1/2 warrant)     |  | 9,000,000   |  |   | 90,000     |  |   | -            | 
|July 22, 2009 @ $0.01 per share                                              |  | 13,500,000  |  |   | 135,000    |  |   | -            | 
|July 27, 2009 @ $0.01 per unit
      (1 unit = 1 share and 1 warrant)        |  | 4,000,000   |  |   | 40,000     |  |   | -            | 
|August 12, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)      |  | 2,000,000   |  |   | 20,000     |  |   | -            | 
|August 17, 2009 @ $0.01 per
      unit (1 unit = 1 share and 1 warrant)      |  | 2,500,000   |  |   | 25,000     |  |   | -            | 
|August 27, 2009 @ $0.01 per unit (1 unit = 1
      share and 1/2 warrant)    |  | 23,500,000  |  |   | 235,000    |  |   | -            | 
|August 27, 2009 @ $0.01 per
      unit (1 unit = 1 share and 1 warrant)      |  | 1,000,000   |  |   | 10,000     |  |   | -            | 
|August 28, 2009 @ $0.01 per share                                            |  | 5,000,000   |  |   | 50,000     |  |   | -            | 
|August 28, 2009 @ $0.01 per
      unit (1 unit = 1 share and 1/2 warrant)    |  | 2,000,000   |  |   | 20,000     |  |   | -            | 
|September 18, 2009 @ $0.01 per unit (1 unit =
      1 share and 1 warrant)   |  | 2,000,000   |  |   | 20,000     |  |   | -            | 
|September 29, 2009 @ $0.01 per
      unit (1 unit = 1 share and 1 warrant)   |  | 20,000,000  |  |   | 200,000    |  |   | -            | 
|September 29, 2009 @ $0.01 per unit (1 unit =
      1 share and 1/2 warrant) |  | 12,500,000  |  |   | 125,000    |  |   | -            | 
|October 06, 2009 @ $0.01 per
      unit (1 unit = 1 share and 1 warrant)     |  | 4,500,000   |  |   | 45,000     |  |   | -            | 
|November 03, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)    |  | 5,000,000   |  |   | 50,000     |  |   | -            | 
|November 09, 2009 @ $0.005 per
      share                                   |  | 40,000,000  |  |   | 200,000    |  |   | -            | 
|November 18, 2009 @ $0.01 per unit (1 unit = 1
      share and 1 warrant)    |  | 1,500,000   |  |   | 15,000     |  |   | -            | 
|                                                                             |  | 281,910,870 |  |   | 2,106,000  |  |   | -            | 
|For Consulting Fees and Other Expenses                                       |  |             |  |   |            |  |   |              | 
|January 28, 2009 @ $0.0125 per
      share                                   |  | 1,000,000   |  |   | 12,500     |  |   | -            | 
|January 29, 2009 @ $0.0125 per share                                         |  | 25,000,000  |  |   | 312,500    |  |   | -            | 
|January 29, 2009 @ $0.03 per
      share                                     |  | 25,000,000  |  |   | 750,000    |  |   | -            | 
|February 12, 2009 @ $0.0085 per share                                        |  | 6,000,000   |  |   | 51,000     |  |   | -            | 
|February 12, 2009 @ $0.01 per
      share                                    |  | 2,000,000   |  |   | 20,000     |  |   | -            | 
|February 13, 2009 @ $0.0087 per share                                        |  | 15,000,000  |  |   | 130,500    |  |   | -            | 
|February 13, 2009 @ $0.00333
      per share                                 |  | 3,109,800   |  |   | 10,356     |  |   | -            | 
|March 27, 2009 @ $0.0125 per share                                           |  | 20,000,000  |  |   | 250,000    |  |   | -            | 
|March 27, 2009 @ $0.0125 per
      share                                     |  | 9,000,000   |  |   | 112,500    |  |   | -            | 
|April 13, 2009 @ $0.013 per share                                            |  | 15,000,000  |  |   | 195,000    |  |   | -            | 
|June 03, 2009 @ $0.012 per
      share                                       |  | 30,000,000  |  |   | 360,000    |  |   | -            | 
|August 18, 2009 @ $0.018 per share                                           |  | 5,000,000   |  |   | 90,000     |  |   | -            | 
|August 21, 2009 @ $0.014 per
      share                                     |  | 20,000,000  |  |   | 280,000    |  |   | -            | 
|October 29, 2009 @ $0.0154 per share                                         |  | 3,500,000   |  |   | 53,900     |  |   | -            | 

21

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 11  Common Stock (Continued)

|                                                                   |  | Number of     |  |   | Common      |   |   |              | 
|------------------------------------------------------------------ |  | ------------- |  | - | ----------- | - | - | ------------ | 
|                                                                   |  | Common        |  |   | Stock -     |   |   | Shares to be | 
|                                                                   |  | Shares        |  |   | Amount      |   |   | Issued       | 
|November 03, 2009 @ $0.018 per
      share                         |  | 5,000,000     |  |   | 90,000      |   |   | -            | 
|November 18, 2009 @ $0.0148 per share                              |  | 5,000,000     |  |   | 74,000      |   |   | -            | 
|November 23, 2009 @ $0.0118
      per share                        |  | 4,000,000     |  |   | 47,200      |   |   | -            | 
|                                                                   |  | 193,609,800   |  |   | 2,839,456   |   |   | -            | 
|For Investor Relation and Shareholder
      Communication Services |  |               |  |   |             |   |   |              | 
|February 13, 2009 @ $0.0051 per share                              |  | 6,555,000     |  |   | 33,431      |   |   | -            | 
|March 27, 2009 @ $0.00644 per
      share                          |  | 2,112,069     |  |   | 13,602      |   |   | -            | 
|May 15, 2009 @ $0.0122 per share                                   |  | 357,965       |  |   | 4,367       |   |   | -            | 
|June 03, 2009 @ $0.01063 per
      share                           |  | 505,927       |  |   | 5,378       |   |   | -            | 
|July 03, 2009 @ $0.01504 per share                                 |  | 376,430       |  |   | 5,662       |   |   | -            | 
|July 31, 2009 @ $0.01478 per
      share                           |  | 353,379       |  |   | 5,223       |   |   | -            | 
|August 27, 2009 @ $0.016965 per share                              |  | 342,343       |  |   | 5,808       |   |   | -            | 
|October 06, 2009 @ $0.0175 per
      share                         |  | 333,618       |  |   | 5,838       |   |   | -            | 
|October 20, 2009 @ $0.01733 per share                              |  | 345,493       |  |   | 5,987       |   |   | -            | 
|November 24, 2009 @ $0.01392
      per share                       |  | 427,078       |  |   | 5,945       |   |   | -            | 
|                                                                   |  | 11,709,302    |  |   | 91,241      |   |   | -            | 
|For Commitment, Legal and Financing Fees                           |  |               |  |   |             |   |   |              | 
|May 06, 2009 @ $0.0096 per share                                   |  | 100,000,000   |  |   | 960,000     |   |   | -            | 
|October 20, 2009 @ $0.0185 per
      share                         |  | 8,000,000     |  |   | 148,000     |   |   | -            | 
|November 04, 2009 @ $0.016 per share                               |  | 5,000,000     |  |   | 80,000      |   |   | -            | 
|                                                                   |  | 113,000,000   |  |   | 1,188,000   |   |   | -            | 
|Share Subscriptions Received                                       |  | -             |  |   | -           |   |   | 100,000      | 
|                                                                   |  |               |  |   |             |   |   |              | 
|Share Issue Costs                                                  |  | -             |  |   | (59,500     | ) |   | -            | 
|                                                                   |  |               |  |   |             |   |   |              | 
|Balance, November 30, 2009                                         |  | 1,577,667,073 |  | $ | 100,883,269 |   | $ | 100,000      | 

a) Private Placements

For the six months ended May 31, 2010

During the six months ended May 31, 2010, the Company completed
a private placement resulting in the issuance of 1,500,000 units at $0.01 per
unit. Each unit consisted of one share of common stock and one common stock
purchase warrant exercisable for a number of additional shares of common stock
equal to the number of units purchased, at a per share exercise price of $0.02
within the one year period commencing from the date of the subscription
agreement. The Company received gross proceeds of $15,000 from such private
placement. In December 2009, a subscription agreement related to 1,000,000 units
at $0.01 per unit was cancelled and issued units were returned and cancelled
accordingly.

During the six months ended May 31, 2010, the Company completed
a private placement resulting in the issuance of 5,000,000 units at $0.01 per
unit. Each unit consisted of one share of common stock and one half-warrant,
with a full warrant (consisting of two half-warrants) being exercisable for one
share of common stock at a per share exercise price of $0.02 within the one year
period commencing from the date of the subscription agreement. The Company
received proceeds of $50,000 from such private placement.

22

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 11  Common Stock (Continued)

a) Private Placements (Continued)

During the six months ended May 31, 2010, the Company also
completed private placements resulting in the issuance of an aggregate of
68,106,838 units at $0.0035 per unit. Each unit consisted of one share of common
stock and one common stock purchase warrant exercisable for a number of
additional shares of common stock equal to the number of units purchased, at a
per share exercise price of $0.01 within the one year period commencing from the
date of the subscription agreement. The Company received gross proceeds of
$238,374 from such private placements.

For the fiscal year ended November 30, 2009

During the fiscal year ended November 30, 2009, the Company
completed private placements resulting in the issuance of an aggregate of
18,260,870 common shares at $0.0038 per share, 19,250,000 common shares at
$0.004 per share, 38,000,000 common shares at $0.0025 per share, 40,000,000
common shares at $0.005 per share and 18,500,000 common shares at $0.01 per
share. The Company received aggregate gross proceeds of $627,000 from such
private placements and paid related commission fees of $20,000 which was
recorded as a reduction of common stock.

In addition, during the fiscal year ended November 30, 2009,
the Company completed private placements resulting in the issuance of 34,500,000
common shares at a price of $0.01 per share. These private placements generated
gross proceeds of $345,000 from the sale of shares related to the Equity Line of
Credit Agreement (see Note 11(c), below). In accordance with the Equity Line of
Credit Agreement, the Company paid commission fees of $34,500 which was recorded
as a reduction of common stock.

During the fiscal year ended November 30, 2009, the Company
completed private placements resulting in the issuance of an aggregate of
56,400,000 units at $0.01 per unit. Each unit consisted of one share of common
stock and one common stock purchase warrant exercisable for a number of
additional shares of common stock equal to the number of units purchased, at a
per share exercise price of $0.02 within the one year period commencing from the
date of the subscription agreement. The Company received gross proceeds of
$564,000 from such private placements and paid commission fees of $5,000 which
was recorded as a reduction of common stock. Subsequent to November 30, 2009, a
subscription agreement related to 1,000,000 units was cancelled and issued units
were returned and cancelled accordingly.

During the fiscal year ended November 30, 2009, the Company
also completed private placements resulting in the issuance of an aggregate of
57,000,000 units at $0.01 per unit. Each unit consisted of one share of common
stock and one half-warrant, with a full warrant (consisting of two
half-warrants) being exercisable for one share of common stock at a per share
exercise price of $0.02 within the one year period commencing from the date of
the subscription agreement. The Company received proceeds of $570,000 from such
private placements.

23

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 11  Common Stock (Continued)

a) Private Placements (Continued)

As of November 30, 2009, the Company received $65,000 for the
sale of an aggregate of 6,500,000 common shares and 4,000,000 common stock
purchase warrants. Each common stock purchase warrant is exercisable for an
additional share of common stock at a per share exercise price of $0.02 within
the one year period commencing from the date of the subscription agreement. The
Company also received $35,000 for the sale of an aggregate of 10,000,000 units
at a price of $0.0035 per unit. Each unit consisted of one share of common stock
and one common stock purchase warrant exercisable at a per share exercise price
of $0.01 for the purchase of one share of common stock within the one year
period commencing from the subscription agreement. These private placements were
not completed as of November 30, 2009, as shares had not been issued as of such
date, but the purchase price received has been reflected as subscriptions
received in stockholders equity in the accompanying balance sheet. The Company
completed such private placements during the six months ended May 31, 2010.

b) Common Stock Issued under Equity Compensation
Plans

A summary of common stock issued under equity compensation
plans (See Note 12(a)  Equity Compensation Plans, below) for the six months
ended May 31, 2010 and the fiscal year ended November 30, 2009 is as
follows:

|                                                          |  | May 31, 2010 |  |   | November 30, 2009 | 
|--------------------------------------------------------- |  | ------------ |  | - | ----------------- | 
|                                                          |  | Number of    |  |   | Value of          | 
|                                                          |  | Shares       |  |   | Shares            | 
|Shares issued for consulting fees:                        |  |              |  |   |                   | 
|Recorded as consulting fees                               |  | 60,034,964   |  | $ | 348,794           | 
|Recorded as prepaid expenses                              |  | 1,305,396    |  |   | 9,333             | 
|Subtotal:                                                 |  | 61,340,360   |  |   | 358,127           | 
|Shares issued for legal and other fees:                   |  |              |  |   |                   | 
|Recorded as legal and other fees                          |  | 25,604,988   |  |   | 146,294           | 
|Recorded as prepaid expenses                              |  | -            |  |   | -                 | 
|Subtotal:                                                 |  | 25,604,988   |  |   | 146,294           | 
|Shares issued for investor relations and                  |  |              |  |   |                   | 
|shareholders communication services                       |  |              |  |   |                   | 
|Recorded as investor relations fees                       |  | 2,718,027    |  |   | 19,047            | 
|Recorded as prepaid expenses                              |  | 1,664,608    |  |   | 11,665            | 
|Subtotal:                                                 |  | 4,382,635    |  |   | 30,712            | 
|Total shares issued under equity
      compensation plans |  | 91,327,983   |  | $ | 535,133           | 

For the six months ended May 31, 2010

Pursuant to several agreements for corporate planning, business
development and strategies, legal services and media solutions services, the
Company issued an aggregate of 91,327,983 shares of the Companys unrestricted
free trading common stock during the six months ended May 31, 2010, valued at
the fair market price at the dates of agreements or at the dates of shares
issued, for total consideration of $535,133.  These
shares were issued under the Companys Equity Compensation Plans (See Note 12(a)
 Equity Compensation Plans, below).

24

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 11  Common Stock (Continued)

b) Common Stock Issued under Equity Compensation Plans
(Continued)

For the fiscal year ended November 30, 2009

During the fiscal year ended November 30, 2009, the Company
entered into several agreements for corporate planning, business development and
strategies, legal services and media solutions services. Pursuant to these
agreements, the Company issued an aggregate of 188,609,800 shares of the
Companys unrestricted free trading common stock and 5,000,000 shares of the
Companys restricted common stock, valued at the fair market price at the dates
of agreements, for total consideration of $2,839,456. Of this amount $2,230,816
was recorded as consulting fees and $608,640 was recorded as prepaid expenses.
These shares were issued under the Companys Equity Compensation Plans. $550,307
of such prepaid consulting fees was expensed during the six months ended May 31,
2010.

In addition, during the fiscal year ended November 30, 2009,
the Company entered into consulting agreements for investor relations and
shareholder communication services. Pursuant to these agreements, the Company
issued an aggregate of 11,709,302 shares of the Companys unrestricted free
trading common stock for total consideration of $91,241 which was recorded as
reporting and investor relations expenses. The Company also issued 8,000,000
shares of the Companys unrestricted free trading common stock to an attorney as
retainer. Such shares were valued at the fair market price at the date of the
engagement agreement, for total consideration of $148,000, of which $108,225 was
recorded as prepaid expenses and $39,775 was recorded as legal fees. Such
prepaid legal fees were expensed during the six months ended May 31, 2010.

c) Common Stock Issued as Commitment Fee under Equity Line
of Credit

On May 6, 2009, the Company entered into an Equity Line of
Credit Agreement with an accredited investor pursuant to which the Company could
have sold to the investor, if certain conditions were met, up to $100,000,000 in
shares of its common stock over the term of the agreement, unless earlier
terminated.

Upon execution, the Company issued to the investor 100,000,000
shares of the Companys common stock as payment of a commitment fee, with such
shares valued at the fair market price at the date of issuance ($0.0096 per
share on May 6, 2009). Such shares were deemed fully earned as of the date of
the agreement and therefore the fair market value of such shares ($960,000) was
included in consolidated statements of operations and other comprehensive loss
for the fiscal year ended November 30, 2009. As of November 30, 2009, the
Company raised $345,000 from the investor pursuant to the sale of an aggregate
of 34,500,000 common shares at a price of $0.01 per share and paid related
commission fees of $34,500 (See Note 11(a)  Private Placements, above).

On December 16, 2009, the Company terminated the Equity Line of
Credit Agreement in connection with its efforts to secure alternate sources for
capital.

d) Common Stock Issued as Financing Expenses

In April 2010, the Company issued 13,000,000 shares of the
Companys common stock to a convertible note holder as compensation costs. Such
shares were valued at $61,100 using the market closing price one day before the
convertible note issuance date and recorded as financing expenses (See Note 8(a)
 Convertible Note Issued in Fiscal Year 2010, above).

In November 2009, the Company issued 5,000,000 shares of the
Companys common stock to a convertible note holder as compensation and issuance
costs reimbursement. Such shares were valued at $80,000 using the market closing
price one day before the convertible note issuance date and recorded as
financing expenses (See Note 8(b) Convertible Note Issued in Fiscal Year 2009,
above).

25

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 12 Equity Compensation Plans, Stock Options and Common
Stock Purchase Warrants

a) Equity Compensation Plans and Stock Options

Equity Compensation Plans

On January 29, 2009, the Company adopted the 2009 Equity
Compensation Plan (the 2009 Plan) to encourage certain directors, officers,
employees, and consultants of the Company to acquire and hold stock in the
Company as an added incentive to remain with the Company, to increase their
efforts in promoting the interests of the Company and to enable the Company to
attract and retain capable individuals. The number of shares issued under the
Plan may not exceed 130,000,000 in aggregate. On January 29, 2009, the Company
filed a registration statement on Form S-8 to register all 130,000,000 of such
shares. These shares were granted to several consultants during the fiscal year
ended November 30, 2009.

On June 1, 2009, the Company adopted the 2009-II Equity
Compensation Plan (the 2009-II Plan) to encourage certain directors, officers,
employees, and consultants of the Company to acquire and hold stock in the
Company as an added incentive to remain with the Company, to increase their
efforts in promoting the interests of the Company and to enable the Company to
attract and retain capable individuals. The number of shares issued under the
2009-II Plan may not exceed 80,000,000 in aggregate. On June 1, 2009, the
Company filed a registration statement on Form S-8 to register all 80,000,000 of
such shares. These shares were granted to several consultants during the fiscal
year ended November 30, 2009.

On December 11, 2009, the Company adopted the 2009-III Equity
Compensation Plan (the 2009-III Plan) to encourage certain directors,
officers, employees, and consultants of the Company to acquire and hold stock in
the Company as an added incentive to remain with the Company and to increase
their efforts in promoting the interests of the Company and to enable the
Company to attract and retain capable individuals. The number of shares issued
under the 2009-III Plan may not exceed 120,000,000 in aggregate. On December 16,
2009, the Company filed a registration statement on Form S-8 to register all
120,000,000 of such shares. During the six months ended May 31, 2010, the
Company issued an aggregate of 91,327,983 shares of the Companys common stock
under the 2009-III Companys Equity Compensation Plans in payment of consulting
and other services. Such shares were valued at the fair market price on the
effective dates of the consulting agreements or based on share price terms in
the agreements.

During the fiscal year ended November 30, 2009, the Company
issued an aggregate of 213,319,102 shares of the Companys common stock under
the Companys Equity Compensation Plans in payment of consulting and other
services. Such shares were valued at the fair market price on the effective
dates of the consulting agreements or based on share price terms in the
agreements.

A summary of common stock issued under equity compensation
plans during the six months ended May 31, 2010 and the fiscal year ended
November 30, 2009 is disclosed in Note 11(b)  Common Stock Issued under Equity
Compensation Plans, above.

26

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 12  Equity Compensation Plans, Stock Options and
Common Stock Purchase Warrants (Continued)

a) Equity Compensation Plans and Stock Options
(Continued)

Stock Options

There were no stock options granted and valued during the six
months ended May 31, 2010 and the fiscal year ended November 30, 2009. A summary
of the change in outstanding and exercisable stock options for the six months
ended May 31, 2010 and the fiscal year ended November 30, 2009 is as
follows:

|                             |  |                 |   |   |                |  |  | Weighted         | 
|---------------------------- |  | --------------- | - | - | -------------- |  |  | ---------------- | 
|                             |  | Outstanding and |   |   | Weighted       |  |  | Average          | 
|                             |  | Exercisable     |   |   | Average        |  |  | Remaining        | 
|                             |  | Options         |   |   | Exercise Price |  |  | Contractual Life | 
|Balance, November 30, 2008   |  | 70,400,000      |   | $ | 0.056          |  |  | 3.47 years       | 
|Options cancelled or expired |  | (22,200,000     | ) |   | 0.055          |  |  |                  | 
|                             |  |                 |   |   |                |  |  |                  | 
|Balance, November 30, 2009   |  | 48,200,000      |   |   | 0.056          |  |  | 2.72 years       | 
|Options cancelled or expired |  | -               |   |   | -              |  |  |                  | 
|Balance, May 31, 2010        |  | 48,200,000      |   | $ | 0.056          |  |  | 2.22
      years | 

The balance of outstanding and exercisable common stock options
as at May 31, 2010 is as follows:

Number of Options
    
    
    
    
    RemainingOutstanding and
    
    Exercise
    
    
    Contractual LifeExercisable
    
    Price
    
    
    (Years)2,600,000
    $
    0.05
    
    
    0.611,500,000
    $
    0.05
    
    
    1.087,500,000
    $
    0.05
    
    
    1.1122,300,000
    $
    0.05
    
    
    2.6014,300,000
    $
    0.07
    
    
    2.6248,200,000


Fair Value Determination

There were no stock options granted during the six months ended
May 31, 2010 and the fiscal year ended November 30, 2009. The Company uses the
Black-Scholes option pricing model to calculate the fair value of stock options
when the options are granted. Expected volatility is based on historical
volatility. Because trading tends to be thin, in relation to the total shares
outstanding, average weekly stock prices were used to calculate volatility.
Management believes that the annualized weekly average of volatility is the best
measure of expected volatility. U.S. Treasury constant maturity rates were
utilized with maturities most closely approximating the expected term of the
option. The expected term of the options was calculated using the alternative
simplified method, which defines the expected life as the average of the
contractual term of the options and the weighted average vesting period for all
option tranches.

27

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 12  Equity Compensation Plans, Stock Options and
Common Stock Purchase Warrants (Continued)

b) Common Stock Purchase Warrants

During the six months ended May 31, 2010, 1,000,000 of the Companys
  outstanding common stock purchase warrants, exercisable at a per share exercise
  price of $0.02, was cancelled and 2,000,000 of the Companys outstanding
  common stock purchase warrants, exercisable at a per share exercise price of
  $0.02, expired . The Company issued 72,106,838 common stock purchase warrants
  upon the completion of private placements during the six months ended May 31,
  2010. 4,500,000 of such issued common stock purchase warrants are exercisable
  at a per share exercise price of $0.02 and 67,606,838 of such issued common
  stock purchase warrants are exercisable at a per share exercise price of $0.01,
  within the one year period commencing from the date of the subscription agreement.
  Each common stock purchase warrant issued during the period is exercisable for
  one share of common stock. There was no value assigned to these warrants when
  they were issued.

During the fiscal year ended November 30, 2009, 40,349,230 of
the Companys outstanding common stock purchase warrants expired and 84,900,000
common stock purchase warrants were granted by the Company upon the completion
of private placements as of November 30, 2009. Each common stock purchase
warrant granted during the period is exercisable for one share of common stock
at a per share exercise price of $0.02 within the one year period commencing
from the date of the subscription agreement. There was no value assigned to
these warrants when they were granted.

During the six month period ended May 31, 2010, the Company reduced
  the exercise price of 31,400,000 of its common stock purchase warrants from
  $0.02 to $0.003 per common share and 19,517,550 of its common stock purchase
  warrants from $0.01 to $0.003 per common share.

The common stock purchase warrants referenced above were issued
upon the completion of private placements. There was no value assigned to these
warrants when they were granted. The exercise price reduction incentivized the
holders to exercise the warrants, which assisted the Company in meeting its
working capital requirements. The Company received less proceeds from these
exercised warrants due to the price reductions, but the Company believes these
warrants would have been left to expire had the Company not effected the
exercise price reductions. A summary of the change in common stock purchase
warrants during the six months ended May 31, 2010 and the fiscal year ended
November 30, 2009 is as follows:

WeightedWeighted
    
    
    AverageOutstanding
    
    
    Average
    
    
    RemainingWarrants
    
    
    Excercise Price
    
    
    Contractual LifeBalance, November 30, 2008
    
    40,349,230
    
    $
    0.070
    
    
    0.17 yearsWarrants issued
    
    84,900,000
    
    
    0.020Warrants expired
    
    (40,349,230
    )
    
    0.070Balance, November 30, 2009
    
    84,900,000
    
    
    0.020
    
    
    0.72 yearsWarrants issued
    
    72,106,838
    
    
    0.011Warrants exercised
    
    (48,017,550
    )
    
    0.003Warrants cancelled or expired
    
    (3,000,000
    )
    
    0.020Warrants price reduced
    
    48,017,550
    
    
    0.003Warrants price reduced
    
    (48,017,550
    )
    
    0.016Balance, May 31, 2010
    
    105,989,288
    
    $
    0.012
    
    
    0.23
      years


28

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 12  Equity Compensation Plans, Stock Options and
Common Stock Purchase Warrants (Continued)

b) Common Stock Purchase Warrants (Continued)

The balance of outstanding and exercisable common stock
purchase warrants as of May 31, 2010 is as follows:

RemainingNumber of Warrants
    
    
    
    
    Contractual LifeOutstanding
    
    Exercise Price
    
    
    (Years)54,000,000
    $
    0.020
    
    
    0.01 - 0.6348,089,288
    $
    0.010
    
    
    0.60 - 0.993,900,000
    $
    0.003
    
    
    0.01105,989,288


Note 13  Segment Disclosures

The Company operates in one reportable segment, located in
United States, being the acquisition and exploration of mineral properties. The
Companys development of low-rank coal-water fuel, located in United States, is
in its initial stages and is not a reportable segment. Segmented information has
been compiled based on the geographic regions that the Company and its
subsidiaries registered and performed exploration and administration activities.
Assets by geographical segment as of the fiscal quarter ended May 31, 2010 and
the fiscal year ended November 30, 2009 is as follows:

|As of May 31, 2010                    |   | Canada    |  |   | United States |  |   | Total     | 
|------------------------------------- | - | --------- |  | - | ------------- |  | - | --------- | 
|Current assets                        | $ | 101,570   |  | $ | 22,840        |  | $ | 124,410   | 
|Mineral rights                        |   | -         |  |   | 1,478,601     |  |   | 1,478,601 | 
|Property, plant and equipment, net    |   | 372,392   |  |   | 532,814       |  |   | 905,206   | 
|Total assets, as of May 31, 2010      | $ | 473,962   |  | $ | 2,034,255     |  | $ | 2,508,217 | 
|                                      |   |           |  |   |               |  |   |           | 
|As of November 30, 2009               |   | Canada    |  |   | United States |  |   | Total     | 
|Current assets                        | $ | 720,088   |  | $ | 24,701        |  | $ | 744,789   | 
|Mineral rights                        |   | -         |  |   | 1,398,601     |  |   | 1,398,601 | 
|Property, plant and equipment, net    |   | 423,121   |  |   | 578,888       |  |   | 1,002,009 | 
|Total assets, as of November 30, 2009 | $ | 1,143,209 |  | $ | 2,002,190     |  | $ | 3,145,399 | 

Loss by geographical segment for the six months ended May 31,
2010 and 2009 is as follows:

|For the Six Months Ended May 31, 2010         |   | Canada    |  |   | United States |  |   | Total     | 
|--------------------------------------------- | - | --------- |  | - | ------------- |  | - | --------- | 
|Total comprehensive loss                      | $ | 1,781,292 |  | $ | 392,956       |  | $ | 2,174,248 | 
|                                              |   |           |  |   |               |  |   |           | 
|For the Six Months Ended May 31,
      2009   |   | Canada    |  |   | United States |  |   | Total     | 
|Total comprehensive loss                      | $ | 2,921,948 |  | $ | 1,382,292     |  | $ | 4,304,240 | 
|                                              |   |           |  |   |               |  |   |           | 
|For the Three Months Ended May 31, 2010       |   | Canada    |  |   | United States |  |   | Total     | 
|Total comprehensive loss                      | $ | 819,133   |  | $ | 217,938       |  | $ | 1,037,071 | 
|                                              |   |           |  |   |               |  |   |           | 
|For the Three Months Ended May 31,
      2009 |   | Canada    |  |   | United States |  |   | Total     | 
|Total comprehensive loss                      | $ | 1,761,065 |  | $ | 982,621       |  | $ | 2,743,686 | 

29

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 14  Supplemental Cash Flow Information

Investing and financing activities that do not have a direct
impact on current cash flows are excluded from the cash flow statements. A
summary of non-cash transactions and other cash information for the six months
ended May 31, 2010 and 2009 is as follow:

|                                                                              |   | Six Months Ended May 31, | 
|----------------------------------------------------------------------------- | - | ------------------------ | 
|                                                                              |   | 2010                     | 
|Changes in non-cash financing and investing
      activities:                 |   |                          | 
|Common stock issued for
      consulting fees and other expenses              | $ | 514,134                  | 
|Common stock issued for prepaid
      consulting and other service fees       | $ | 20,998                   | 
|Common shares issued
      for subscriptions received                         | $ | 100,000                  | 
|Conversion feature on convertible
      debenture                             | $ | 11,867                   | 
|Mineral claims royalty
      payable changes at period-end for mineral rights | $ | 80,000                   | 
|                                                                              |   |                          | 
|Other cash flow information:                                                  |   |                          | 
|Interest paid                                                                 | $ | 85,289                   | 

Note 15  Commitments and Contingencies

a) Severance Agreement with Director

The Company has entered into a severance agreement with a
director and chief executive officer of the Company. The agreement provides for
severance arrangements where a change of control of the Company occurs, as
defined, and the director is terminated. The compensation payable to the
director aggregates $4,000,000 plus the amount of annual bonuses and other
benefits that he would have received in the eighteen months following
termination.

b) Indemnity Agreements with Directors

The Company entered into Indemnity Agreements
  (Agreements) dated December 23, 2009, with each of its directors and
  executives, Garry L. Anselmo, Stuart McCulloch, Donald G. Balletto, Robert M.
  Dynes, and John Mackay (collectively, the Executives). These agreements
  supersede all prior agreements whether oral or written. Pursuant to the terms of
  the Agreements, the Company granted a general indemnification to the Executives
  against all claims and costs that arise out of the scope or performance of
  duties as a director or executive officer of the Company. The Agreements are
  conclusively deemed to commence on, and be effective as of, the day upon which
  the Executive first became or becomes a director or officer of the Company and
  survive and remain in full force and effect after the Executive ceases to be a
  director or officer of the Company and after the termination of the Executives
  employment with the Company.

30

---

|SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES        
|------------------------------------------------------
|(An Exploration Stage Company)                        
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|as of May 31, 2010 (Unaudited)                        
|(Stated in
      United States Dollars)               

Note 15  Commitments and Contingencies (Continued)

c) Office Lease

The Company entered into a seven year office lease agreement
expiring in July 2014 for its Vancouver office when obliged to vacate its
previous lease location at the expiry of the lease. The Companys future minimum
lease payments under this lease are as follows:

Fiscal year ending November 30, 2010
    $
    61,841Fiscal year ending November 30, 2011
    
    123,682Fiscal year ending November 30, 2012
    
    125,268Fiscal year ending November 30, 2013
    
    128,439Fiscal year ending November 30, 2014
      
      85,626$
      524,856


Note 16  Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were made available for issuance.  Below are the reportable events.

|(a) | On June 1, 2010, the Company issued 2,000,000 shares of
      common stock upon the exercise of share purchase warrants at reduced
      exercise prices of $0.003 per common share, and on June 4, 2010, the
      Company issued 5,500,000 shares of common stock upon the exercise of share
      purchase warrants at reduced exercise prices of $0.00233 per common share.
      The Company received proceeds of $18,815 from common stock purchase
      warrant exercises.                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(b) | On June 3, 2010, the Company adopted the 2010-I Equity
      Compensation Plan (the 2010-I Plan) to encourage certain directors,
      officers, employees, and consultants of the Company to acquire and hold
      stock in the Company as an added incentive to remain with the Company and
      to increase their efforts in promoting the interests of the Company and to
      enable the Company to attract and retain capable individuals. The number
      of shares issued under the 2010-I Plan may not exceed 180,000,000 in
      aggregate. On June 9, 2010, the Company filed a registration statement on
      Form S-8 to register all 180,000,000 of such shares.                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(c) | On June 14, 2010, the Company issued 7,788,162 shares of
      the Companys restricted common stock upon conversion of $17,500 under a
      convertible note at a conversion price of $0.002247 per common
    share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(d) | On June 15, 2010, the Company completed private
      placements resulting in the issuance of an aggregate of 30,946,667 units
      at $0.003 per unit. Each unit consisted of one share of common stock and
      one common stock purchase warrant exercisable for a number of additional
      shares of common stock equal to the number of units purchased, at a per
      share exercise price of $0.01 within the one year period commencing from
      the date of the subscription agreement. The Company received proceeds of
      $92,840 from such private placements.                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(e) | On June 15, 2010, the Company sold and issued a
      convertible note in the sum of $75,000 with a maturity date of June 15,
      2011. The note bears no interest and is to be paid in full on the maturity
      date, unless previously paid or converted into the Companys common stock.
      The Note holder has the right to convert any unpaid principal portion, at
      a conversion price per share equal to the lower of $0.003 or 70% of the
      average of the three lowest closing bid prices of the Companys common
      stock for the 20 trading days preceding a conversion date. The Company
      issued 20,000,000 shares of the Companys common stock to the Note holder
      as compensation costs.

31

---

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the operating results and
financial position of Silverado Gold Mines Ltd. (Silverado or the Company)
for the six months ended May 31, 2010. It should be read in conjunction with the
Companys audited consolidated financial statements and footnotes for the fiscal
year ended November 30, 2009 and the interim unaudited consolidated financial
statements for the six-month period ended May 31, 2010.

All financial information in this Managements Discussion and
Analysis (MD&A) is expressed and prepared in conformity with US generally
accepted accounting principles. All references are in US dollar, the Companys
reporting currency, unless otherwise noted. Some numbers in this MD&A have
been rounded to the nearest thousand for discussion purposes.

Certain forward-looking statements are discussed in this
MD&A with respect to the Companys activities and future financial results,
which are made based upon managements current expectations and beliefs. There
can be no assurance that future developments affecting the Company will be those
anticipated by management.

FORWARD-LOOKING STATEMENTS

The information in this Quarterly Report on Form 10-Q
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 Silverados 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", "seek", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or target", 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 Silverado files with the
Securities Exchange Commission (the SEC). These factors may cause actual
results to differ materially from any forward-looking statement. Management
disclaims 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

The Company is engaged in the acquisition and exploration of
mineral properties in the State of Alaska, through its wholly-owned subsidiary,
Silverado Gold Mines Inc., and is involved with the development of a new
environmentally friendly low-rank coal-water fuel (LRCWF) technology through
its other wholly-owned subsidiary, Silverado Green Fuel, Inc.

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

32

---

The Company has also been working on the development of LRCWF,
a non-toxic liquid fuel product derived from sub-bituminous and lignite coal. In
its finished form, the fuel would be a non-toxic, non-hazardous environmentally
friendly strategic (liquid) fuel. The Company is currently having a $150,000
study conducted on the chemical and physical characteristics of Mississippi Red
Hills Lignite Coal at the Mineral Industry Research Laboratory at the University
of Alaska (Fairbanks) and expects results by late 2010. Results of the tests as
well as capital availability and an increase in oil prices would all have to be
present and sufficient for Silverado Green Fuel Inc. to reconsider construction
of its LRCWF project.

SUMMARY OF MINERAL EXPLORATION PROGRAM AND PLAN OF
OPERATION

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

1) Nolan property;

2) Hammond Property (Slisco Bench);

3) Eagle Creek Property; and

4) Ester Dome Property.

All of these properties are in the exploration stage and have
no proven reserves as of May 31, 2010, with the exception of the Nolan property,
which has a probable reserve but requires a more extensive feasibility study to
ascertain if such probable reserve can be classified as a proven reserve.

The following disclosures incorporate the results of technical
  reports prepared during 2008 and 2009 by the QP, in accordance with the requirements
  of Canadian National Instrument 43-101 – Standards of Disclosure for Mineral
  Projects (“NI 43-101”). Investors may view the NI 43-101 reports
  at the Company’s website at www.silverado.com. **The NI 43-101 reports
  provide disclosure regarding Silverado’s Alaska properties in accordance
  with NI 43-101. U.S. Investors are cautioned that the United States Securities
  and Exchange Commission does not recognize the terms “indicated resources”
  and “inferred resources”.**

Based on the completion of a preliminary feasibility study by
an independent and AIPG Certified Professional Geologist (the QP), our Nolan
Gold and Antimony Lode Project has disclosed an economically viable mineral
reserve. The preliminary feasibility study, entitled Update of Mineral Resource
and Reserve Estimates and Preliminary Feasibility Study, Workmans Bench
Antimony-Gold Lode Deposit, Nolan Creek, Wiseman B-1 Quadrangle, Koyukuk Mining
District, Northern Alaska, dated January 1, 2009 and amended June 1, 2009 (the
Technical Report), concluded that the resource estimates disclosed by the
Company on November 17, 2008 could be reclassified as a probable reserve. The
Technical Report can also be found at the Companys website at
www.silverado.com.

Likewise, the 2009 lode exploration program (core drilling) at
Nolan did not change the probable mineral reserve estimates, but there was a
significant increase in the estimated indicated lode mineral resources at both
Workmans and Pringle Bench. The new resource estimates were
disclosed to the public on January 7, 2010. Refer to the Silverado 2009 10-K
report which can be found on SEDAR and EDGAR for the updated Nolan Gold and
Antimony Project resource estimates. The mineral resource estimates for the
Nolan Gold and Antimony project are also listed on the Company website atwww.silverado.com, under NEWS  Released
on January 7, 2010.

33

---

Overall mineral exploration performance during the six month
period ended May 31, 2010 and managements plan of operations for each property
are discussed below.

1. NOLAN GOLD AND ANTIMONY PROPERTY

The Company owns a 100 percent interest in numerous mining
claims on the Nolan Creek Project. As of May 31, 2010, the Companys Nolan Gold
Project consist of 204 unpatented, federal placer mining claims covering
approximately 4,080 acres in three non-contiguous groups, and 407 unpatented
federal lode mining claims covering approximately 8,140 acres in one large
contiguous group. Many of the 407 lode mining claims are superimposed over the
placer mining claims.

The majority of the properties comprising our Nolan Gold
Project are adjacent to or within the Nolan Creek Valley, located approximately
8 miles northwest of the small town of Wiseman, and 175 air miles north of
Fairbanks, Alaska in the southern foothills of the Brooks Range. Centrally
located in the historic Koyukuk Mining District, Nolan Creek is a southerly
flowing tributary to Wiseman Creek which flows southeasterly into the Middle
Fork of the Koyukuk River. An all weather road connects the Nolan Creek Camp
with the Dalton Highway and is suitable year-round for semi-tractors loaded with
fuel and equipment. Air transportation is available by several commercial
carriers from Fairbanks to the 4,500 ft long, state maintained Coldfoot Airport.
The community of Coldfoot Alaska is about 15 miles south-southeast of Nolan, and
has Alaskas northernmost gas station, grocery, and public lodging.

All of the Nolan Gold Project properties are on federal land
and located within the Wiseman B-1 Quadrangle. All of the mineral claims, with
the exception noted below, are in the SE 1⁄4, Township 31 North, Range 12 West,
the NE 1⁄4, Township 30 North, Range 12 West, and SW 1⁄4, Township 31 North, Range
11 West, Fairbanks Meridian.

In addition to the Nolan Creek properties, Silverado also has
two smaller placer claim groups on Clara Creek and Marion Creek, located 1.5 and
3 miles north respectively of the town of Coldfoot, Alaska, situated near the
Dalton Highway.

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

Placer deposits at Nolan Creek can be found in frozen gravel
beds (ancient channel deposits) some of which can be mined year round. Test
mining can be carried out by underground methods during the coldest winter
months, and by surface methods most of the year. In the summer months when the
gravel has thawed, snow melt water is available for gold recovery by hydraulic
sluicing. The sluicing process uses only gravity and water within a closed
circuit, ensuring that there is zero discharge to the environment. Lands
disturbed by mining are fully reclaimed. The Company operates under 11 combined
federal and state permits.

34

---

The Company currently is in a transitional phase between
exploration and development on this property. The preliminary hardrock
feasibility study, effective January 1, 2009 and amended on June 1, 2009 to
reflect additional data, supported a probable mineral reserve of antimony and
gold underlying the southwestern portion of the Solomon Shear Zone, an area
referred to by the Company as Workmans Bench. The study by the Companys QP
concluded that the Nolan Gold and Antimony Project in the Workmans Bench area
are economically viable. The results of the January 2009 preliminary feasibility
study and the reserve estimates are disclosed in the Companys Annual Report on
Form 10-KSB filed on March 16, 2009 and the Companys website:
www.silverado.com.

The measured reserve estimates on Workmans Bench, on which the
pre-feasibility study was based, did not change in the amended June 1, 2009
Technical Report. Also, the current probable reserves at Workmans Bench did not
change following the 2009 exploration program at the Nolan Creek property.
The current mineral resource estimates from the Workmans Bench and
Pringle Bench lode prospects were determined by the Company QP following the
2009 drill program, and the estimates were disclosed to the public on January 7,
2009. Resources were increased substantially after the 2009 drilling and January
7, 2010 report analysis. Investors need to be cautioned that the new resource
estimates are not reserves and have not demonstrated economic
viability.The current resource estimates for the Nolan Gold and
Antimony Project are listed below:

General Note Regarding Estimates

The following information should be considered in connection
with our estimates below, which we are disclosing in accordance with applicable
SEC standards and regulations:

- Assumed Prices of US $900/oz for gold and US $2.75/lb for antimony.
- Process Recovery Rates of 85% for antimony and 90% for gold (as provided
  by Hazen Research from work done on an underground bulk sample from the D
  tunnel of the Workmans Bench A vein and using gravity and water recovery
  systems only).
- Estimated Operating Costs of US $375/ton, based on operation of a 92 ton
  per day underground mine.

A cutoff grade of 4% antimony was used in our analysis. A 4%
cutoff grade should be regarded as 4% antimony equivalent. No cutoff grade was
used for gold, as antimony was the primary commodity being examined, and none of
the resource polygons contained less than 0.05 oz/ton gold.

Total Probable Lode Mineral Reserves, Nolan Creek Area
effective January, 1 2009

Cautionary Note to Investors concerning estimates of
Probable Reserve

Readers are cautioned that the following estimates are under
the category of a probable reserve and they are not a proven reserve, which
requires a higher degree of feasibility study. These values are based off of a
preliminary feasibility study, which is not the same as a legal feasibility
study.

Silverados Probable Lode Mineral Reserves, Nolan Creek Area

Reserve Category
    Cut-Off Grade (% Sb)
    Quantity (tons)
    Grade (% Sb)
    Metal (ton Sb)
    Grade (oz/ton Au)
    Metal (oz Au)Probable
    4.0
    42,412
    28.00
    11,880
    0.408
    17,300


35

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Notes:

- The effective date of these resources is January 1, 2009
- Rounding may result in some discrepancies.
- No processing recovery factors have been applied to these resource
  figures.
- The unit ton refers to short tons.
- Cut-off grade is 4.0% Sb equivalent, which the combined values of gold
  plus antimony expressed in terms of antimony alone.
- Effective date of the estimate is January 1. 2009. The 2009 drill program
  was not involved with the current reserve block and as such did not affect the
  grade or tonnage listed.

Total Indicated Lode Mineral Resources, Nolan Creek Area
effective January 7, 2010

Cautionary Note to U.S. Investors concerning estimates of
Indicated Resources

The following table uses the term indicated resources.
Silverado advises U.S. investors that while this term is recognized and required
by Canadian regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission
does not recognize this term. U.S. investors are cautioned not to assume that
any part or all of mineral deposits in these categories will ever be converted
into reserves.

The following table summarizes the indicated mineral
resources for the Workmans Bench gold and antimony deposit as a result of the
2009 investigation.The 2009 exploration program focused on the A Zone in
an area vertically above the current mineral reserve block and was not
previously drilled or investigated prior to 2009. The effective date of these
resources is January 7, 2010.

Silverados Indicated Lode Mineral Resources, Nolan Creek
Property

Resource Category
    Vein-Fault Ore Zone
    Cut-off (% Sb)
    Quantity (short tons)
    Grade (% Sb)
    Metal (ton Sb)
    Grade (oz/ton Au)
    Metal (oz Au)Indicated
    A Zone
    4.0
    11,394
    20.00
    2,278.4
    0.244
    2,777.0Indicated
    B Zone
    4.0
    645
    20.51
    132.3
    0.099
    64.1Indicated
    A and B Combined
    4.0
    12,039
    20.02
    2,410.7
    0.236
    2,841.1


|Notes:
|------
|-     
|-     
|-     
|-     
|-     

Mineral Resources that are not mineral reserves do not have
demonstrated economic viability.

Total Inferred Lode Mineral Resources, Nolan Creek Area
effective January 7, 2010

Cautionary Note to U.S. Investors concerning estimates of
Inferred Resources

36

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The following table uses the term inferred resources.
Silverado advises U.S. investors that while this term is recognized and required
by Canadian regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission
does not recognize this term. U.S. investors are cautioned not to assume that
any part or all of mineral deposits in these categories will ever be converted
into reserves.

The following table summarizes the inferred mineral
resources for the gold and antimony deposit, effective January 7,
2010.

Resource Category
    Deposit
    Cut-off (% Sb)
    Quantity (short tons)
    Grade (% Sb)
    Metal (ton Sb)
    Grade (oz/ton Au)
    Metal (oz Au)Inferred
    Pringle
    4.0
    12,817
    19.61
    2,513.8
    0.499
    6,390.4Inferred
    Workmans
    4.0
    21,389
    12.11
    2,590.6
    0.272
    5,816.6Inferred
    Pringle + Workmans
    4.0
    34,206
    14.92
    5,104.4
    0.357
12,207. 0


|Notes:
|------
|-     
|-     
|-     
|-     
|-     

Mineral Resources that are not mineral reserves do not have
demonstrated economic viability.

Plan of Operations:

The plan of operations for the Nolan Gold Project for the
remainder of the 2010 fiscal year is the advancement toward the development and
mining stage of our Nolan Gold and Antimony Project, especially along the
southwestern end of the Solomon Shear Zone in the Workmans Bench, Pringle and
Hillside Areas. The Company is in a transitional phase between exploration and
development. The recent preliminary feasibility study effective January 1, 2009,
supported a mineral reserve of antimony and gold underlying the southwestern
portion of the Solomon Shear Zone, an area referred to by the Company as
Workmans Bench. The 2008 feasibility study by Bundtzen concluded that the Nolan
Gold and Antimony Project in the Workmans Bench area is economically
viable.

Our plan of operations involves collecting a 1,000 cu yd bulk
sample of the stibnite-gold vein material from the mineralized zones referred to
as the A Zone and possibly B and West Zones. The bulk sample will be for
larger scale milling and processing tests, and a more accurate mineralogical
determination of the gold, especially what the Company has termed nugget
effect of the gold found in the massive stibnite veins. The Company believes
that the grade of gold will increase upon the extraction of the larger scale
bulk sample due to the nugget effect which is not represented during the
drilling effort. The successful extraction of a 1,000 cu yd sample will give a
better indication of the special and physical relationships between the gold and
the antimony. The bulk sample is also necessary for additional verification of
the purity of the antimony content in the stibnite and whether or not at depth
there is a potential for zonation of increased deleterious metals that could
contaminate the antimony ore.

Also, the plan of operations for 2010 involves performing a
variety of characterization studies in preparation for the development stage and
for permitting requirements necessary for the future production of the
antimony-gold deposit underlying the Workmans Bench. These studies include
but are not limited to additional hydrologic studies proximal to our planned
underground workings, environmental baseline studies of the flora and fauna and
the baseline chemical and physical parameters of the creek water, and acid-base
accounting (ABA) studies of the ore-hosting rock determining an appropriate,
effective and safe disposal of acid mine waste rock.

37

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Much of the work planned for 2010 is season-dependent. During
the summer months we plan to use our diamond core drill for infill drilling for
additional reserve estimates and structural interpretation. We plan to drill a
minimum of 30 shallow (200 to 500 ft) NQ diamond core drill holes, as well 30
deeper holes (> 500 ft) into the Solomon Shear Zone. Also, many of the
formerly mentioned characterization studies will be continued through the summer
months. Depending on available capital, we plan the procurement of necessary
facility and system upgrades, as well as the acquisition of necessary equipment
and the construction of a pilot mill facility. Currently we have a fully
functioning all-season enclosed 23 man camp with three functioning offices with
computers and internet access. The camp has a STW treatment plant for sewage and
graywater treatment. The camp site also has a large mechanics shop for working
on heavy equipment such as backhoes and bulldozers. The camp also has multiple
ADEC approved containments with tanks capable of storing 30,000 gallons of
diesel fuel, and a peripheral explosives storage area.

Considering the studies last fall and this spring of core
drilled in 2009 on Pringle Bench disclosing continual antimony and more
significantly the discovery in drill core of high grade drill core assays (+1 to
+6 oz gold) along with the continued encountering of wide sections of quartz
carbonate stock work veins surrounding the main vein with widths of up to 60
feet showing native gold and stibnite (antimony sulfide); the Company has
determined it could accomplish its metallurgical work on both the Pringle and SW
Workmans Bench areas by taking a split of the large HQ2 diamond drill core and
creating bulk samples from select zones as identified geologic core by logging
and the work performed on these bulk samples would suffice for metallurgical
information rather than samples taken directly from underground. This is
possible due largely to the continuity of the mineralized vein from one hole to
another and to the competency of the country rock around the main vein and
between veins in the area of the mineralized quartz carbonate stockwork.

Readers and investors need to take caution, in that much
of the work planned in 2010 is contingent upon available funding and the success
and speed of the permitting process.

The proposed drilling program for 2010 will be aimed at lode
gold and antimony exploration. Lode drilling will focus on Pringle Bench,
Workmans Bench and the Hillside Prospect along the Solomons Shear trend, and
is designed to provide a better three dimensional understanding of the
mineralized sections of the structure and how it is related to the placer gold
deposits of the Nolan Creek area. Since the Project is advancing into the
development stage, exploration drilling will not be conducted in the Fortress
area which is part of a gold bearing east-west trending deformation zone.

Based on the new 2010 drill data, Company and contract
geologists along with the Company QP have confirmed that the gold and antimony
mineralized zones correlate with the surface geochemistry and geophysical data
that extends northeast past Pringle Bench along the strike through an area
referred to as the Hillside Lode Prospect. The Company has stated previously
that the Hillside Area was thought to be the source of the placer gold mined
from the gravel benches located along the left limit of Nolan Creek between
Smith and Archibald Creeks. The Hillside Lode Prospect is located uphill of the
gold-rich gravel benches mined by Silverado as recent as 2006.

In addition to the drill program, the Company has been
aggressively seeking permits and also compiling various studies by numerous
contractors to meet application requirements for ongoing permits. In order for
the project to advance to the development stage at Nolan, the permitting process
involves various characterization studies. Some of these studies are seasonally
dependent and some require time periods that can delay the permitting process. The baseline water quality sampling which began in
June of 2008, was halted due to freezing temperatures during October of 2008,
and was continued in early June of 2009. The last baseline water sample for 2009
was collected in late September, and the sampling is continuing

38

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On May 14, 2010 the United States Army Corps of Engineers
issued a five year permit from that date. The permit allows the Company to
conduct Hard Rock Exploration to include diamond core drilling at the Nolan
Creek Mine.

The access road into the Nolan Creek camp as well as the 26 man
camp facility received construction upgrades in 2009 in preparation for the
1,000 cubic yard bulk ore sample that the Company has been permitted to sample.
Essential to the bulk sample program and future development is the environmental
baseline and characterization studies that include Acid Rock Drainage studies
also known as acid-base accounting, as well as the water quality baseline
sampling. Samples of the ore and wall rock gangue from various core intercepts
and also wall rock from the A zone were submitted by the QP to analytical labs
for determination of acid generating potential. The Companys QP has directed a
third party engineering firm to conduct various geotechnical studies of the wall
rock and ore rock.

The Company, as per the QP, is still seeking a calcareous rock
unit that is accessible for extraction on the Nolan property. Permits for the
extraction of the calcareous rock will not be applied for until the Company has
verified that such a rock unit is accessible. The extraction of a calcareous
rock could be used as a buffering liner for temporary storage of waste rock that
may have acid generating potential.

During the next three months, Silverado will continue to
implement the recommendations of the preliminary feasibility study that was
completed by the Company QP, Thomas K. Bundtzen. The QP will determine
additional resource estimates and these estimates will be disclosed to the
public as soon as they are completed by the QP. The QP will also oversee
geotechnical studies as well as the acid rock characterization study. The
Company will continue upgrades to the infrastructure at Nolan. The company plans
to construct additional access trails for drilling into the Hillside Zone and
will perform additional surveying for planning and design purposes. The Company
will continue with aggressive permitting and will seek additional capital needed
for the procurement of a pilot mill and equipment that will be used during the
extraction and processing of the permitted 1,000 cubic yard bulk sample of gold
and antimony ore.

During the next three months, Silverado plans to initiate lode
development in the Workmans Bench area as follows:

| | 1. | Continued aggressive permitting.                                                                                                                                                                                                                                                                        
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Begin the 2010 diamond core drill program which will
      utilize a minimum of two mobile drill rigs. Depending on access to the
      more remote drill sites, the Company plans on drilling a minimum of 30,000
      feet of NQ2 or larger diameter core from the Solomon Shear Zone at
      Nolan.
| | 3. | Baseline characterization studies for permitting
      purposes.                                                                                                                                                                                                                                        
| | 4. | Acid and Base Accounting (ABA) for potential acid
      drainage issues.                                                                                                                                                                                                                                
| | 5. | Procurement of equipment and infrastructure upgrades
      needed for the underground extraction of a 1,000 cubic yard bulk
      sample.                                                                                                                                                               
| | 6. | Development of additional road infrastructure along the
      northern extension of the Solomon Shear Zone (Hillside Prospect) that has
      not been drilled by a diamond core drill to date.                                                                                                         
| | 7. | Possible underground extraction of a bulk sample of
      antimony and gold ore for additional processing studies and
  assays.                                                                                                                                                                         

39

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We will be seeking to raise up to approximately $50,000,000 to
continue our exploration and permitting, while continuing and beginning mining
development activities on the Nolan Gold Project. The actual amount that we
spend on these projects will depend on the actual amount of funds that we are
able to raise. We are presently seeking to obtain sufficient financing to enable
us to proceed with these plans.

2. HAMMOND PROPERTY

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

The Hammond property is accessible by the Trans-Alaska Pipeline
road about 280 road miles north of Fairbanks, Alaska. An all-weather 4x4 road
connects Hammond to the pipeline road.

The Company leases 24 federal placer mining claims and 36
federal lode mining claims from Alaska Mining Company, Inc. (Alminco). Alminco
has confirmed that our mineral claims and options are in good standing on the
understanding we will use our best efforts to pay the minimum royalty payments,
including the payments that are in arrears for the past four years, when
business conditions permit.

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

3. EAGLE CREEK PROPERTY

The Eagle Creek property is comprised of 77 Alaska state
mineral claims. All claims are contiguous and are located in the Fairbanks North
Star Borough. The total area of the claims equals approximately 3080 acres and
all claims are valid. There has been no legal survey on the claims. Ownership of
the claims is in the name of Silverado Gold Mines Inc. There is an "option to
purchase" agreement with Arley Taylor (i.e., now with his descendants), to
purchase a 100% interest in the property for $400,000, of which $43,000 remains
to be paid. The amount of $5,000 per year is required to be paid to keep the
agreement in good standing and applies to the buyout price. The original option
agreement with Arley Taylor was acquired through an agreement with S. Tan who
assigned the agreement to us in consideration of 15% royalty from production
(15% of net operating profits after payback of costs). We have continued to make
option payments on the Eagle Creek property based on the agreement, and as a
result, all of our mineral claims and options are in good standing.

The Eagle Creek property is accessed by the Steese Highway, 10
miles north of Fairbanks, Alaska to Fox, Alaska, then traveling along the Elliot
highway 6 miles north to Murphy Dome Road, then west along Murphy Dome Road
about 5 miles to the property. The Number One Vein on this property was the lode
quartz gold structure that was historically mined commercially for antimony.

Historically, Eagle Creek was Alaskas second largest antimony
producer. In the late 1980s, Silverado built a 100 ton per day (TPD) gravity
plant and processed the old mine dumps, successfully selling all antimony
produced. In addition to the high-grade gold bearing quartz veins found on
Silverados large Eagle Creek property, the Company, in 2006, identified what
appeared to be a gold mineralized pluton which is a granitic or igneous rock located on the claims above the placer gold
Treasure Creek portion of the property. This may lead to the development of a
gold deposit, and may make ideal feedstock for the Kinross Fort Knox mill
nearby.

40

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Annual assessment work will be carried out on the property to
keep the mining claims in good standing. Assessment work will be focused on the
northwest part of the claim block, where drilling and trenching has defined an
intrusive host rock, thought to be a sill, containing low grade gold, silver and
antimony mineralization. If funding permits, the Company will design a drilling
program to further investigate the gold and by-product mineral distribution of
the intrusive and the Number One Vein system.

No funding has been advocated for the 2010 work plan. Whereas
historic commercially viable mining took place on the Number One (or
"Scrafford") Vein, and whereas Silverado has successfully drilled and hit
significant widths of high-grade or massive stibnite (antimony sulfide) and
significant widths with good gold grades, it has nonetheless yet to complete a
definitive drilling program sufficient to indicate reserves, and therefore there
is no assurance that a commercially viable economic mineral deposit exists on
the property.

4. ESTER DOME PROPERTY

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

Access to the property is provided by the paved Ester Dome road
and a well-maintained gravel road. The main line of the Alaska Railroad passes
by the west perimeter of the property and a high capacity electrical line
carrying power to the Fort Knox mill passes 300 feet below the Grant Mill on the
property.

Reclamation work to complete the closure of the Grant Mill
Tailings Pond is in the permitting stages. The earthwork construction required
to close the tailings pond requires permits issued by the Alaska Department of
Environmental Conservation. The Company has commissioned a third party
environmental and engineering firm to assist with the permitting process. A cost
analysis of the tailings pond closure is under review by the Company and by a
third party environmental and geotechnical engineering firm. The pond is filled
to capacity, and will be capped and decommissioned after final approval of the
tailings pond closure plan is received from State of Alaska regulatory agencies.
There will be limited field work on the property during the summer of 2010,
which will consist of small scale surveys and minor geochemical studies.

Due to the current price of gold, the Company is considering
whether to increase exploration efforts on the property. Currently, however, the
Company is primarily focused on the continued exploration and future development
of the Nolan Gold and Antimony Project in northern Alaska.

LIQUIDITY AND CAPITAL RESOURCES

Our current ratio (current assets divided by current
liabilities) as of May 31, 2010 was 0.05 as compared to 0.37 as of November 30,
2009. This ratio is commonly used as a measure of a companys liquidity. We look
at actual dollars in analyzing our liquidity. Since the Companys cash inflow
has been generated mainly from sales of shares of the Companys common stock,
gold sale proceeds earned during the exploration stage, debentures and loans, it
will be very difficult for the Company to meet the current and anticipated
obligations without raising additional capital. If we are not able to raise
adequate capital and to do so in a timely manner, we will not be able to fully
implement our business plan or sustain ongoing operations.

41

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As of May 31, 2010, the Company had a working capital deficit
of $2,289,000 as compared to a working capital deficit of $1,272,000 as of
November 30, 2009. The Company had $34,298 cash on hand as of May 31, 2010 as
compared to no cash and cash equivalents on hand as of November 30, 2009. The
Companys total assets for such periods were $2,508,000 (November 30, 2009:
$3,145,000) and the total current assets were $124,000 (November 30, 2009:
$745,000).

As of May 31, 2010, the Companys current assets consist of
$34,298 (November 30, 2009: $Nil) in cash, $6,316 (November 30, 2009: $6,316) in
gold inventory and $83,796 (November 30, 2009: $738,473) in prepaid and other
receivables. Included in prepaid and other receivables were non-cash prepaid
consulting and other fees of $58,333 (November 30, 2009: $716,865) paid through
issuances of the Companys common stock under the Companys equity compensation
plans.

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

The Companys mineral rights were valued at $1,479,000 as of
May 31, 2010 as compared to $1,399,000 as of November 30, 2009, an increase of
$80,000 or 6%. The increase in the value of our mineral rights this past six
months is directly attributable to $80,000 in an accrued royalty payment. The
net book value of our fixed assets was $905,000 as of May 31, 2010 as compared
to $1,002,000 as of November 30, 2009, a decrease of approximately $97,000 or
10%. The decrease in the net book value of our fixed assets was due to
depreciation.

The current liabilities as of May 31, 2010 totaled $2,414,000
as compared to $2,017,000 as of November 30, 2009, an increase of approximately
$397,000 or 20%. Included in current liabilities are $1,002,000 (November 30,
2009: $1,064,000) due to related parties, which has been classified as financing
activities in the Companys cash flow statements, and $1,183,000 (November 30,
2009: $883,000) of accounts payable and accrued liabilities.

The Company has not yet generated revenues since recommencement
of the exploration stage on December 1, 2001 and our cash was primarily
generated from the sale of our securities. During the six months ended May 31,
2010, the Company raised $337,427 of net proceeds through completed private
placements and received $80,950 through uncompleted private placement
subscriptions and warrants exercise. During the fiscal year ended November 30,
2009, the Company raised $2,047,000 of net proceeds through completed private
placements and received $100,000 through uncompleted private placement
subscriptions. In addition, the Company received $237,000 as a result of mining
equipment disposals and $52,000 as a result of gold inventory sales during the
fiscal year ended November 30, 2009.

During the six months ended May 31, 2010, the Company spent
$286,000 (2009: $305,000) on the mineral exploration program. In addition, the
Company has spent $1,733,000 (2009: $3,105,000) on other operating activities.
The Company has been reviewing its budgets for its current business needs and
its further exploration and early stage production at its Nolan Creek property
in Alaska. Our plan of mining operations in Alaska anticipates that we will need
to raise and expend approximately $10,560,000 during fiscal year 2010. We will
also need to raise and spend approximately $3,000,000 on general and
administrative costs during fiscal year 2010.

The Company expects to continue to be funded primarily from
equity financings and will continue the current process of seeking to arrange
financing of those operational budgets, exploration and near term production to
meet the requirements of the work program. The ability of the Company to
complete the exploration and development of its mineral properties is dependent
on the Companys ability to obtain the necessary financing.

42

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There is no assurance that we will be able to raise the
financing necessary to enable us to implement our business plan.

SEGMENT INFORMATION

The Company operates in one reportable segment, located in
United States, being the acquisition and exploration of mineral properties. The
Companys development of low-rank coal-water fuel, located in United States, is
in its initial stages and is not a reportable segment. Segmented information has
been compiled based on the geographic regions that the Company and its
subsidiaries registered and performed exploration and administration activities.
A summary of financial information by geographical areas is disclosed in
footnote 13 of the Companys interim consolidated financial statements for the
fiscal quarter ended May 31, 2010 (Item 1, above).

RESULTS OF OPERATIONS  Six months ended May 31, 2010 and
2009

The Company has not generated revenues since recommencement of
the exploration stage from December 1, 2001 to May 31, 2010. For the six months
ended May 31, 2010, we reported a net loss of $2,174,000, or $0.001 per share,
compared to a net loss of $4,304,000, or $0.004 per share for the same period
ended May 31, 2009, a decrease of approximately 49%.

The major decreases in six months ended May 31, 2010, as
compared to the same period in 2009, were the Companys exploration expenses by
$19,000, its related party charges in excess of cost by $251,000, management
service fees by $362,000, consulting fees by $788,000, and transfer agent and
filing fees by $29,000. These decreases were mainly due to cash limitations and
the development of a restructuring plan that the Company is working on to fund
its exploration and development activities.

The major increases included in the net loss for six months
ended May 31, 2010, as compared to the same period in 2009, were increases of
$79,000 for legal and other professional fees and $104,000 for interest
expenses. Such increases were mainly due to cash constraints and the increased
legal and other profession requirements related to the Companys efforts
relating to restructuring, equity financing, development and expansion.

RESULTS OF OPERATIONS  Three months ended May 31, 2010
and 2009

The Company has not generated revenues since recommencement of
the exploration stage from December 1, 2001 to May 31, 2010. For the three
months ended May 31, 2010, we reported a net loss of $1,037,000, or $0.001 per
share, compared to a net loss of $2,744,000, or $0.003 per share for the same
period ended May 31, 2009, a decrease of approximately 62%.

The major decreases in three months ended May 31, 2010, as
compared to the same period in 2009, were the Companys related party charges in
excess of cost by $111,000, management service fees by $177,000, consulting fees
by $613,000, and reporting and investor relations by $33,000. These decreases
were mainly due to cash limitations and the development of a restructuring plan
that the Company is working on to fund its exploration and development
activities.

The major increases included in the net loss for three months
  ended May 31, 2010, as compared to the same period in 2009, were increases of
  $13,000 for exploration expenses, $74,000 for office expenses and $88,000 for
  interest expenses. Such increases were mainly due to the increased requirements
  related to the Companys efforts relating to restructuring, equity financing,
  development and expansion.

43

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RELATED PARTY TRANSACTIONS

The details of related party transactions are disclosed in
footnote 10 of the Companys interim unaudited consolidated financial statements
for the fiscal quarter ended May 31, 2010 (Item 1, above).

CRITICAL ACCOUNTING POLICIES

The details of our critical accounting policies are disclosed
in footnote 2 of the Companys interim unaudited consolidated financial
statements for the fiscal quarter ended May 31, 2010 (Item 1, above).

OFF-BALANCE SHEET ARRANGEMENTS

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

INFLATION

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

44

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of
1934 (the Exchange Act), we carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures and our
internal control over financial reporting as of May 31, 2010. This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer Garry L. Anselmo and our Chief Financial Officer Donald
Balletto. Based upon that evaluation, it was concluded that our disclosure
controls and procedures and our internal control over financial reporting are
effective to ensure, among other things, that the information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
accumulated, recorded, processed, communicated, and reported within the time
periods specified by the rules and forms of the Securities and Exchange
Commission.

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, our principal executive
and principal financial officers, or persons performing similar functions, and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:

| | a) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect our transactions and dispositions of
      assets;                                                                                                                                                                                   
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                          
| | b) | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures are being made only in accordance with
      authorizations of our management and directors; and
| |    |                                                                                                                                                                                                                                                                                                                                          
| | c) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of our
      assets that could have a material effect on our financial
    statements.                                                                                                                       

During the six months ended May 31, 2010, there were no changes
that had a material effect on, or are reasonably likely to affect, our internal
control over financial reporting.

It should be noted that an internal control system, however
well designed and operated, can provide only reasonable, and not absolute,
assurance that the objectives of the controls system are met. 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 a company have been detected. In addition, this evaluation was made
in light of the fact the Company has no operation revenues and limited cash on
hand.

45

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to, and its property is not the
subject of, any material pending legal proceeding, in either case other than
ordinary routine litigation incidental to the business. The Company also is not
aware of any proceeding that a governmental authority is contemplating.

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

The Company has not sold any unregistered securities during the
period covered by this report other than those previously reported on a Current
Report on Form 8-K filed with the Securities and Exchange Commission.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is not currently in material default of
indebtedness that exceeds 5% of the total assets of the Company and its
consolidated subsidiaries.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

46

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ITEM 6. EXHIBITS

|Number | Description of Exhibit                                                                                                                                                                  
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1    | Articles of Incorporation of the
      Company (1)                                                                                                                                      
|3.2    | Amendment to Articles of Incorporation of the Company
      (2)                                                                                                                         
|3.3    | Altered Memorandum of the Company
      (3)                                                                                                                                             
|3.4    | Amendment to Articles of Incorporation of the Company
      (7)                                                                                                                         
|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   | Amendment to Change of Control Agreement between
      the Company and Garry L. Anselmo (6)                                                                                             
|10.6   | Operating Agreement between the
      Company and Tri-Con Mining Ltd. Dated January 1, 1997 (5)                                                                                         
|10.7   | Operating Agreement between the Company and Tri-Con
      Mining Inc. dated January 1, 1997 (6)                                                                                         
|10.8   | Operating Agreement between the
      Company and Tri-Con Mining Alaska Inc. dated January 1, 1997 (6)                                                                                  
|10.9   | Form of Warrant Exercise Agreement between the
      Company and certain of the selling security holders (8)                                                                            
|10.10  | Form of Delay Agreement between
      the Company and certain of the Selling Shareholders (8)                                                                                           
|10.11  | 2006 Stock Option Plan (10)                                                                                                                                                             
|10.12  | 2006-II Stock Option Plan (11)                                                                                                                                                          
|10.13  | 2007 Stock Option Plan (12)                                                                                                                                                             
|10.14  | Shared Well Agreement between the
      Company and Sukakpak, Inc., dated May 17, 2007 (14)                                                                                             
|10.15  | 2007-1 Equity Compensation Plan (13)                                                                                                                                                    
|10.16  | Lease Agreement between the Company
      and TA Properties (Canada) Ltd., dated March 30, 2007 (15)                                                                                    
|10.17  | Indemnity Agreements between the Company and Garry
      L. Anselmo, Stuart C. McCulloch, and James F. Dixon, each dated October
      27, 2008 (16)                                    
|10.18  | Indemnity Agreements between the
      Company and Garry L. Anselmo, Stuart C. McCulloch, Donald G. Balletto, Robert
      M. Dynes and John Mackay, each dated December 23, 2009 (17)  
|10.19  | 2009 Equity Compensation Plan (18)                                                                                                                                                      
|10.20  | 2009-II Equity Compensation Plan
      (19)                                                                                                                                             
|10.21  | Equity Line of Credit Agreement between the Company and Ashborne Finance Ltd. (20)                                                                                                      
|10.22  | Consulting Agreement between the
      Company and 1315781 Ontario Inc. (21)                                                                                                            
|10.23  | Note Purchase Agreement between the Company and
      St. George Investments, LLC. (22)                                                                                                 
|10.24  | 2009-III Equity Compensation Plan
      (23)                                                                                                                                            
|10.25  | 2010-I Equity Compensation Plan (24)                                                                                                                                                    
|14.1   | Code of Ethics (9)                                                                                                                                                                      
|31.1 * | Certification of Principal
      Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002                                                                     
|31.2 * | Certification of Principal
      Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002                                                                     
|32.1 * | Certification of Principal
      Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002                       
|32.2 * | Certification of Principal
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002                       

|(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 fiscal year ended November 30, 1995.       
|(5) | Filed as an exhibit to the Companys Annual Report on
      Form 10-K for the fiscal year ended November 30, 1996.       
|(6) | Filed as an exhibit to the Companys Annual Report on
      Form 10-KSB for the fiscal year ended November 30, 2002.     
|(7) | Filed as an exhibit to the Companys Current Report on
      Form 8-K filed on June 13, 2003.                            

47

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|(8)  | Filed as an exhibit to the Companys Registration
        Statement on Form SB-2 filed on May 19, 2004.               
|---- | ----------------------------------------------------------------------------------------------------------------------
|(9)  | Filed as an exhibit to the Companys Quarterly
        Report on Form 10-QSB filed on July 15, 2004.                  
|(10) | Filed as an exhibit to the Companys Registration
        Statement on Form S-8 filed on April 11, 2006.              
|(11) | Filed as an exhibit to the Companys Registration
        Statement on Form S-8 filed on March 31, 2006.              
|(12) | Filed as an exhibit to the Companys Registration
        Statement on Form S-8 filed on February 20, 2007.           
|(13) | Filed as an exhibit to the Companys Registration
        Statement on Form S-8 filed on September 7, 2007.           
|(14) | Filed as an exhibit to the Companys Annual Report
        on Form 10-KSB for the fiscal year ended November 30, 2007.
|(15) | Filed as an exhibit to the Companys Quarterly
        Report on Form 10-QSB filed on July 15, 2008.                  
|(16) | Filed as exhibits to the Companys Current Report
        on Form 8-K filed on October 29, 2008.                      
|(17) | Filed as exhibits to the Companys Current Report
        on Form 8-K filed on December 23, 2009.                     
|(18) | Filed as an exhibit to the Companys Registration
        Statement on Form S-8 filed on January 29, 2009.            
|(19) | Filed as an exhibit to the Companys Registration
        Statement on Form S-8 filed on June 1, 2009.                
|(20) | Filed as an exhibit to the Company’s Current Report on Form 8-K filed on May 12, 2009.                                
|(21) | Filed as an exhibit to the Companys Quarterly
        Report on Form 10-Q filed on October 15, 2009.                 
|(22) | Filed as an exhibit to the Companys Current Report
        on Form 8-K filed on January 28, 2010.                    
|(23) | Filed as an exhibit to the Companys Registration Statement on Form
      S-8 filed on December 16, 2009.             
|(24) | Filed as an exhibit to the Company’s Registration
        Statement on Form S-8 filed on June 9, 2010.                

* Filed herewith.

48

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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 15, 2010 | /s/ Garry L. Anselmo                         
|                    | Garry L. Anselmo                             
|                    | President, Chief Executive Officer (Principal
|                    | Executive Officer)                           
|                    |                                              
|                    |                                              
|DATE: July 15, 2010 | /s/ Donald Balletto                          
|                    | Donald Balletto                              
|                    | Chief Financial Officer                      
|                    | (Principal Financial Officer)                

49

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