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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

**[ x ]** Annual Report Pursuant To Section 13 Or
  15(D) Of The Securities Exchange Act Of 1934

For the fiscal year ended NOVEMBER 30, 2005

**[]**
  Transition Report Under Section 13 Or 15(D) Of The Securities Exchange Act Of
  1934

For the transition period from _____ to _____

COMMISSION FILE NUMBER: 0-12132

SILVERADO GOLD MINES
LTD.(Name of small business issuer in its charter)

|British Columbia, Canada                                             | 98-0045034                     
|-------------------------------------------------------------------- | -------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification
|                                                                     | No.)                           
|                                                                     |                                
|                                                                     |                                
|Suite 505, 1111 West Georgia Street                                  |                                
|Vancouver, British Columbia, Canada                                  | V6E 4M3                        
|(Address of principal executive offices)                             | (Zip Code)                     
|                                                                     |                                
|                                                                     |                                
|(604) 689-1535                                                       |                                
|Issuer's telephone number                                            |                                

Securities registered under Section 12(b) of the Exchange Act:
NONE.

Securities registered under Section 12(g) of the Exchange
Act:

COMMON SHARES, NO PAR VALUE

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

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B is not contained in this form, and no disclosure
  will be contained, to the best of registrant's knowledge, in definitive proxy
  or information statements incorporated by reference in Part III of this Form
  10-KSB or any amendment to this Form 10-KSB. **[ 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 ]

State issuer's revenues for its most recent fiscal year
$NIL

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2of the Exchange Act.) $68,971,134 as of
February 22, 2006.

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date. 438,672,479
common shares, no par value outstanding as of February 22, 2006.

Transitional Small Business Disclosure Format (check one): Yes
  []
  No [ x ]

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ITEM 1.     DESCRIPTION OF BUSINESS.

FORWARD-LOOKING STATEMENTS

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

INTRODUCTION

We are engaged in the acquisition and exploration of mineral
properties in the State of Alaska. Our primary focus is the exploration of our
Nolan Gold Project, located 175 miles north of Fairbanks, Alaska. Our plan of
operations is to carry out exploration activities at the Nolan Gold Project. Our
exploration activities include test mining activities that we carry out as part
of our exploration programs.

We are also seeking financing to enable us to proceed with the
construction of a commercial test facility to establish the viability of the
production of low-rank coal-water fuel as a replacement for oil fired boilers
and utility generators. There is no assurance that we will be able to obtain any
financing for this project.

CORPORATE ORGANIZATION

Silverado Gold Mines Ltd. was incorporated under the laws of
British Columbia, Canada in June 1963. We operate in the United States through
our wholly owned subsidiary, Silverado Green Fuel Inc. (formerly Silverado Gold
Mines Inc.) (Silverado Green Fuel), an Alaskan company incorporated in 1981.
We filed a transition application and notice of articles with the British
Columbia Registrar of Companies on April 20, 2004 in order to replace our former
memorandum adopted under the British Columbia Company Act and to alter our
current articles to the extent necessary to ensure compliance with the British
Columbia Business Corporations Act (the BC Business Corporations Act). The BC
Business Corporations Act came into force in British Columbia on March 29, 2004
and replaced the former British Columbia Company Act. The transition notice and
notice of articles was filed under the BC Business Corporations Act that
requires any British Columbia company incorporated under the former British
Columbia Company Act to, within two years following the coming into force of the
BC Business Corporations Act, transition under the BC Business Corporations Act
by filing with the British Columbia Registrar of Companies a transition
application and notice of articles.

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

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MINERAL EXPLORATION BUSINESS

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

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

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

Our plan of operations for each of our groups of mineral
properties is discussed below:

1. The Nolan Gold Project

Our primary area of exploration interest is the Nolan Gold
Project. The properties comprising the Nolan Gold Project, our exploration
activities at the Nolan Gold Project and our plan of operations for the Nolan
Gold Project are discussed in detail under the heading Description of Properties
in this annual report.

Our activities at the Nolan Gold Project are exploration stage
activities. There is no assurance that a commercially viable mineral deposit
exists on the Nolan Gold Project. Further exploration will be required before a
final evaluation as to the economic and legal feasibility of mining of the Nolan
Gold Project is determined. There is no assurance that further exploration will
result in a final evaluation that a commercially viable mineral deposit exists
on the Nolan Gold Project.

2. Ester Dome Property

The properties comprising our Ester Dome gold project are
discussed in detail under the heading Description of Properties in this annual
report. We are presently not undertaking any exploration activities on the Ester
Dome Gold Project. However, we have commissioned a technical report that will
include the Ester Dome Gold Project in order to update and consolidate our
technical information on the Ester Dome Gold Project. That report was completed
in December of 2005.

We plan to convert the Grant mine mill located on the Ester
Dome properties into a research and development facility for the low-rank
coal-water fuel business, as discussed below. We also plan to continue
reclamation work on our Ester Dome holdings during 2006. We plan to use our
heavy equipment presently located at the Nolan Gold Project to do this work
during August 2006.

3. Hammond Property

The properties comprising our Hammond property are discussed in
detail under the heading Description of Properties in this annual report. We are
presently not undertaking any exploration activities on the Hammond property.
This property is also referred to as the Slisco Bench property.

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4. Eagle Creek Property

The properties comprising our Eagle Creek property are
discussed in detail under the heading Description of Properties in this annual
report. We are presently not undertaking any exploration activities on the Eagle
Creek property.

LOW-RANK COAL-WATER FUEL BUSINESS

We commenced development of a low-rank coal-water fuel business
in 2000. Our determination to enter into this business was based on a decision
to broaden our business beyond mineral exploration and production. This aspect
of our business is still in the start-up phase of operations and no revenues
have been achieved to date. We do not anticipate that revenues from this
technology will be achieved until commercialization of the technology has been
established.

We entered the fuel sector in 2000 by forming a new Fuel
Technology division which operates out of Fairbanks, Alaska. This division of
the business is operated by our wholly owned subsidiary, Silverado Green Fuel
Inc. (formerly Silverado Gold Mines Inc.), under the supervision of Dr. Warrack
Willson, Vice-President of Fuel Technology. The fuel product is called low-rank
coal-water fuel (LRCWF), which is a low-cost, non-toxic, non-hazardous
alternative to oil fuels used in commercial boilers for the production of
electricity and industrial heat. As a liquid fuel enjoys all the benefits of
liquid handling and storage, LRCWF allows coal to be used sight unseen and is
made from Americas most abundant fossil energy resource. This fuel is produced
from ground low-rank coal that has been hydrothermally treated. Hydrothermal
treatment (HT) is an advanced technology, featuring moderate
temperature/pressure, non-evaporative drying, which irreversibly removes much of
the inherent moisture from low-rank coal and allows the formulation of
commercially viable LRCWFs. HT is similar in many respects to pressure cooking,
and it retains all of the desirable combustion characteristics of low-rank coal.
When LRCWF is injected into a boiler, the particles ignite and burn rapidly,
which leads to little or no boiler derating when substituted for oil. We believe
that demand for the LRCWF and its production and utilization technology exists
because of the high cost of oil and the desire for economical alternatives to
oil that are environmentally friendly.

Our objective is to establish the commercial viability of the
low-rank coal-water fuel technology by adapting our Grant Mill located on the
Ester Dome property into a commercial-scale demonstration facility for producing
and testing LRCWF. The estimated cost of a three-year demonstration project is
$20,000,000. In 2002, we applied to the United States Department of Energy (DOE)
under the first solicitation of their Clean Coal Power Initiative on July 30,
2002 for a 50:50 cost share funding with objective of achieving the financing
necessary to proceed with the demonstration project. Our application was not
selected. Based on news from the Department of Energy (DOE), we determined in
2004 not to submit a proposal to the DOEs second solicitation under the Clean
Coal Initiative in September 2004, as the DOE imposed a narrower focus for the
second round of solicitations, namely technology advancements for
gasification-based electricity production, advanced mercury control, and
sequestration and sequestration-readiness. We are continuing work to gain
alternate funding through the US Government and through private sources for this
project. There is no assurance that we will obtaining any funding.

From time to time as conditions or funds warrant, we may
re-evaluate our development programs in response to changing economic or
environmental conditions. Such a re-evaluation may result in us not pursuing the
commercialization of the low-rank coal-water fuel technology or the construction
of a demonstration facility.

GOVERNMENT REGULATION

Our Nolan Gold Project is comprised of non-patented federal
mining claims located on federal land managed by the U.S. Bureau of Land
Management. Our exploration activities on the Nolan Gold Project must be carried
out in accordance with a permit issued by the Bureau of Land Management. Current
exploration activities, including test mining activities, on the Nolan Gold
Project are currently being carried out under a permit approved by the Bureau of
Land Management under a 2002 to 2006 plan of

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operations submitted by us to the Bureau of Land Management.
Permit applications are submitted under a tri-agency application, and are
reviewed by agencies of the State of Alaska government, including the Department
of Natural Resources, the Department of Environmental Conservation, and Fish and
Game. We post a reclamation bond annually in an amount required by the State of
Alaska for each acre of proposed disturbance exceeding reclaimed acreage in a
permit period. Presently, we have posted the appropriate bonding, and as a
matter of company policy, endeavour to reclaim disturbed areas to equal or
exceed any new disturbance. Our current reclamation bond is approximately
$20,294 , of which $6,412 is refundable.

In addition to the federal permit, we also hold U.S.
Environmental Protection Agency water discharge permits for wastewater
discharges, which must be monitored and kept in compliance with EPA permit
conditions for turbidity, suspended solids, and heavy metals. We submit
Discharge Monitoring reports annually to the EPA. Nolan Creek is one of two
waterways in the State of Alaska classified as primary industrial usage.
Classification of a waterway for industrial usage does not relieve us from the
obligations of the Clean Water Act but serve to place industry ahead of other
potential uses for the Nolan Creek area.

We maintain a closed-circuit zero-discharge operation at our
Nolan operations.

The U.S. Army Corps of Engineers also reviews permit
applications for wetland determinations. The Nolan Deep Channel Project is not
located in wetlands, although we report annually to the ACOE on activities.

Our exploration activities are regulated by Mine Safety Health
Administration (MSHA). MSHA inspectors periodically visit our project to monitor
health and safety for the workers, and to inspect equipment and installations
for code requirements. All of our workers have completed MSHA safety training
and must take refresher courses annually when working on our project. A safety
officer for the project is also on site.

Other regulatory requirements monitor the following:

| | a. | Explosives and explosives handling.                 
| | -- | ----------------------------------------------------
| | b. | Use and occupancy of site structures.               
| | c. | Hazardous materials and waste disposal.             
| | d. | State Historic site preservation.                   
| | e. | Archaeological and paleontological finds.           
| | f. | Transportation and storage of hazardous
  materials.

COMPETITION

We are a mineral resource exploration company. We compete with
other mineral resource exploration companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
companies with whom we compete have greater financial and technical resources
than those available to us. Accordingly, these competitors may be able to spend
greater amounts on acquisitions of mineral properties of merit, on exploration
of their mineral properties and on development of their mineral properties. In
addition, they may be able to afford more geological expertise in the targeting
and exploration of mineral properties. This competition could result in
competitors having mineral properties of greater quality and interest to
prospective investors who may finance additional exploration. This competition
could adversely impact on our ability to finance further exploration and to
achieve the financing necessary for us to develop our mineral properties.

EMPLOYEES

We do not have any employees. Our operating and administrative
activities are carried out through our agreement with the Tri-Con Mining Group.
This relationship is explained in detail under the section of this annual report
entitled Certain Relationships and Related Transactions.

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RESEARCH AND DEVELOPMENT EXPENDITURES

We have spent the following amounts on research and development
activities during the past two fiscal years:

|                         | December 1, 2003     | December 1, 2004    
|------------------------ | -------------------- | --------------------
|                         | to November 30, 2004 | to November 30, 2005
|                         |                      |                     
|Research and Development |                      |                     
|Expenditures:            | $79,967              | $120,293            

Research and development activities were primarily attributable
to the pursuit of the development of our Low-Rank Coal-Water Fuel business.
During 2004 and 2005, the majority of the research and development costs
attributable to the low-rank coal-water fuel technology related to further
technical work on the fuel creation temperature and the preparation of a United
States grant application.

RISK FACTORS

We face risks in completing our exploration plans and achieving
revenues. The following risks are material risks that we face. We also face the
risks identified elsewhere in this Annual Report, including those risks
identified under Item 1 - Description of Business and Item 6 - Management
Discussion and Analysis or Plan of Operation. If any of these risks occur, our
business, our ability to achieve revenues, our ability to produce gold, our
operating results and our financial condition could be seriously harmed.

If we do not obtain new financings, the amount of funds
available to us to pursue exploration activities at the Nolan Gold Project and
to pursue further exploration of our mineral properties will be reduced.

We have relied on recent private placement financings in order
to fund exploration of the Nolan Gold Project. We will continue to require
additional financing to complete our plan of operations for exploration work at
the Nolan Gold Project and to carry out our exploration programs on our other
mineral properties. While our financing requirements may be reduced if gold
recoveries are achieved, any impairment in our ability to raise additional funds
through financings would reduce the available funds for the exploration of the
Nolan Gold Project, including additional test mining activities, with the result
that our plan of operations may be adversely affected and potential recoveries
reduced or delayed.

As we have a working capital deficit and we have not
reported revenues in our last three fiscal years there is no assurance that we
will be able to achieve the financing necessary to enable us to proceed with our
exploration activities, including test mining activities.

We had a working capital deficiency of $855,147 as of November
30, 2005. We did not report revenues in our last three fiscal years ended
November 30, 2005, 2004 or 2003. Our plan of operations calls for expenditures
of a minimum of $759,000 to be incurred by us over the next six months in order
to continue our Swede Channel underground test mining activities at the Nolan
Gold Project. While we will apply proceeds from gold sales generated from our
test mining activities to cover our exploration expenditures, we anticipate that
proceeds from gold sales over the next twelve months will not exceed our
projected expenditures during this period with the result that we will require
substantial financing in order for us to pursue our plan of operations. If we do
not achieve the necessary financing, then we will not be able to proceed with
our planned exploration activities, including our planned test mining
activities, and our financial condition, business prospects and results of
operations will be materially adversely affected.

As we have not established that there are any commercially
viable mineral deposits on our Nolan property and we have not established
commercially viable operations on the Nolan Gold Project, there is no assurance
that any amounts we recover from test mining activities on the Nolan Gold
Project will exceed the costs of recovering this gold.

Our activities at the Nolan Gold Project are in the exploration
stage. While we have undertaken test mining activities at the Nolan Gold Project
as part of our exploration programs, we have not yet

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established a commercially viable operation on our Nolan Gold
Project. Further, we have historically attempted to mine the placer gold
deposits at the Nolan Gold Project without obtaining sufficient drilling and
sampling information to meet data density standards commonly used by
commercial-sized placer mining companies. We may continue with test mining
activities at the Nolan Gold Project without establishing that the placer
deposits contain commercially viable mineral deposits. As we may proceed with
these activities without first establishing that the placer deposits contain
commercially viable mineral deposits, there is no assurance that we will recover
quantities of gold that will enable us to achieve sales of gold that will exceed
our costs of recovering the gold. In this event, our costs of exploration will
exceed any amount recovered from test mining activities that we carry out as
part of our exploration program on the Nolan Gold Project.

If we are unable to achieve projected gold recoveries from
our test mining activities at the Nolan Gold Project, then our financial
condition will be adversely affected and we will have less cash with which to
pursue our operations.

We plan to undertake test mining activities as part of our
exploration program for the Nolan Gold Project. Our objective is to recover gold
from test mining activities to off-set the exploration cost of our test mining
activities. As we have not established any reserves on this property, there is
no assurance that actual recoveries of gold from material mined during test
mining activities will equal or exceed our exploration costs. If gold recoveries
are less than projected, then our gold sales will be less than anticipated and
may not equal or exceed the cost of exploration and recovery in which case our
operating results and financial condition will be adversely affected.

If the price of gold declines, our financial condition and
ability to obtain future financings will be impaired.

Our business is extremely dependent on the price of gold. Our
recoveries from sales of gold for the current fiscal year are dependent on the
price of gold in addition to the quantity of gold that we are able to recover.
If gold prices decline prior to the recovery and sale of gold from the Nolan
Gold Project, then our recoveries from sales of gold and financial condition
will be adversely impacted. We have not undertaken any hedging transactions in
order to protect us from a decline in the price of gold. A decline in the price
of gold may also decrease our ability to obtain future financings to fund our
planned exploration programs activities.

The price of gold is affected by numerous factors, all of which
are beyond our control. Factors that tend to cause the price of gold to decrease
include the following:

|(a) | Sales or leasing of gold by governments and central
      banks;                                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                               
|(b) | A low rate of inflation and a strong US dollar;                                                                                                                               
|    |                                                                                                                                                                               
|(c) | Speculative trading;                                                                                                                                                          
|    |                                                                                                                                                                               
|(d) | Decreased demand for golds industrial, jewellery and
      investment uses;                                                                                                  
|    |                                                                                                                                                                               
|(e) | High supply of gold from production, disinvestment, scrap
      and hedging;                                                                                                  
|    |                                                                                                                                                                               
|(f) | Sales by gold producers and foreign transactions and
      other hedging transactions;                                                                                        
|    |                                                                                                                                                                               
|(g) | Devaluing local currencies (relative to gold price in US
      dollars) leading to lower production costs and higher production in
      certain major gold producing regions.

If costs of gold recovery at our Nolan Gold Project are
higher than anticipated, then our financial condition and ability to pursue
additional exploration will be adversely affected.

We have proceeded with test mining activities on the Nolan Gold
Project on the basis of estimated capital and operating costs. If capital and
operating costs are greater than anticipated, then cash used in test

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mining activities at the Nolan Gold Project will be greater
than anticipated. Increased cash used in test mining activities will cause us to
have less funds for other expenses, such as administrative and overhead expenses
and exploration of our other mineral properties and further test mining
activities on the Nolan Gold Project. In this event, our financial condition
will be adversely affected and will have less funds with which to pursue our
exploration programs.

If our exploration costs are higher than anticipated, then
our financial condition and ability to pursue additional exploration will be
adversely affected.

We are currently proceeding with exploration of our mineral
properties on the basis of estimated exploration costs. This exploration program
includes drilling programs at various locations within the Nolan Gold Project.
If our exploration costs are greater than anticipated, then we will have less
funds for our exploration activities, including test mining activities, that we
plan to carry out at our Nolan Gold Project, and for our general and
administrative expenses. In this event, our financial condition will be
adversely affected, our losses will increase and we will have less funds with
which to pursue our exploration programs. Factors that could cause exploration
costs to increase include adverse weather conditions, difficult terrain and
shortages of qualified personnel.

Exploration activities, including test mining and operating
activities, are inherently hazardous.

Mineral exploration activities, including test mining
activities, involve many risks that even a combination of experience, knowledge
and careful evaluation may not be able to overcome. Operations that we undertake
will be subject to all the hazards and risks normally incidental to exploration,
test mining and recovery of gold and other metals, any of which could result in
work stoppages, damage to property and possible environmental damage. The nature
of these risks are such that liabilities might result in us being forced to
incur significant costs that could have a material adverse effect on our
financial condition and business prospects.

There is no assurance that any of our mineral resources will
ever be classified as reserves under the disclosure standards of the Securities
and Exchange Commission.

This annual report discusses our mineral resources in
accordance with Canadian National Instrument 43-101, as discussed under the
section of this annual report entitled Description of Properties. Resources
are classified as measured resources, indicated resources and inferred
resources under NI 43-101. However, U.S. investors are cautioned that the
United States Securities and Exchange Commission does not recognized these
resource classifications. There is no assurance that any of our mineral
resources will be converted into reserves under the disclosure standards of the
United States Securities and Exchange Commission. Further, inferred resources
have a great amount of uncertainty as to their existence, and economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. Investors are cautioned not to
assume that part or all of an inferred resource exists, or is economically or
legally mineable.

If we experience exploration accidents or other adverse
events at our Nolan Gold Project, then our financial condition and profitability
could be adversely affected.

Our exploration activities, including test mining activities,
at the Nolan Gold Project are subject to adverse operating conditions.
Exploration accidents or other adverse incidents, such as cave-ins or flooding,
could affect our ability to continue test mining activities at the Nolan Gold
Project. A particular concern at the Nolan Gold Project is warm temperatures
that can reduce the winter season during which we can safely conduct underground
test mining activities. The occurrence of any of these events could cause a
delay in production of gold or could reduce the amount of gold that we are able
to recover, with the result that our ability to achieve recoveries from gold
sales and to sustain operations would be adversely impacted. Adverse operating
conditions may also cause our operating costs to increase. Exploration accidents
or other adverse events could also result in an adverse environmental impact to
the land on

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which our operations are located with the result that we may
become subject to the liabilities for environmental clean up and
remediation.

If we become subject to increased environmental laws and
regulation, our operating expenses may increase.

Our exploration activities, including test mining activities,
are regulated by both US Federal and State of Alaska environmental laws that
relate to the protection of air and water quality, hazardous waste management
and mine reclamation. These regulations may impose operating costs on us. If the
regulatory environment for our operations changes in a manner that increases
costs of compliance and reclamation, then our operating expenses would increase
with the result that our financial condition and operating results would be
adversely affected.

As we have not reported revenues in recent fiscal periods,
there is no assurance that we will be able to continue as a going
concern.

Our financial statements included with this Annual Report for
the year ended November 30, 2005 have been prepared assuming that we will
continue as a going concern. Our auditors have made reference to the substantial
doubt as to our ability to continue as a going concern in their audit report on
our audited financial statements for the year ended November 30, 2005. If we are
not able to achieve revenues, then we may not be able to continue as a going
concern and our financial condition and business prospects will be adversely
affected.

Because of the speculative nature of exploration of mineral
properties, there is no assurance that our exploration activities will result in
the discovery of new commercially exploitable quantities of minerals or that we
will be able to establish proven and probable reserves as a result of our
exploration.

We plan to continue exploration on our mineral properties. The
search for valuable minerals as a business is extremely risky. We can provide
investors with no assurance that additional exploration on our properties will
establish that additional commercially exploitable reserves of gold exist on our
properties. Problems such as unusual or unexpected geological formations or
other variable conditions are involved in exploration and often result in
exploration efforts being unsuccessful. The additional potential problems
include, but are not limited to, unanticipated problems relating to exploration
and attendant additional costs and expenses that may exceed current estimates.
These risks may result in us being unable to establish the presence of
commercial exploitable quantities of ore on our mineral claims with the result
that our ability to fund future exploration activities may be impeded.

As we face intense competition in the exploration industry,
we will have to compete with our competitors for financing and for qualified
managerial and technical employees.

The exploration industry is intensely competitive in all of its
phases. Competition includes large established exploration companies with
substantial capabilities and with greater financial and technical resources than
we have. As a result of this competition, we may be unable to acquire additional
attractive mining claims or financing on terms we consider acceptable. We also
compete with other exploration companies in the recruitment and retention of
qualified managerial and technical employees. If we are unable to successfully
compete for financing or for qualified employees, our exploration programs may
be slowed down or suspended.

Our business venture into the low rank coal water fuel
business is subject to a high risk of failure.

Our business venture into the low rank coal water fuel
technology business is at a very early stage and is subject to a high risk of
failure. The low rank coal water fuel technology has not been proven by us to be
a commercially viable fuel alternative. In order to establish commercial
viability, we will have to undertake the construction and operation of the
contemplated demonstration facility. The construction and three year operation
of the demonstration facility would cost approximately $20 million. Even if the
demonstration facility were constructed and operational, there is no assurance
that the commercial

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viability of this process would be established or that we would
be able to expand the facility into a commercially viable operation or to
generate revenues from this technology. We are pursuing funding from the United
States federal and state governments and from private sources to fund the
construction of the demonstration facility. There is no assurance that we will
succeed in obtaining government or private funding for this project. Even if
funding is obtained and the demonstration facility constructed, there is no
assurance that we would be able to generate profits or revenues from the
operation of the demonstration facility.

- 10 -

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ITEM 2.     DESCRIPTION OF
PROPERTIES.

Our head office is located at Suite 505, 1111 West Georgia
Street, Vancouver, British Columbia, Canada V6E 4M3. These premises are
comprised of approximately 4,549 square feet and are leased for a term expiring
in February 2007.

Our four groups of mineral properties located in Alaska are
described below. This disclosure incorporates the results of a technical report
prepared by J.W. Murton and Associates, J.W. Murton P. Eng. in accordance with
the requirements of Canadian National Instrument 43-101  Standards of
Disclosure for Mineral Projects (NI 43-101). Mr. Murton is a qualified
person under NI 43-101 who is independent of Silverado. This technical report
is referred to as the B.C. Technical Report. The Company has filed the B.C.
Technical Report with the British Columbia Securities Commission. Investors may
view the B.C. Technical Report at the SEDAR web site at www.sedar.com.

The B.C. Technical Report provides disclosure regarding
Silverados Alaska properties in accordance with NI 43-101. U.S. Investors are
cautioned that the United States Securities Commission does not recognize the
terms indicated resources and inferred resources, as more particularly
discussed below.

- 11 -

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NOLAN GOLD PROJECT

We do not have any commercially viable reserves on any of our
properties that comprise the Nolan Gold Project or any of our other properties.
We plan to carry out exploration activities on the Nolan Gold Project that are
referred to as test mining activities. The objective of the test mining
activities on the Nolan Gold Project is to expand our knowledge and geological
data of the mineralization of the placer deposits on the Nolan Gold Project and
to recover gold from test mining activities in order to pay for a portion of the
expense associated with exploration of the Nolan Gold Project. As we have not
established commercially viable reserves on the Nolan Gold Project, we
anticipate that recoveries of gold from test mining activities will not be
sufficient to pay for the full cost of exploration. There is no assurance that
our test mining activities will result in a final evaluation that a commercially
viable mineral deposit exists on any of our mineral properties that comprise the
Nolan Gold Project.

1. Location and Access

The properties comprising our Nolan Gold Project are located
approximately 8 miles west 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 Nolan Gold Project is accessible by the Elliott and the
Dalton Highways, about 280 road miles north of Fairbanks Alaska. An all weather
road connects Nolan Creek to the Dalton Highway and is suitable year-round for
semi-tractors loaded with fuel and equipment. Air transportation is available by
several commercial carriers on two daily flights to Coldfoot, Alaska, about 15
miles south-southeast of Nolan.

A map illustrating the location and access to the Nolan Gold
Project is provided below:

- 12 -

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The Nolan properties are comprised of four non-continuous
groups of 213 federal unpatented placer claims and one group of 67 federal
unpatented lode claims. There has been no legal survey on any of the claims.
These groups of properties are described as follows:

(a) Nolan Gold Project

The Nolan Gold Project includes 198 contiguous claims plus a
second group of 8 continuous claims lying about 1⁄2 mile to the east of the main
block. Silverado Green Fuel is the registered owner of all 206 placer claims.
The Nolan Gold Project includes the claims referred to as the Nolan placer
claims, which include the Nolan Deep Channel, the Smith Creek, the Thomsons Pup
and the Marys Bench claims.

- 13 -

---

The Thomsons Pup claims consist of 6 unpatented federal placer
claims registered in the name of Silverado Green Fuel. Our ownership in these
claims is subject to a royalty of 3% of net profits on 80% of production payable
to Frank Figlinski and Lyle R. Carlson.

Seven claims of the Smith Creek property are in two small
groups, on Marion and Clara Creeks, 11 and 12 miles south-southeast of the Nolan
Project. These claims are presently inactive.

(b) Nolan Lode

The Nolan Lode claims are comprised of 67 unpatented federal
lode claims. Ownership of these federal lode claims is in the name of Silverado
Green Fuel.

3. History of Operations

Placer mining on Nolan Creek and its tributaries was first
recorded at about the turn of the last century. During the ensuing years and up
to 1942, recoveries of approximately 120,000 oz. of placer gold were reported.
This gold is well known for its coarse size and high fineness. The early miners
mined Nolan Creek and its left limit tributaries, particularly Fay, Smith and
Archibald creeks by surface methods on the upper areas and by underground
methods in the lower reaches of the creeks when overburden became too deep.
Shafts are found throughout the areas being discussed.

We first began acquiring placer claims on Nolan Creek in 1979.
The following table summarizes gold production and gold recoveries by year from
the Nolan properties since 1980.

YEAR
    STATUS OF
      OPERATIONS
    NATURE OF
      OPERATIONS
    LOCATION
    BCY MINED
    Tr.Oz.GOLD
      RECOVERED
    RECOVERED GRADE
      OZ/BCY (Bank Cubic Yards)1980-88
    Test Mining During
      Exploration
    Surface Operations
    Archibald / Fay Creek
    40,000est
    2,400 *
    0.060est1993
    Production
    Surface Operations
    Thompson Pup
    33,800
    1,304
    0.0381994
    Production
    Underground Operations
    Marys Bench Underground
    16,143
    2,697
    0.1671994
    Production
    Surface Operations
    Eureka Bench Open Cut
    29,300
    5,733
    0.1961995
    Production
    Surface Operations
    Phase 3 Open Cut
    22,285
    2,394
    0.1071995
    Production
    Underground Operations
    3B1 Underground
    12,991
    1,006
    0.0771995
    Production
    Surface Operations
    West Block OpenCut
    18,988
    1,305
    0.0691995
    Production
    Surface Operations
    Marys Bench hydraulic
    600
    27
    0.0451996
    Test Mining During
      Exploration
    Surface Operations
    Dolney Bench Surface
    5,042
    126
    0.0251998
    Test Mining During
    Surface Operations
    Archibald Creek
    5,947
    128
    0.022


- 14 -

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YEAR
    STATUS OF
      OPERATIONS
    NATURE OF
      OPERATIONS
    LOCATION
    BCY MINED
    Tr.Oz.GOLD
      RECOVERED
    RECOVERED GRADE
      OZ/BCY (Bank Cubic Yards)Exploration
    
    Surface1999
    Test Mining During
      Exploration
    Underground Operations
    Swede Channel Underground
    4,575
    623
    0.1361999
    Test Mining During
      Exploration
    Surface Operations
    Workmans Bench Open Cut
    5,580
    112
    0.0202000
    Test Mining During
      Exploration
    Surface Operations
    Workmans Bench Open Cut
    14,919
    201
    0.0132003
    Test Mining During
      Exploration
    Underground Operations for
      Nolan Deep Channel; Surface Operations for Wooll
      Bench, Marys Bench and other
    Nolan Deep Channel, Wooll,
      Marys Bench, Other
    30,279
    451
    0.015TOTALS
    
    
    
    240,449
    18,507
    0.077


*Includes 1,320 ounces produced by lessee.

We have not achieved profitability in any of the years during
which we have carried out production or test mining activities at the Nolan Gold
Project.

Test mining activities were suspended during 2001 but
underground exploration started again in 2002 with the driving of the Nolan Deep
Channel decline. This work involved driving three decline entries to access the
Nolan deep channel and recovery of gravel material during the winter season of
2002  2003. We had projected that we would excavate a targeted zone of
approximately 168,000 square feet of bedrock in our operations at the Nolan Deep
Channel during the 2002/ 2003 winter season. We had projected that this material
would contain approximately 21,480 ounces of gold based on our geological
exploration of the Nolan Deep Channel. As a result of the water problems
associated with unseasonably warm temperatures during the 2002/ 2003 winter, we
excavated only 31,000 bedrock square feet of material from the Nolan Deep
Channel operations from which we have recovered 308.7 ounces of gold. We
subsequently stopped test mining exploration of the Nolan Deep Channel.

We also processed gravel material recovered from surface
locations, namely Wooll Bench, Marys Bench and upper Nolan Creek, for gold
recovery during the summer of 2003.

We did not carry out any gold recovery operations during 2004
and 2005 as we focused on lode exploration on the property, as opposed to test
mining activities.

4. Present Condition of the Property and Current State of
Exploration

We have spent approximately $27,000,000 over the last 18 years
acquiring, exploring and undertaking test mining activities and test exploration
on the Nolan Gold Project. To May 8, 2004, we had completed

- 15 -

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a total of 682 drill holes and 41,295 feet of drilling. About
219 of those drill holes were completed along the frozen gold bearing deep
channel of the Nolan Creek known as the Nolan Deep Channel. We have also
completed 9 drill holes and 2020 feet of drilling while testing lode sources of
the placer gold on the Solomon Shear Trend.

We received an engineers report in the summer of 2002 that
outlined a three year plan to recover gold from the Nolan Deep Channel through
underground exploration. The Nolan Deep Channel is an underground frozen river
bed located approximately 55 to 200 feet beneath the existing Nolan Creek. The
Nolan Deep Channel stretches for about 2.5 miles, beginning at the confluence of
the existing Fay and Nolan creeks and continues downstream to the confluence of
the Nolan Creek and the Wiseman Creek. Our strategy for test mining activities
from exploration of the Nolan Deep Channel is to drill and blast frozen gold
bearing gravels. Operations on the Nolan Deep Channel mine are underground and
are accessed using decline tunnels. The frozen gravel is then transported to the
surface using specially designed underground haulers and stockpiled. The blasted
frozen gold bearing material is later thawed for gravity concentrating of the
gold present in the material.

We upgraded the Nolan Exploration camp in 2002/ 2003 in order
that test mining activities could resume. Our upgrading efforts included the
purchase and installation of a ten-room housing unit, the construction of an
engineering office, the upgrade of laboratory facilities and the installation of
communications facilities. These buildings and equipment are in operating
condition. Our camp is capable of housing 30 workers at present. In addition, we
purchased vehicles, surface and underground exploration equipment including dump
trucks and drills.

We also have a gold recovery facility located at the Nolan Gold
Project that we use to recover gold from gravel that we recover from test mining
activities that we complete as part of our exploration of the Nolan Gold
Project. This gold recovery facility was modernized in 2003 by the installation
of new gold recovery circuitry. This modernization was undertaken in order that
gravel recovered from our test mining activities could be processed for gold
recovery. Our gold recovery facility incorporates nugget traps, hydraulic
riffles, classification and gravity concentration processes in order to remove
gold present in gravel material. The gold recovery facility has a processing
rate of 75 cubic yards of gravel material per hour. The gold facility can only
be operated in the late spring to early fall months when free-flowing water is
available to operate the plant.

We undertook test mining activities in the Nolan Deep Channel
during the 2002/ 2003 winter season. Operational problems associated with warm
weather during the winter of 2002/ 2003 caused our costs to increase over
projected costs and our recovery of gold bearing material to be significantly
less than projected, as discussed above under the heading History of
Operations.

We also undertook test mining activities on the Marys Bench
and Wooll Bench regions of the Nolan Gold Project during the summer and fall of
2003, as discussed above under the heading History of Operations. The test
mining activities were surface operations.

Gravel recovered from test mining underground and surface
operations during the 2002/2003 winter season and the 2003 summer season were
processed in our gold recovery facility at the Nolan Gold Project during the
summer of 2003. We did not carry out any gold recovery activities during either
the summer of 2004 or 2005.

The Nolan Gold Project does not include any commercially viable
reserves and our activities at the Nolan Gold Project, including test mining
activities, are exploratory in nature.

Exploration Objectives for the Nolan Gold Project

Our exploration plans are to further define gold deposits in
order to provide a basis for the assessment of the feasibility of future
additional test mining activities at the Nolan project. We are currently
undertaking an extensive geological exploration program on the Nolan Gold
Project. The program includes drilling, as well as the review of geological and
geophysical data. The overall objectives of our exploration program are as
follows:

- 16 -

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|1. | To identify surface placer deposits at our Nolan Gold
      Project that are prospective for test mining operations. In general, these
      deposits are located in benches that are ancient river beds and lakeshore
      deposits located above the present channel of Nolan Creek. These deposits
      include Marys Bench, Wooll Bench, Workmans Bench, Swede Channel, Upper
      Nolan Creek (deep channel) and Lower Nolan Bench. The objectives of our
      drilling program will include the determination of the nature and extent
      of areas of known bench deposits that are prospects for test mining
      operations and the identification of new bench deposits that may be
      prospects for test mining operations. Marys Bench East, the Swede Channel
      and the Nolan Deep Channel, in that order, are our exploration priorities
      as they have showed the most positive results from earlier exploration
      that we have completed. Wooll Bench and Workmans Bench have been less
      extensively explored with only limited drilling. The Lower Nolan Bench has
      not been drilled.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | To determine whether there is a potential lode deposit of
      gold located on the Nolan Gold Project which may be the source of the
      placer gold found on the Nolan Gold Project. A lode deposit of gold occurs
      when gold is present in its host rock and is differentiated from placer
      gold which is gold that has been removed from its host rock by the process
      of erosion. Our drill program will be part of our ongoing geologic and
      geophysical investigations to determine whether there is a lode source on
      the Nolan Gold project that is the source of our placer gold
    deposits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | To identify any placer deposits at the Slisco Bench
      deposit, which is located on our Hammond River property that are
      prospective for test mining operations. The Slisco Bench deposit is
      approximately 3 to 4 miles northeast of the Nolan Deep
  Channel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

We have been working on interpreting the geology of the Nolan
area since 1979, when we first acquired the project. Our latest and most
extensive exploration program began in early 2003 and was directed at improving
our placer deposit definition and discovering potential lode sources of the
placer gold. Our senior exploration geologists and mining engineers have worked
to move this objective forward. Our exploration efforts have included the
analysis of geophysical data, geochemical sampling results, company records and
analysis provided by government mineral investigation efforts/ publications as
well as the trenching and exploration drilling of target areas.

Exploration Work Completed at the Nolan Property during
2005

An Independent technical report that was commissioned during
June of 2004 to evaluate all of Silverados mineral properties was completed in
December of 2004.

During the first six months of 2005, we completed a thorough in
house review of our exploration projects carried out at Nolan over the past 25
years. These programs include lode and placer drilling, various geophysical
surveys, geochemical surveys, geologic mapping, and a number of bulk samples in
volumes ranging from a few cubic yards to more than 10,000 cubic yards of gold
bearing gravels.

Although we had planned for a substantial amount of lode and
placer gold exploration drilling to be conducted during 2005, funds were not
available to support such a program. By mid-summer of 2005, we had begun to
focus on several areas which we felt were sufficiently developed by prior
geologic investigations and supported by drilling and sampling data. After
considering the relative merits and limiting factors for the areas being
evaluated, a decision was made to drive a drift into the area known as the Swede
Channel.

The Swede Channel is an incised gulch which was created by
inter-glacial cross cutting of placer gold bearing bench deposits along the
right limit, the east side, of Nolan Creek. We believe, based on the results of
our exploration, that placer gold originally contained in the bench gravels was,
as a result of the incising of the bench, re-deposited in the Swede Gulch. We
have defined the location of the gulch by drilling. During the winter of
1998-1999, a bulk sample was taken from the Swede Gulch by driving an adit into
the hillside for about 400 feet that yielded 623 ounces of gold.

- 17 -

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Our crews were onsite at the Nolan Gold Project by mid November
2005 and performed maintenance and repairs to our underground mining equipment.
By the end of November 2005 the portal was started into the Swede channel. By
the end of December 2005 the heading had advanced 250 feet into the
hillside.

Work Planned for Nolan During 2006

We plan to continue test mining activities during 2006 by
advancing the Swede Channel adit that we commenced in November 2005 towards a
drill hole, which intercepted the channel about 350 feet beyond the current
workings. The operation will run for two shifts and will test mine an estimated
25,000 square feet of the channel bottom. The stockpiled gravel will be thawed
and sluiced for gold recovery in the early summer of 2006.

Depending on the results of this present tunnel project and an
evaluation of the values of gold returned versus costs, we may continue the
underground project on the Swede Channel as soon as winter weather permits,
usually by late September or October. At this time, there is insufficient
information about the extent of the channel and the gold values within the
channel, beyond our current level of knowledge, to make a determination as to
whether further test mining is warranted. A great amount of information will be
acquired during the next six months, and it is that knowledge which will provide
the basis for determining whether to extend the Swede project into another
season.

We forecast that the cost for our current test mining
activities for the Swede Channel project, including sluicing, will be
approximately $759,000. Any gold recovered from the sluicing of the material
will offset against the cost of the project. We caution investors that our test
mining activities are exploration activities and that we have not established
that any reserves on the Nolan Gold Project. Accordingly, there is no assurance
that the value of the gold that we recover will exceed the costs of recovering
the gold.

Swede Channel Winter Project and Estimated
      Summer Processing Costs2006WinterExcavation
    
    
    ProcessingItem
    
    Phase
    
    
    Phase
    
    
    TotalSalaries and Wages
    $
    319,000
    
    $
    92,000
    
    $
    411,000Supplies
    
    245,000
    
    
    46,000
    
    
    291,000Sundries
    
    49,000
    
    
    8,000
    
    
    57,000Total
    $
    613,000
    
    $
    146,000
    
    $
    759,000


- 18 -

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We plan to complete the following additional exploration work
for the Nolan Gold Project during 2006:

Lode Exploration

Solomons Shear

We plan to dedicate up to $500,000 to continue exploration work
on the Solomons Shear structure during 2006. We plan to conduct drilling, either
rotary or core, aimed at refining the definition of our best known occurrences
of gold mineralization associated with the Solomons Shear. We will step out from
our first drill holes as our budget and initial drill results dictate. Even if
results of the drilling program are positive, substantial and extensive
geological exploration and drilling beyond the scope of the current drilling
program will be necessary to establish whether any identified mineralization
will support economic development and mining of the deposit. As our exploration
work continues and we continue to build our data base, we may entertain the
possibility of joint-venture agreements with other potentially interested
parties. At this time, no outside parties are being considered to join our lode
exploration program. There is no assurance that the results of our planned
drilling program will be positive or that any economic lode deposit of gold is
associated with this mineralization.

Placer Exploration

Marys Bench East

Based on the results of our geological exploration conducted in
the first half of 2004, we have determined to proceed with a phase one drilling
project on the gravel bench known as the Marys Bench East. The Marys Bench
East gravel bench is located approximately 200 to 300 feet in elevation above
the confluence of Nolan Creek and Archibald Creek. The drilling program will
include a series of drill holes seeking to expand the limits of the deposit to
the south. This exploration phase will be completed over a two month period. The
primary objective of this drilling program is to determine whether test mining
activities on the Marys Bench East gravel bench are warranted, and whether
there is continuity within this gold resource and the Swede Channel. Up to
$175,000 will be dedicated to this project.

2006 Exploration Budget

Our current annual operational budget for exploration
activities, including test mining activities, planned for the Nolan Gold Project
for the next twelve months includes the following:

Swede Test Mining and Sluicing
    $
    759,000Equipment Lease and Maintenance
    
    500,000Geology and Engineering:
    
    360,000Drilling Lode and Placer
    
    250,000Insurance
    
    140,000Fuel
    
    120,000Office and Administration
    
    120,000Travel, Food and Accommodations
    
    90,000Reclamation
    
    76,000Warehousing and Expediting
    
    60,000


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Land Claims
    
    50,000Freight
    
    10,000Safety and Security
    
    4,000Total
      Budget
    $
    2,539,000


Of our total budget, we anticipate that we will spend
approximately $ 759,000 on test mining activities and $1,000,000 on additional
lode and placer exploration activities. The balance of $780,000 is for equipment
payments, claims maintenance costs, and general and administrative costs
associated with the property.

5. Geology

The Nolan Area properties are located in the Brooks Range of
northern Alaska. Regionally, the area is underlain by a series of
metasedimentary rocks of the Coldfoot subterrain and Hammond subterrain of the
Arctic Alaska terrain. The metasedimentary rocks have been assigned a Middle to
Upper Devonian age. During Late to Early Cretaceous time, the Middle Devonian
metasedimentary rocks of the Coldfoot subterrain were thrust northward onto the
Middle to Upper Devonian metasedimentary rocks of the Hammond Subterrane. This
is represented by a large thrust belt in the Nolan area and resulted in regional
metamorphism of the continental rocks that were overridden.

The property area is underlain by gray  black phyllite, black
slate and metasiltstone, gray  black and brown slate, brown micaceous schist
and phyllite, gray  black micaceous schist, gray green to black muscovite
schist that locally contains abundant pyrite and arsenopyrite, and banded
quartzite interbedded with chloritic quartzite and quartz mica schist.

The valley bottoms and side hills are mantled by a heavy cover
of glacial outwash and lake bottom sediments. Depth of overburden varies from a
very few feet on the upper slopes to 10s to 100s of feet in the lower valley
bottoms on the claims. Deeper areas of cover are permanently frozen. There have
been four periods of glaciation on the Nolan properties and the placer gold
distribution has been variously affected by the glaciation.

The placer deposits are of three types:

|1.) | Shallow placers concentrated in present stream
      and river valleys;                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                           
|2.) | Placer gold concentrated on bedrock in deeply incised
      bedrock channels that have been covered by 10 to 100s of feet of gravel
      and organic material; and                                                                                      
|    |                                                                                                                                                                                                                                                           
|3.) | Placer deposits concentrated on benches lying anywhere
      from 10 to 400 feet above present stream levels. These bench gravels were
      deposited when streams were flowing at higher levels relative to present
      due to damming by glacial ice.

Placer gold is the main type of mineralization of interest on
the property, however, we are currently exploring for a lode source for the
placer gold. Known gold-bearing lodes identified on the Nolan Lode properties
consist of stibnite-bearing quartz veins, and quartz veins containing free gold,
which fill fractures cutting phyllite.

Our geologist undertook a geophysical program analysis which
identified a linear resistivity low that has been named the "Solomon Shear
trend". The resistivity low is coincident with a geochemical anomaly for gold,
antimony, arsenic and other indicator minerals. This anomaly trends sub-parallel
to Nolan Creek along the east side from south of Smith Creek into the Hammond
River drainage. We will continue our 2005 exploration program with the objective
of identifying mineralization of commercial significance along this zone.

- 20 -

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6. Estimates of Indicated and Inferred Resources

We have not established any commercially viable reserves on any
of our properties that comprise the Nolan Gold Project.

In the B.C. Technical Report, Mr. Murton reported the following
indicated and inferred resource estimates for the Nolan area properties. These
resource estimates have been prepared in accordance with Canadian standards for
reporting resources and reserves as set out in NI 43-101 and are summarized
below. BCY refers to bank cubic yards in the following tables:

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.

Name
    Location
    No. of **Drill
      Holes**
    Volume
    Grade
    CategoryD Block, #1 Below Disclover, Nolan Creek
    On claim Discovery & #1 Below
      Discovery, Nolan Creek
    15
    11,100 BCY
    0.35 oz./BCY
    Indicated Resource


TOTAL INDICATED RESOURCE  NOLAN
AREA PROPERTIES

| | BCY:   | 11,100     
| | ------ | -----------
| | Grade: | 0.35 oz/BCY

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

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 it. Inferred resources have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. U.S.
investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.

Name
    Location
    No. of **Drill
      Holes**
    Volume
    Grade
    CategoryD Block #2 Below Discovery, Nolan Creek
    On claim #2 Below Discovery,
      Nolan Creek
    11
    55,000 BCY
    0.04 oz./BCY
    Inferred Resource3B3 Block
    Nolan Creek below D Block #2
    12
    14,600 BCY
    0.1 oz /BCY
    Inferred Resource


- 21 -

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Name
    Location
    No. of **Drill
      Holes**
    Volume
    Grade
    CategoryWooll Bench
    Right limit of Archibald Creek
    4
    26,000 BCY
    0.02 oz /BCY
    Inferred ResourceSwede Gulch
    Left limit of Nolan Creek
    5
    16,000 BCY
    0.13 oz/BCY
    Inferred ResourceSmith Creek Camp
    Right limit of Smith Creek
    5
    35,500 BCY
    0.03 oz/BCY
    Inferred ResourceHammond / Slisco Bench
    Right limit of Hammond River and
      right limit of Vermont Creek
    64
    42,800 BCY
    0.03 oz/BCY
    Inferred Resource


| | TOTAL INFERRED RESOURCE  NOLAN AREA
      PROPERTIES |             
| | ----------------------------------------------------- | ------------
| |                                                       |             
| | BCY:                                                  | 189,900     
| | Grade:                                                | 0.045 oz/BCY

When estimating the above resources, emphasis was placed on
reported assay values for individual drill holes. The drill hole intercept
length was combined with the assay value to create a value of oz./BCY (bank
cubic yard). The drill hole locations were plotted and an area of influence
created around each hole to generate a total BCY figure. The density of drilling
and values for contained gold were the criteria used for the final
calculations.

We have discovered a number of new areas that contain placer
gold mineralization on the Nolan property that are too loosely defined under NI
43-101 to allow the mineralization to be categorized as a resource. Additional
exploration drilling and testing may bring these mineralized areas up to a
higher level of confidence and thus a higher category which could be included in
the total gold inventory of the property. There is no assurance however that
this upgrade will take place.

Mr. Murton also concluded that there are indications of lode
gold mineralization on the Nolan properties, but exploration is in a very early
phase and more work is required before any assessment of this mineralization may
be a completed.

HAMMOND PROPERTY (SLISCO BENCH)

1. Location and Access

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.

A map illustrating the location and access to the Hammond
property is provided above under the heading Nolan Gold Project.

2. Ownership Interest

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Our Hammond Property consists of 24 federal placer claims and
36 federal lode claims covering one and one-half square miles. We entered into a
lease of mining claims with option to purchase with Alaska Mining Company Inc.
(Alminco) on December 14, 1994. The original term of the Alminco agreement was
for five years, subject to our right to extend the lease on a year to year
basis. We have exercised our right to extend the term. Under the terms of the
agreement, we have the exclusive right to carry out exploration on the Hammond
mineral claims. We must pay Alminco a royalty equal to 10% of gross production
from the Hammond claims, subject to a minimum royalty of $80,000 per year. We
have the option to purchase those lode claims not covered by the placer claims
for a price of $5,000,000, payable by the payment of a 2% royalty on all net
smelter returns generated from production on these claims.

As of November 30, 2005, we were in arrears of required mineral
property claims and option payments of $400,000 and therefore our rights to the
property were adversely affected. We are currently re-negotiating the terms and
conditions of the Alminco agreement with Alminco. Alminco has confirmed that our
mineral claims and options are in good standing on the understanding we will use
our best efforts to pay the minimum royalty payments, including the payments
that are in arrears for the past four years, when business conditions permit,
however there is no assurance that we will be able to successfully renegotiate
the terms and conditions of the Alminco agreement.

3. History of Operations

In 1993 we acquired the network of mining claims overlying the
Slisco Bench gold-placer deposit. Since that time, we have conducted geological
and drilling-oriented investigations on the property, and through those
investigations, we have determined that a significant gold-placer deposit exists
along the ancient buried high channel of the Hammond River. To date, we have
completed 58 exploration drill holes on the Slisco Bench. While Slisco Bench has
an indicated length of about 4500 feet, only about 1200 feet of the up-stream
part of the bench were probed by our 1995 drilling program. The ancient river
channel was located and found to contain placer gold similar to the gold nuggets
which we have been targeting on the Nolan Creek claims. The channel is overlain
by as much as 200 feet of frozen overburden. Therefore, if sufficient values of
gold per cubic yard can be verified, Slisco Bench may be a favourable location
for us to develop underground test mining activities.

The Hammond River drainage has been the subject of intense
exploration since the early 1900s. Poor exposures, difficult terrain, and deep
overburden confronted the first explorers and early miners in the Hammond River
region. Those miners who worked with persistence succeeded for the most part in
developing small-scale projects constrained in scope by the inadequacies of
their mechanical equipment, and the lack of technical knowledge and financial
support. Nevertheless, because of the work done by these early explorers, the
Hammond River has produced thousands of ounces of placer gold, including the
second largest gold nugget ever discovered in Alaska  a nugget weighing more
than 150 ounces.

4. Present Condition of the Property and Current State of
Exploration

At present, we are restricting work on the Hammond property to
federal claims filings and maintenance. In the future we may design an
exploration drill program to test the entire length of the Slisco Bench in order
to determine the location of the ancient river channel and to analyze drill
samples for their placer gold content. We presently estimate that up to several
hundred drill holes would be necessary to fully define the location and gold
values of this area. We presently believe that drilling should occur in two
phases, the first phase designed to outline the presence of the ancient channel
and determine approximate dimensions as well as tenor of the gold bearing
gravels. The second phase of drilling will be at closer line intervals with
tighter hold spacing, and would serve to provide the technical information
required upon which a mining pre-feasibility study would be based.

There is no plant or equipment located on the Hammond property.
  Currently, there is no power supply to the Hammond propert.

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5. Geology

The primary area of geological interest on the Hammond Property
  is placer gold deposits that are similar to the placer gold deposits present
  on the adjoining Nolan Gold Project. Geologically, the Slisco Bench gold-placer
  deposit is a deeply buried, permanently frozen, ancient and now abandoned river
  channel of the Hammond River. Subsequent to the geologic processes that forced
  the Hammond River to abandon its channel at Slisco Bench, glacial and peri-glacial
  processes (processes acting upon permanently frozen terranes) buried the gold-bearing
  gravel of the Slisco deposit with as much as 230 feet of frozen sedimentary
  detritus. The deep thickness of frozen overburden identified probably prohibits
  the economical application of traditional open-pit methodologies. Underground
  placer gold recovery methods which we have utilized extensively would probably
  be used to remove the gold-bearing gravel.

Mineral investigations by our geologists in conjunction with a
federal study of mineral resources in the area have revealed the presence of
west-north-westerly striking gold bearing hydro-thermal quartz veins on the
property. Those veins, in conjunction with a north-easterly trending shear zone
are thought to have contributed, at least in part, to the placer gold found on
the property.

6. Estimates of Indicated and Inferred Resources

We have not established any commercially viable reserves on the
Hammond Property.

The conclusions of the BC Technical Report regarding mineral
resources on the Hammond Property are summarized above under the heading Nolan
Gold Project  Estimates of Indicated and Inferred Resources.

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ESTER DOME PROJECT

The Ester Dome Project encompasses all of our optioned
properties on Ester Dome.

1. Location and Access

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.

A map illustrating the location and access to the Ester Dome
Project is provided below:



- 25 -



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2. Ownership Interest

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 Green Fuel is the
registered owner of all claims.

The total area of all claims equals approximately 2.5 square
miles and all claims are valid until Sept.1, 2006. There has been no legal
survey on the claims.

There are 3 separate agreements covering the above mentioned 53
claims on the Ester Dome property.

a. Grant Mine

The 26 State mineral claims called the Grant Mine claims are
covered by an option to purchase agreement with Mr. Roger Burggraf dated October
6, 1978, as amended in October 1997. Our ownership interest is subject to the
payment of 15% of net profits until $2,000,000 has been paid, and 3% of net
profits thereafter. Our minimum work requirements are $15,000 per year. In
December of 1997, for the purpose of facilitating an agreement with Placer Dome
U.S. Inc. and in consideration for us making a payment of $20,000, the
conditional purchase and sale agreement was amended to reduce the royalty
payments to 3% of net profits as defined in the agreement. Subsequent to
November 30, 2003 we made delinquent payments in the amount of $20,000. The
owner of the claims has confirmed our agreement is in good standing.

b. St. Paul / Barelka

The 22 State mineral claims called the St. Paul / Barelka
claims are covered by a purchase agreement with Don May and Paul Barelka dated
May 12, 1979. Our ownership interest is subject to the payment of 15% of net
profits until $2,000,000 (inflation indexed from 1979) has been paid and 3% of
net profits thereafter.

c. Dobbs

The remaining 4 state mineral claims and 1 federal mineral
claim called the Dobbs claims are covered by a purchase agreement with Mr. G.
Dobbs dated November 6, 1984, as amended on August 4, 1996. Our ownership
interest is subject to the payment of 15% of net profits until $1,500,000 has
been paid and 3% of net profits thereafter. Our minimum work requirements are
$1,500 per year. Access to Dobbs is the same route as St. Paul / Barelka. Our
lease on this property is for 10 years, beginning in 1984, with five-year
renewals thereafter. Subsequent to November 30, 2003, we paid delinquent
payments in the amount of $9,117. The owner of the claims has confirmed our
agreement is in good standing.

3. History of Operations

The Ester Dome property first became known as a result of the
discovery of placer gold in the creeks draining Ester Dome in about 1902. By
1909, approximately 1.5 million oz. had been mined from alluvial deposits.
Ultimately, approximately 3 million ounces of placer gold have been mined from
creeks draining Ester Dome.

Shortly after the discovery of placer gold, lode claims were
staked on quartz veins discovered on Ester Dome. By 1912, four stamp mills were
operating in the area.

a. Grant Mine

Work at the Grant Mine, on the eastern flank of Ester Dome was
initiated in about 1928 with the sinking of shafts to bedrock to attempt to
locate buried alluvial gold. This work, while it did not locate alluvial gold,
did reveal quartz rubble near bedrock containing free gold. Mr. Grant, the claim
owner, sunk two shafts through about 80 of loess (silt) cover and by 1931 had
reportedly mined about 600 tons from the newly

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discovered Irishman Vein. This work was all completed from the
only levels established, the 50, 100 and 150levels.

Mr. Roger Burggraf purchased the claims from Grants heirs in
1973 and deepened the shaft to the 200 level. This work revealed a new vein,
the ODea vein which has eclipsed the Irishman vein in importance. Burggraf
completed limited development on the Irishman vein and the ODea vein during the
next 5 years, and in 1978 entered into a lease option agreement with
Silverado.

Over the subsequent 8 years up to 1986, we completed an
extensive surface exploration and underground development program as well as
test milling the underground development muck from work on the ODea structure,
in a small (approximately 50 tons per day) gravity mill, during 1980  1982. In
1984, we entered into a joint venture agreement with Aurex Inc., a subsidiary of
Marubeni America Corporation to further explore and develop the Grant Mine plus
a larger area of interest around the mine. Aurex withdrew from the joint venture
at the end of 1985 and the mill was shut down in Jan. 1986.

A total of approximately 22,000 tons were mined from the ODea
structure during the period 1980 to January 1986, yielding 4,090 ounces of
gold.

When Aurex became involved in the joint venture, a decision was
made to construct a 230 ton per day gravity / cyanide mill to treat the expanded
resource that had been outlined on the ODea structure above the 200 level.
This mill and related support facilities was constructed by Tri-con Mining Inc.
for Silverado using a design provided by Melis Consulting Engineers Ltd. The
completed mill was commissioned in October 1985 and was shut down in January
1986. During the short mill run, the plant operated above design capacity. Lower
feed grades than had been forecast plus other underground problems caused Aurex
to elect to withdraw from the project and a premature shutdown of the
facility.

During the period 1987  1989, we decided to open pit mine the
Ethel - Elmes structures, located a short distance from the mill facility on the
Dobbs claims adjacent to the Grant Mine. This mining operation generated
approximately 71,620 tons of gold bearing material. Combined with the previously
mined stockpile from the ODea vein, (11,000 tons), and material from another
source (Silver Dollar), the total tonnage processed amounted to 111,852
tons.

The total tonnage processed through the Grant mill up to 1989
amounts to 111,852 tons with a total of 11,215 oz. of gold produced for an
average calculated recovered grade of 0.10 oz/ton. Gold recoveries from the
Grant Mine are summarized as follows:

YEAR
      DRY TONS MILLED
      RECOVERED OZ. GOLD
      RECOVERED GRADE1980  1981(1)
      4,170
      1,424
      0.3411985 1986
      7,069
      1,372
      0.1931987 - 1989
      100,586
      8,419
      0.083**TOTALS**
      **111,852**
      **11,215**
      **0.10**


| | (1) | This material was processed through a 20 ton per day
      pilot plant prior to the construction of the Grant
Mill.
| | --- | -------------------------------------------------------------------------------------------------------------------

We did not make a profit from our operations at the Grant Mine
during any of the above periods during which we achieved gold recoveries.

The mill has been properly secured and remains in good
condition.

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In June of 1990, ACNC (American Copper and Nickel Company )
entered into a joint venture with us on the Grant Mine claims and a larger area
of Ester Dome. This included the Dobbs, and St Paul / Barelka properties.

On the Grant Mine property, ACNC completed the drilling of 10
diamond drill holes and fourteen wedge cuts on the ODea  Irishman system
totalling 10,097. This work confirmed the previous drilling by Silverado and
helped to further define the ODea structure.

b. St. Paul / Barelka

The St. Paul / Barelka claims have undergone a significant
amount of exploration since the early 1980s when they were first acquired by
us. The early work was in the form of electro-magnetic surveys, geochemical soil
sampling, trenching and diamond and percussion drilling. Most recently in 1991
-1992, ACNC completed 9 diamond drill holes and 3 rotary reverse circulation
holes. Subsequent work in 1996-1997 amounted to over 10,000 of trenching and 91
drill holes focusing on the St Paul structure indicated by previous work.

c. Dobbs

The Dobbs property contains the Ethel  Elmes vein system and
structure which had been located in the first work and prospecting that took
place on Ester Dome in the early 1900s. Exploration in the 1980s by us
revealed a mineralized shear zone up to 25 wide containing high grade quartz
veins and veinlets. This was the structure mined in 1987  1989 which generated
approximately 71,620 tons of gold bearing material. Combined with the previously
mined stockpile from the ODea vein, (11,000 tons), a total of approximately
82,620 tons were milled during 1988  1989 producing 7,362 oz. of gold.

4. Present Condition of the Property and Current State of
Exploration

(a) Grant Mine-ODea Vein:

The Grant Mine operations, including camp, buildings, machine
shops and related equipment, were constructed in the late 1980s. Our mill and
equipment are in operating condition but are not currently operating. The mill
has remained inactive since February 1989. The plant and equipment cost us
$2,076,780. This amount has been written down to $nil on our audited financial
statements. Power to the Grant Mine operations is provided by diesel powered
generators located on site. Commercial power transmission lines cross through
the property, and will provide power to the facilities for any future
operations. Auxiliary power to the Grant Mine operations will be provided by
diesel powered generators located on site.

During fiscal 2005, our work on the property was limited to
assessment work, reclamation and minimal research and development activities for
converting the Grant Mine mill into a testing facility for producing
low-rank-coal-water fuel. We plan to maintain claim rental payments for the
current fiscal year and to continue with reclamation and assessment work.

If gold prices remain strong, we may re-commence exploratory
drilling on our Ester Dome properties with the objective of increasing our
database of geological information on these properties.

During 2006, our reclamation work will continue. We will
utilize our heavy equipment as available from our Nolan Project and anticipate
doing most of our work during August and September of 2006.

(b) May (St. Paul) / Barelka:

The St. Paul property is undeveloped and does not contain any
open-pit or underground mines. There is no plant or equipment located on the St.
Paul property. Currently, there is no power supply to the St. Paul property.

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We have no plans at this time to do any work other than as
required for annual claims maintenance and when we do there is no guarantee the
work will present economic viability for this deposit.

(c) Dobbs:

The Dobbs property is undeveloped and does not contain any
open-pit or underground mines. There is no plant or equipment located on the
Dobbs property. Currently, there is no power supply to the Dobbs property.

We have no plans at this time to do any work other than as
required for annual claims maintenance.

5. Geology

The Fairbanks Mining District is in the northwest part of the
Yukon  Tanana metamorphic complex. This region, referred to variably as Yukon
Crystalline Terrain, Yukon Cataclastic Complex or Yukon Tanana Terrain is an
enormous tract of multiple deformed and metamorphosed rocks occupying much of
east central Alaska and adjoining Yukon Territory.

The Fairbanks District is underlain by three metamorphosed
stratigraphic packages all in apparent thrust fault contact. From oldest to
youngest these are: (1) Chatanika Terrain, a Precambrian
eclogite-garnet-amphibolite unit exposed on the northern edge of the district;
(2) Fairbanks Schist, a dominant lithology and host to the majority of gold
occurrences in the district, comprised of late Proterozoic to early Paleozoic
sedimentary and volcanic rocks metamorphosed to greenschist facies; and (3)
Chena River Sequence, an early to mid Paleozoic unit metamorphosed to lower
amphibolite facies.

Stocks and dikes are common in the Fairbanks District, varying
from diorite to granite. In recent years they have been conclusively linked to
significant gold mineralizing systems. Mid Cretaceous ages have been determined
for two of the stocks. Lamprophyre dikes are locally present in the
district.

The Ester Dome property is underlain by late Proterozoic to
early Paleozoic sedimentary and volcanic rocks that have been metamorphosed to
greenschist facies. Dominant lithologies are quartz-mica schist, graphitic
phyllite and micaceous quartzite, with lesser chlorite schist and calcareous
schist. The schists are locally intruded by fine grained granitic to dioritic
dikes and sills with minor porphyritic phases.

Four main structural patterns that crosscut stratigraphy and
folding are present on Ester Dome. The most prominent is northeast trending
shearing that is probably related to northeast thrusting in the region. Most of
the past and present exploration has taken place along mineralized veins and
shears parallel to this trend.

6. Estimates of Indicated and Inferred Resources

We have not established any commercially viable reserves on any
of our properties that comprise the Ester Dome Project.

A.GRANT MINE - ODEA STRUCTURE

The determinations of indicated resources at the Grant Mine -
ODea Structure in the BC Technical Report are summarized as follows:

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.

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INDICATED
    RESOURCE
    ESTIMATEBLOCK
    SQ. FEET
    WIDTH FEET
    TONS
    GRADE OZ /TONCORE
    305,620
    10.9
    266,500
    0.31


B.DOBBS ( ETHEL  ELMES)

The determinations of inferred resources at the Dobbs
(Ethel-Elmes) property are summarized in the BC Technical Report as follows:

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

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 it. Inferred resources have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. U.S.
investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.

INFERRED
    RESOURCE
    ESTIMATEBLOCK
    SQ. FEET
    WIDTH FEET
    TONS
    GRADE OZ/TONUNDER ELMES PIT
    102,270
    11
    90,000
    0.05UNDER ETHEL PIT
    102,270
    11
    90,000
    0.05TOTAL
    
    
    180,000
    0.05


C.ST. PAUL

The determinations of inferred resources at the St. Paul
property are summarized in the BC Technical Report as follows:

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.

INDICATED
      RESOURCE
      ESTIMATEBLOCK
      SQ. FEET
      WIDTH FEET
      TONS
      GRADE 
        OZ/TONDRILLED OFF
      62,500
      40
      200,000
      0.08


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

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 it. Inferred resources have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. U.S.
investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.

INFERRED
    RESOURCE
    ESTIMATEBLOCK
    SQ. FEET
    WIDTH FEET
    TONS
    GRADE OZ/TONBELOW INDICATED
      24,062
    40
    77,000
    0.08


Mr. Murton recommended that, when funds become available,
Silverado reassess the voluminous data base available on the properties before
planning future work. Mr. Murton concluded that the Ester Dome property does
have merit and warrants additional work.

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EAGLE CREEK PROPERTY

1. Location and Access

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.

A map illustrating the location and access to the Eagle Creek
property is provided below:



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2. Ownership Interest

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 until Sept.1, 2006. There has been no legal survey on the
claims.

Ownership of the claims is in the name as Silverado Green Fuel.
There is an option to purchase agreement with Arley Taylor (now with his
descendants ), to purchase a 100% interest in the property for $400,000 of which
$68,000 remains to be paid. The amount of $5,000 per year is required to be paid
to keep the agreement in good standing. The original option agreement with A.
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)

As of November 30, 2005, we completed option payments on the
Eagle Creek property in the amount of $5,000 and, as a result of this payment
all of our mineral claims and options are in good standing.

On August 4, 1989, we assigned the Eagle Creek Property to
Can-Ex Resources (U.S.), Inc. (Can-Ex) for a 15% net profits interest to a
maximum of $5,000,000. Can-Ex changed its corporate name to Kintana Resources
Ltd. and was subsequently dissolved. Under the terms of the assignment
agreement, the rights to the Eagle Creek property reverted to us as a result of
the dissolution. Accordingly, we have taken steps to maintain the Eagle Creek
property.

3. History of Operations

Earliest work on the property started approximately in 1913,
with the original owner exploring for antimony. A number of companies have
explored the property from 1964 to the present.

During the early 1980s, geochemical surveys located anomalous
gold and antimony targets. Drilling conducted on the property during 1991 and
1992 resulted in the outlining definition of gold mineralization hosted in
intrusive rocks. Further in-fill drilling is necessary to determine continuity
of the gold bearing sequence, and to ascertain grades of gold within the
deposit. We will consider doing additional work on the gold-antimony bearing
veins upon which the property was founded.

4. Present Condition of the Property and Current State of
Exploration

We did not complete any exploration activity on the Eagle Creek
property during 2005 other than assessment work and maintenance, and none is
planned for 2006. However, extensive exploration drilling has shown gold
mineralization throughout the property. Exploration of the Eagle Creek property
is currently in the preliminary stages.

The Eagle Creek property is undeveloped and does not contain
any open-pit or underground mines. There is no plant or equipment located on the
Eagle Creek property. Currently, there is no power supply to the Eagle Creek
property, although GVEA power transmission lines run through the property and
could supply power in the event a facility is warranted for ore processing in
the future. Surface exploration work, including geochemical and geophysical
surveys is recommended to be continued as a means of tracing promising mineral
bearing rock units. Drilling is recommended to test the subsurface continuity
and gold content of the rock units.

5. Geology

The Eagle Creek property is located within the same regional
geology as the Ester Dome property.

The Eagle Creek property is 90% underlain by late Proterozoic
to early Paleozoic sedimentary and volcanic rocks that have been metamorphosed
to greenschist facies. Dominant lithologies are quartz mica schist, micaceous
quartzite, graphitic phyllite and chlorite schist, with lesser calc-schist,
feldspathic schist, graphitic schist and minor quartz sericite schist.

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The remaining 10% of the property is underlain by felsic
igneous rocks which intrude the schists in all sectors of the property.
Compositions range from biotite quartz monzonite to muscovite granite.
Porphyritic phases with quartz and feldspar phenocrysts are ubiquitous. Contact
relations observed from mapped distribution of granitic rock fragments in soil
and from diamond drill core indicate the intrusives are dikes and sills up to
200 thick.

6. Estimates of Indicated and Inferred Resources

The BC Technical Report concluded that there are no mineral
resources or mineral reserves on the Eagle Creek property.

FEDERAL CLAIM MAINTENANCE FEES AND STATE CLAIM
RENTALS

We pay federal claim maintenance fees for each of our federal
mineral claims that are owned by us or are held by us under a purchase or lease
agreement. An annual fee of $100 per claim is payable by us to the Bureau of
Land Management for each claim. We paid aggregate annual federal claim
maintenance fees of $41,120 during fiscal 2004, $39,500 during fiscal 2005 and
anticipate a similar amount will be due for fiscal 2006.

We pay Alaska state claim rentals for each of our state claims
that are owned by us or are held by us under a purchase or lease agreement. An
annual fee of $55 or $130 per claim is payable by us to the Alaska Department of
Revenue for each claim. We paid aggregate Alaska state claim rental fees of
$15,945 during fiscal 2004 and 2005 and anticipate a similar amount will be due
for fiscal 2006.

GLOSSARY OF TERMS

The definitions of geological and technical terms used in this
Annual Report on Form 10-KSB are provided below:

|Amphibolite Facies  | An assemblage of minerals formed under medium to high
      pressure during regional metamorphism                               
|------------------- | --------------------------------------------------------------------------------------------------------------------------------
|
|                    |                                                                                                                                 
|Arsenopyrite        | Mineral composed of iron, arsenic and sulphur.                                                                                  
|                    |                                                                                                                                 
|Auriferous          | Containing gold.                                                                                                                
|                    |                                                                                                                                 
|Bedrock             | Rock units which underlie unconsolidated surface
      overburden or soils.                                                     
|                    |                                                                                                                                 
|Brecciated          | Rock composed of angular fragments held together in a
      matrix.                                                             
|                    |                                                                                                                                 
|Calcareous Schist   | A laminated metamorphic rock containing calcium
      carbonate.                                                                
|                    |                                                                                                                                 
|Chlorite Schist     | A laminated metamorphic rock containing prominent
      chlorite, which is a hydrated silicate of aluminium, iron and magnesium.
|                    |                                                                                                                                 
|Chloritic Quartzite | A metamorphic rock composed primarily of quartz (silicon
      dioxide) with minor chlorite (see previous entry).               
|                    |                                                                                                                                 
|Dikes               | A tabular intrusive body of rock with a vertical or near
      vertical orientation.                                            
|                    |                                                                                                                                 
|Diorite             | A body of intrusive rock composed of feldspars, amphibole
      and a small amount of quartz.                                   

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|Dioritic Dikes                                   | See dikes. See diorite.                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Dominant Lithology                               | In a given area, the rock type occurring at the highest
      percentage.                                                                                                                                                                                                                                                                                                                     
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Drilling                                         | The process of boring a hole in the rock to obtain a
      sample for determination of metal content. Diamond Drilling involves the
      use of a hollow bit with diamonds on the cutting surface to recover a
      cylindrical core of rock. Reverse Circulation Drilling involves chips of
      rock being forced back through the center of the drill pipe using air or
      water.
|
|
|
|
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Exploration                                      | The process of using prospecting, geological mapping,
      geochemical and geophysical surveys, drilling, sampling and other means to
      detect and perform initial evaluations of mineral deposits.                                                                                                                                                                                      
|
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Fairbanks Schist                                 | A grouping of metasedimentary rocks which underlie much
      of the Fairbanks District.                                                                                                                                                                                                                                                                                                      
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Federal Lode Claims, Federal Placer
      Claims | Mineral claims up to 20 acres, located on federal land
      under the U.S. Exploration Law of 1872. See below for definitions of
      Lode and Placer.                                                                                                                                                                                                                                  
|
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Felsic                                           | A mnemonic adjective derived from (fe) for feldspar. (l)
      for feldpathoids and (s) for silica and is applied to light-colored rocks
      containing an abundance of one or all of these constituents.                                                                                                                                                                                   
|
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Geochemical Survey                               | Sample of soil, rock, silt, water or vegetation analyzed
      to detect the presence of valuable metals or other metals which may
      accompany them. E.g., Arsenic may indicate the presence of gold.                                                                                                                                                                                     
|
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Geophysical Survey                               | Electrical, magnetic and other means used to detect
      features, which may be associated with mineral deposits.                                                                                                                                                                                                                                                                            
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Gold Deposit                                     | A concentration of gold in rock sufficient to be of
      economic interest.                                                                                                                                                                                                                                                                                                                  
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Granite                                          | An intrusive rock which includes feldspar, mica and
      quartz.                                                                                                                                                                                                                                                                                                                             
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Graphitic Phyllite                               | Metamorphic rock intermediate between slate and schist,
      and containing graphite (carbon).                                                                                                                                                                                                                                                                                               
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Greenschist Facies                               | An assemblage of minerals formed under low to medium
      pressure during regional metamorphism.                                                                                                                                                                                                                                                                                             
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Host Rocks                                       | A term used for a rock unit which, as a result of
      favorable structural or chemical characteristics, provides an environment
      for precipitation or deposition of metals or other foreign materials.                                                                                                                                                                                 
|
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Lode Source                                      | The lode mineral deposit from which placer minerals have
      been derived by erosion.                                                                                                                                                                                                                                                                                                       
|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Lode                                             | Mineral in place in the host rock, as in lode gold.                                                                                                                                                                                                                                                                                                                                         
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                               
|Metamorphic Complex                              | A grouping of metamorphic rocks which have complicated
      structural relationships.                                                                                                                                                                                                                                                                                                        
|

- 35 -

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|Metamorphism        | Processes, including pressure, heat and introduction of
      new chemical substances, by which consolidated rocks are changed from one
      form to another.                                                                                                                                                                                                                                                                                                                      
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Metasedimentary     | Partially metamorphosed sedimentary rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Metasiltsone        | A rock formed from consolidated silt, which has been
      partially changed to schist.                                                                                                                                                                                                                                                                                                                                                                                             
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Micaceous Quartzite | A metamorphic rock, mostly quartz with minor mica.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Micaceous           | Containing mica, usually referring to metamorphic rocks.                                                                                                                                                                                                                                                                                                                                                                                                                            
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mineral Claims      | General term used to describe the manner of land
      acquisition under which the right to explore, develop and extract metals
      is established.                                                                                                                                                                                                                                                                                                                               
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mineral reserve     | Securities and Exchange Commission Industry Guide 7
      Description of Property by Issuers Engaged or to be Engaged in
      Significant Mining Operationsof the Securities and Exchange
      Commission defines a reserve as that part of a mineral deposit which
      could be economically and legally extracted or produced at the time of the
      reserve determination. Reserves consist of:                                                                          
|
|
|
|
|
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    | (1) Proven (Measured) Reserves.Reserves for
      which: (a) quantity is computed from dimensions revealed in outcrops,
      trenches, workings or drill holes; grade and/or quality are computed from
      the results of detailed sampling; and (b) the sites for inspection,
      sampling and measurement are spaced so closely and the geologic character
      is so well defined that size, shape, depth and mineral content of reserves
      are well-established.      
|
|
|
|
|
|
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    | (2) Probable (Indicated) Reserves.Reserves for
      which quantity and grade and/or quality are computed from information
      similar to that used for proven (measured) reserves, but the sites for
      inspection, sampling and measurement are farther apart or are otherwise
      less adequately spaced. The degree of assurance, although lower than that
      for proven (measured) reserves, is high enough to assume continuity
      between points of observation.
|
|
|
|
|
|

- 36 -

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|Mineral resource | National Instrument 43-101 Standards of Disclosure for
      Mineral Projectsof the Canadian Securities Administrators
      defines a Mineral Resource as a concentration or occurrence of natural,
      solid, inorganic or fossilized organic material in or on the Earths crust
      in such form and quantity and of such a grade or quality that it has
      reasonable prospects for economic extraction. The location, quantity,
      grade, geological characteristics and continuity of a mineral resource are
      known, estimated or interpreted from specific geological evidence and
      knowledge.                                                                                                                                                               
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|
|
|
|
|
|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 | Mineral Resources are sub-divided, in order of increasing
      geological confidence, into Inferred, Indicated and Measured categories.
      An Inferred Mineral Resource has a lower level of confidence than that
      applied to an Indicated Mineral Resource. An Indicated Mineral Resource
      has a higher level of confidence than an Inferred Mineral Resource but has
      a lower level of confidence than a Measured Mineral Resource.                                                                                                                                                                                                                                                                                                                                   
|
|
|
|
|
|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 | (1) Inferred Mineral Resource.An Inferred
      Mineral Resource is that part of a Mineral Resource for which quantity
      and grade or quality can be estimated on the basis of geological evidence
      and limited sampling and reasonably assumed, but not verified, geological
      and grade continuity. The estimate is based on limited information and
      sampling gathered through appropriate techniques from locations such as
      outcrops, trenches, pits, workings and drill holes.                                                                                                                                                                                                                                                                              
|
|
|
|
|
|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 | (2) Indicated Mineral Resource.An Indicated
      Mineral Resource is that part of a Mineral Resource for which quantity,
      grade or quality, densities, shape and physical characteristics can be
      estimated with a level of confidence sufficient to allow the appropriate
      application of technical and economic parameters, to support mine planning
      and evaluation of the economic viability of the deposit. The estimate is
      based on detailed and reliable exploration and testing information
      gathered through appropriate techniques from locations such as outcrops,
      trenches, pits, workings and drill holes that are spaced closely enough
      for geological and grade continuity to be reasonably assumed.                          
|
|
|
|
|
|
|
|
|
|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 | (3) Measured Mineral Resource.A Measured Mineral
      Resource is that part of a Mineral Resource for which quantity, grade or
      quality, densities, shape, physical characteristics are so well
      established that they can be estimated with confidence sufficient to allow
      the appropriate application of technical and economic parameters, to
      support production planning and evaluation of the economic viability of
      the deposit. The estimate is based on detailed and reliable exploration,
      sampling and testing information gathered through appropriate techniques
      from locations such as outcrops, trenches, pits, workings and drill holes
      that are spaced closely enough to confirm both geological and grade
      continuity.
|
|
|
|
|
|
|
|
|
|
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 | Industry Guide 7  Description of Property by Issuers
      Engaged or to be Engaged in Significant Mining Operationsof
      the Securities and Exchange Commission does not define or recognize
      resources. As                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
|

- 37 -

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|                   | used in this Annual Report on Form 10-KSB, resources
      are as defined in National Instrument 43-101.                                                         
|------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|                   |                                                                                                                                                                    
|Muscovite          | A light coloured mica.                                                                                                                                             
|                   |                                                                                                                                                                    
|Phyllite           | An argillaceous rock intermediate between slate and
      schist.                                                                                                  
|                   |                                                                                                                                                                    
|Placer             | Mineral, which has been separated from its host rock by
      natural processes and is often reconcentrated in streams as placer
      deposits or placer gold.
|
|
|                   |                                                                                                                                                                    
|Porphyritic Phases | Areas of rock in which one or more minerals occur as
      larger crystals in a relatively finer groundmass.                                                       
|                   |                                                                                                                                                                    
|Pyrite             | A mineral containing iron and sulphur.                                                                                                                             
|                   |                                                                                                                                                                    
|Quartzite          | A metamorphic rock composed mostly of quartz (silicon
      dioxide)                                                                                               
|                   |                                                                                                                                                                    
|Quartz-Mica Schist | A laminated metamorphic rock with roughly equal quartz
      and mica.                                                                                             
|                   |                                                                                                                                                                    
|Resistivity Low    | In geophysical surveying, an area with higher
      electromagnetic conductivity than the surrounding area.                                                        
|                   |                                                                                                                                                                    
|Schist             | Flat plate-like metamorphic rock formations, which
      contain primarily mica.                                                                                   
|                   |                                                                                                                                                                    
|Slate              | A metamorphosed mudstone.                                                                                                                                          
|                   |                                                                                                                                                                    
|State Claims       | Mineral claims up to 40 acres, located on State of Alaska
      lands.                                                                                             

- 38 -

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|Stibnite             | A mineral composed of antimony and sulphur.                              
|-------------------- | -------------------------------------------------------------------------
|                     |                                                                          
|Stocks               | Small intrusive bodies of rock.                                          
|                     |                                                                          
|Thrust Fault Contact | One rock type pushed over top of another at a
      relatively low angle.

- 39 -

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ITEM 3.     LEGAL
PROCEEDINGS.

We currently are not a party to any material legal proceedings
and to our knowledge, no such proceedings are threatened or contemplated.

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

No matters were submitted to a vote of our security holders,
through the solicitation of proxies or otherwise, during our fourth quarter
ended November 30, 2005.

PART II

ITEM 5.     MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

Our common shares are quoted on the OTC Bulletin Board under
the symbol SLGLF, on the Berlin Stock Exchange under the symbol SLGL and on the
Frankfurt Stock Exchange under the symbol SLGL. The following table indicates
the high and low bid prices of our common shares during the periods
indicated:

OTCBB:

QUARTER ENDED
    HIGH BID
    LOW BIDFeb 29, 2004
    $0.15
    $0.12May 31, 2004
    $0.13
    $0.10Aug 31, 2004
    $0.06
    $0.06Nov 30, 2004
    $0.07
    $0.06Feb 28, 2005
    $0.09
    $0.05May 31, 2005
    $0.07
    $0.03Aug 31, 2005
    $0.07
    $0.03Nov 30, 2005
    $0.07
    $0.04


BERLIN:

QUARTER ENDED
    HIGH BID
    LOW BIDFeb 29, 2004
    $0.12
    $0.10May 31, 2004
    $0.09
    $0.09Aug 31, 2004
    $0.06
    $0.04Nov 30, 2004
    $0.05
    $0.05Feb 28, 2005
    $0.07
    $0.03May 31, 2005
    $0.05
    $0.03Aug 31, 2005
    $0.05
    $0.03Nov 30, 2005
    $0.06
    $0.03


FRANKFURT:

QUARTER ENDED
    HIGH BID
    LOW BIDFeb 29, 2004
    $0.11
    $0.10May 31, 2004
    $0.10
    $0.09Aug 31, 2004
    $0.05
    $0.05


- 40 -

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Nov 30, 2004
    $0.05
    $0.05Feb 28, 2005
    $0.07
    $0.04May 31, 2005
    $0.05
    $0.03Aug 31, 2005
    $0.05
    $0.03Nov 30, 2005
    $0.06
    $0.03


The source of the high and low bid information is the NASD OTC
Bulletin Board. The market quotations provided reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not represent actual
transactions.

HOLDERS OF COMMON SHARES

As at February 22, 2006, we had 438,672,479 common shares
issued and outstanding that were held by approximately 3,803 registered
holders.

DIVIDENDS

We have not declared any dividends on our common stock in the
two most recent fiscal years.

We are restricted in our ability to pay dividends by
limitations under British Columbia law relating to the sufficiency of profits
from which dividends may be paid. In addition, Silverado's Articles (the
equivalent of the Bylaws of a United States corporation) provide that no
dividend shall be paid otherwise than out of funds or assets properly available
for the payment of dividends and declaration by the directors as to the amount
of such funds or assets available for dividends shall be conclusive.

RECENT SALES OF UNREGISTERED SECURITIES

We have reported sales of securities without registration under
the Securities Act of 1933 during our fiscal year ended November 30, 2005 on the
following Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K that
we have filed with the Securities and Exchange Commission.

Report
    Date of Filing with SECQuarterly Report on Form 10-QSB for the three
      months ended February 28, 2005
    April 19, 2005Current Report on Form 8-K
    July 1, 2005Quarterly Report on Form 10-QSB for the six
      months ended May 31, 2005
    July 15, 2005Current Report on Form 8-K
    August 24, 2005Quarterly Report on Form 10-QSB for the nine
      months ended August 31, 2005
    October 14, 2005Current Report on Form 8-K
    November 28, 2005Current Report on Form 8-K
    January 19, 2006


We have not completed any sales of securities without
registration pursuant to the Securities Act of 1933 during the fiscal year ended
November 30, 2005 that were not reported on the Quarterly Reports on Form 10-QSB
and Current Reports on Form 8-K described above.

- 41 -

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ITEM 6.     MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION.

PLAN OF OPERATIONS

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

The Nolan Gold Project

We are continuing our exploration program on the Nolan Gold
Project. The objective of this geological exploration program is to further
define gold deposits in order to provide a basis for the assessment of the
feasibility of future additional exploration activities, including test mining
activities, at the Nolan Gold Project. We plan to conduct further exploration of
the Nolan Placer and Nolan Lode properties within the Nolan Gold Project. Our
planned geological exploration program is described in detail in the section of
this Annual Report on Form 10-KSB entitled Description of Properties  Nolan
Gold Project.

We plan to spend up to $2,539,000 in the next twelve months in
carrying out our exploration activities for the Nolan Gold Project. Of this
amount, we anticipate approximately $759,000 will be spent on test mining
activities, with the balance of $1,000,000 being spent on other exploration
activities, including the drilling program on the Marys Bench East deposit, and
lode drilling and trenching on the Solomons Shear. The actual amount that we
spend on exploration will depend on the actual amount of funds that we have
available for exploration. We are presently seeking sufficient financing to
enable us to proceed with these plans and will require additional financing
within the next three months if we are able to proceed with our exploration
plans, including test mining activities, and process gravel for gold recovery
during the summer of 2006. Further, while the amount of exploration expenditures
may be off-set by any recoveries from sales of gold that we may achieve from
test mining activities, we anticipate that these recoveries will not exceed our
costs of exploration. Further, there is no assurance at this time that we will
achieve any recoveries from sales of gold. See the discussion of our cash
resources and working capital under Liquidity and Financial Condition below and
in the section entitled Risk Factors.

Our plan of operations at the Nolan Gold Project will be
continually evaluated and modified as exploration and gold recovery results
become available. Modifications to our plans will be based on many factors,
including: results of exploration, assessment of data, weather conditions,
exploration costs, the price of gold and available capital. Further, the extent
of our exploration programs that we undertake will be dependent upon the amount
of financing available to us.

We do not have any commercially viable reserves on any of our
properties that comprise the Nolan Gold Project or any of our other properties.
We plan to carry out exploration activities on the Nolan Gold Project that are
referred to as test mining activities. The objective of the test mining
activities on the Nolan Gold Project is to expand our knowledge and geological
data of the mineralization of the placer deposits on the Nolan Gold Project and
to recover gold from test mining activities in order to pay for a portion of the
expense associated with exploration of the Nolan Gold Project. As we have not
established commercially viable reserves on the Nolan Gold Project, we
anticipate that recoveries of gold from test mining activities will not be
sufficient to pay for the full cost of exploration. There is no assurance that
our test mining activities will result in a final evaluation that a commercially
viable mineral deposit exists on any of our mineral properties that comprise the
Nolan Gold Project.

Low-Rank Coal-Water Fuel Project

We anticipate spending approximately $300,000 during the
current fiscal year on our work to seek funding from the United States federal
governments and state governments in connection with establishment of the
demonstration facility at the Grant Mill. We will also pursue financing for this
project from private sources. There is no assurance that any financing will be
obtained from either government of private sources to fund this project.

- 42 -

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RESULTS OF OPERATIONS

References in the discussion below to 2005 are to our fiscal
year ended November 30, 2005. Similarly, references to 2004 are to our fiscal
year ended November 30, 2004. References to 2006 are to our current fiscal year
that will end November 30, 2006.

Year ended November 30, 2005 compared to the year ended
November 30, 2004.

Revenues

We did not earn revenues during 2005 or 2004 as we did not
achieve commercial production of gold from the Nolan Gold Project during this
period.

We sold gold nuggets on hand for proceeds of $22,633 during
2005. The gold sold was recovered during previous recovery operations at the
Nolan Gold Project. Under our accounting policies, these gold sales were treated
as recoveries received incidental to exploration activities on the Nolan Gold
Project as we are in the exploration stage. Due to this accounting treatment,
gold sales were offset against exploration costs associated with the Nolan Gold
Project.

Subject to achieving the necessary financing, we plan to
continue test mining activities with gold recovery activities to follow in the
summer of 2006. Due to our financial condition, there is no assurance that we
will be able to continue further test mining activities during 2006. There is no
assurance that we will be able to process any gold bearing gravel material for
gold recovery during the 2006 summer season. Any recoveries from gold sales are
not anticipated to be realized until the third quarter of 2006, at the earliest.
We cannot provide investors with any assurance as to sales of gold during fiscal
2006 due to the uncertainties of our test mining activities and our financial
condition. See Risk Factors.

We anticipate that we will not realize revenues during the
current fiscal year from the low-rank coal-water fuel component of our plan of
operations. We will not be able to realize revenues from this business until we
are able to proceed with the construction and operation of a commercial-scale
demonstration facility for the low-rank coal-water fuel technology. There is no
assurance that we will be able to secure the financing necessary to proceed with
construction of this demonstration facility or that the demonstration facility
will prove the commercial viability of the process. See Item 1  Description of
Business and Risk Factors.

Operating Costs

We did not incur any operating costs during the years ended
November 30, 2005 and November 30, 2004 due to the fact that we did not achieve
production from exploration activities during either year.

Expenses

Our expenses decreased to $3,407,186 for 2005 compared to
$4,923,572 for 2004, representing a decrease of $1,516,386 or 31%. The decrease
in expenses was primarily attributable to decreases in our consulting and
exploration expenses during 2005 as we engaged fewer consultants and did not
start test mining exploration on the Nolan Gold Project until the fourth quarter
of 2005. We anticipate that our expenses will increase in 2006 due to the fact
that we have commenced test mining activities on the Swede Channel.

Our decreased activity on our mineral properties in 2005 resulted
  in a decrease to our exploration expenses to $746,196 for 2005 compared to $1,395,078
  for 2004, representing an decrease of $648,882 or 47%. The decrease in exploration
  expenses was attributable to decreased exploration activities at the Nolan Gold
  Project during 2005. Our exploration activities in 2005 included extensive review
  of past exploration projects on our Nolan property and test mining the Nolan
  Swede Channel. Exploration activities in 2004 included drilling and exploration
  activities on the Fay and Nolan Creek confluence, Marys Bench, and Treasure
  Chest areas. These expenses have declined for 2005 compared to 2004 as limited
  exploration activity was initiated until test mining targets were established
  on the Swede Channel portion of our Nolan Gold Project. Again, we anticipate
  that exploration expenses will increase in 2006 as a result of test mining activities
  on the Swede Channel.

- 43 -

---

Office expenses increased to $499,726 for 2005 compared to $331,621
  for 2004, representing an increase of $168,105 or 51%. The overall increase
  during 2005 is attributable to higher travel and accommodation and insurance
  costs for the year.

Consulting fees decreased to $362,272 for 2005 compared to
$1,150,904 for 2004, representing a decrease of $788,632 or 69%. The decrease is
attributable to our having fewer consultants in 2005 and our having less
consulting expenses in connection with our efforts to obtain government funding
for our planned low-rank coal water fuel technology project.

Management services related to the activities of the Tri-Con
Group decreased to $653,010 for 2005 compared to $860,518 for 2004 due to
decreased exploration activity.

Research activities attributable to the low-rank coal water
fuel technology increased to $120,293 for 2005 compared to $79,967 for 2004,
representing an increase in the amount of $40,326 or 50%. Research activities
were primarily in connection with the compensation and related expenditures of
Dr. Warrack Willson.

Loss

Our loss decreased to $3,394,107 for 2005 compared to
$4,836,363 for 2004, representing a decrease of $1,442,256 or 30%. This decrease
in our loss was primarily attributable to the decrease in our consulting and
exploration expenses, as discussed above. We anticipate that we will continue to
incur a loss until such time as we can commence the development stage of our
operations and achieve significant revenues from sales of gold recovered from
the Nolan Gold Project. There is no assurance that we will commence the
development stage of our operations at the Nolan Gold Project or achieve
revenues.

LIQUIDITY AND CAPITAL RESOURCES

Cash and Working Capital

We had cash of $408,589 as of November 30, 2005, compared to
cash of $12,828 as of November 30, 2004. We had a working capital deficiency of
$855,147 as of November 30, 2005, compared to a working capital deficiency of
$648,023 as of November 30, 2004.

We will require additional financing during the current fiscal
year due to our current working capital deficiency, our plan of operations for
the Nolan Gold Project, our planned exploration activities and our plan to
continue to pursue financing through U.S. and state government programs and
initiatives as well as private sources. We plan to spend approximately
$2,539,000 in the next twelve months to carry out exploration and administration
activities for the Nolan Gold Project. We anticipate spending approximately
$300,000 during the next twelve months on our work to seek funding in connection
with establishment of the demonstration facility at the Grant Mill. We presently
do not have sufficient financing to enable us to proceed with these plans and
will require additional financing within the next three months if we are able to
proceed with our exploration plans, including test mining activities, and
process gravel for gold recovery during the summer of 2006. Our actual
expenditures on these activities will depend on the actual amount of funds that
we have available as a result of our financing efforts. There is no assurance
that we will be able to raise the necessary financing. See Risk Factors.

Cash Used in Operating Activities

Cash used in operating activities decreased to $2,361,385 for
  2005, compared to $3,432,346 for 2004. We funded the cash used in operating
  activities primarily through equity sales of our common shares.

- 44 -

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Investing Activities

We realized cash of $145,888 from investing activities during
  2005 compared to cash of $94,859 used in investing activities during 2004. Cash
  from investing activities during 2005 and 2004 was primarily comprised of cash
  from disposal of equipment.

Financing Activities

Cash provided by financing activities decreased to $2,611,258
for 2005, compared to $2,953,025 for 2004. All cash provided by financing
activities was provided by share and share purchase warrant issuances. Cash
provided by financing activities was used to fund our operating and investing
activities. Equity financings were completed with private purchasers at prices
that were reflective of the market price of our common shares as of the date of
the financing.

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing shareholders. We do
not have any arrangements in place for further sales of our equity
securities.

Capital Leases

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

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

As at November 30, 2005, the total amount outstanding under two
lease purchase agreements was $722,149. We are required to maintain the
equipment in good working order and are also required to maintain adequate
insurance on the equipment. We are required to complete future lease payments,
including interest, of $778,576 during the 2006 fiscal year.

Tri-Con Group

We are in arrears $70,282 to the Tri-Con Group as of November
30, 2005 in connection with planned exploration activities to be carried out on
the Nolan Gold Project during fiscal 2006. These activities will be carried out
by the Tri-Con Group on behalf of us in accordance with our operating agreements
with the Tri-Con Group. See Item 12  Certain Relationships and Related
Transactions.

Convertible Debt

The amount of our convertible debt outstanding was $176,652 as
of November 30, 2005 and 2004. Included in this amount is a convertible
debenture in the amount of $140,000 which is in default and has accrued interest
of $87,227. It is unclear as to whether this amount will ever be converted into
common shares.

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

Mineral Properties

As of November 30, 2005, we were in arrears of required mineral
property claims and option payments of $400,000 in respect of our Hammond
Property and therefore the rights to the property were adversely affected.
However, we are currently in the process of re-negotiating the terms and
conditions of the Agreement with the property owner. The property owner has
confirmed that our mineral claims and

- 45 -

---

options are in good standing on the understanding we will use
our best efforts to pay the minimum royalty payments, including the payments
that are in arrears for the past four years, when business conditions permit.
There is however no assurance that we will be able to re-negotiate this
agreement.

Low-Rank Coal-Water Fuel Business

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

Future Financings

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

Restatement

Our consolidated financial statements for the year ended
November 30, 2004 have been restated to give effect to the write-off of
exploration and development advances previously capitalized. Please refer to
Note 17 of our audited financial statements for the year ended November 30, 2005
for a summary of the impact of this restatement on our results of operations for
2004.

Going Concern

Our financial statements have been prepared on a going concern
basis, which assumes the realization of assets and settlement of liabilities in
the normal course of business. Our ability to continue as a going concern is
dependent upon our ability to generate profitable operations in the future and/
or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they become due. The
outcome of these matters cannot be predicted with any certainty at this time and
raise substantial doubt that we will be able to continue as a going concern. Our
financial statements do not include any adjustments to the amount and
classification of assets and liabilities that may be necessary should we be
unable to continue as a going concern.

We plan to continue raising capital through private placements
and warrant issues, although there is no assurance that any additional private
placement financings will be achieved. In addition, we are exploring other
business opportunities including the development of low-rank coal-water fuel as
replacement fuel for oil fired industrial boilers and utility generators.

CRITICAL ACCOUNTING POLICIES

Exploration Stage Company

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

- 46 -

---

Mineral Claim Payments and Exploration Costs

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

AssetRetirement Obligation

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

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

Stock Based Compensation

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

TABLE OF CONTRACTUAL OBLIGATIONS

Our known contractual obligations as of November 30, 2005,
being the end of our last fiscal year, were as follows:

Payment due by periodType of Contractual Obligation
    Total
    Less than 1
      Year
    1 - 3 Years
    3 - 5 Years
    More than 5
      YearsLong-Term Debt ObligationsCapital (Finance) Lease Obligations
    
    778,576Operating Lease ObligationsPurchase ObligationsOther Long-Term Liabilities Reflected on the
      Company's Balance Sheet under the GAAP of the primary financial statements
    
    
    365,153
    
    174,300Total
    
    778,576
    365,153
    
    174,300


- 47 -

---

ITEM 7.     FINANCIAL
STATEMENTS.

Our audited financial statements for the year ended November
30, 2005, as set forth below, are included with this Annual Report on Form
10-KSB. Our audited financial statements are prepared on the basis of accounting
principles generally accepted in the United States and are expressed in U.S.
dollars.

PageReport of Independent Registered
          Public Accounting Firm  Berkovits, Lago & Company, LLP
      
      F-1Auditors Report 
          Amisano Hanson, Chartered Accountants
      
      F-2Consolidated Balance Sheets,
          November 30, 2005 and 2004
      
      F-3Consolidated Statements of Operations
          and other Comprehensive Income for the Years Ended November 30, 2005
          and 2004 and for the period since Recommencement of Exploration Stage,
          December 1, 2001, to November 30, 2005
      
      F-4Consolidated Statement of Stockholders
          Equity (Deficiency) for the and for the period since Recommencement
          of Exploration Stage, December 1, 2001, to November 30, 2005
      
      F-5 to F-6Consolidated Statements of Cash
          Flows for the Years Ended November 30, 2005 and 2004 and for the period
          since Recommencement of Exploration Stage, December 1, 2001, to November
          30, 2005
      
      F-7Notes to Consolidated Financial
          Statements
      
      F-8 to F-26


- 48 -

---

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2005 and 2004

(Stated in United States Dollars)



F-i

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders 
  of Silverado Gold Mines Ltd. 
  (An Exploration Stage Company)

We have audited the accompanying consolidated balance sheet of
  Silverado Gold Mines Ltd. and Subsidiary (An Exploration Stage Company) as of
  November 30, 2005, and the related consolidated statements of operations and
  other comprehensive income, stockholders deficiency, and cash flows for
  the year ended November 30, 2005. These financial statements are the responsibility
  of the companys management. Our responsibility is to express an opinion
  on these financial statements based on our audit. Our opinion on the consolidated
  statements of operations and other comprehensive income, stockholders
  deficiency, and cash flows for the period since recommencement of the exploration
  stage, December 1, 2001 to November 30, 2005 insofar as it relates to amounts
  for the prior periods through November 30, 2004 is based on the reports of other
  auditors.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. The company is not
  required to have, nor were we engaged to perform, an audit of its internal control
  over financial reporting. Our audit included consideration of internal control
  over financial reporting as a basis for designing audit procedures that are
  appropriate in the circumstances, but not for the purpose of expressing an opinion
  on the effectiveness of the companys internal control over financial reporting.
  Accordingly, we express no such opinion. An audit also includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements, assessing the accounting principles used and significant estimates
  made by management, as well as evaluating the overall financial statement presentation.
  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Silverado Gold Mines
  Ltd. and Subsidiary (An Exploration Stage Company) as of November 30, 2005,
  and the results of its operations and its cash flows for the year ended November
  30, 2005 in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1 to
  the financial statements, the Companys dependence on outside financing,
  lack of sufficient working capital, and recurring losses from activities in
  the exploration stage raise substantial doubt about the Companys ability
  to continue as a going concern. Managements plans are described in Note
  1 to the financial statements. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.

As described in Note 17 to the consolidated financial statements,
  the accompanying consolidated financial statements of Silverado Gold Mines Ltd.
  and Subsidiary as of November 30, 2004 and for the year then ended have been
  restated to reflect the proper accounting for exploration and development advances
  previously capitalized. We also audited the adjustments described in Note 17
  that were applied to restate the November 30, 2004 consolidated financial statements.
  In our opinion, such adjustments are appropriate and have been properly applied.

*/s/ Berkovits, Lago & Company, LLP*
  Fort Lauderdale, Florida 
  February 20, 2006

F-1

---

|A PARTNERSHIP of INCORPORATED PROFESSIONALS | AMISANO HANSON      
|------------------------------------------- | --------------------
|                                            | CHARTEREDACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders, 
  Silverado Gold Mines Ltd. 
  (An Exploration Stage Company)

We have audited the accompanying consolidated balance sheet of
  Silverado Gold Mines Ltd. (An Exploration Stage Company) and its subsidiary
  as of November 30, 2004 and the related consolidated statements of operations,
  cash flows and stockholders' equity (deficiency) for the year ended November
  30, 2004 and the period since recommencement of the exploration stage December
  1, 2001 to November 30, 2004. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our audit. The consolidated financial statements
  as of November 30, 2003 and for the year ended November 30, 2003 were audited
  by other auditors whose report dated January 31, 2004, except as to Note 17,
  which is as of February 3, 2005, expressed an unqualified opinion on those statements.
  Our opinion on the statements of operations, cash flows and stockholders
  equity (deficiency) for the period since recommencement of the exploration stage
  December 1, 2001 to November 30, 2004 insofar as it relates to amounts for the
  prior periods through November 30, 2003 is based on the report of other auditors.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an audit to obtain reasonable assurance
  about whether the financial statements are free of material misstatement. An
  audit includes examining on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as
  well as evaluating the overall financial statement presentation. We believe
  that our audit provides a reasonable basis for our opinion.

In our opinion, these financial statements referred to above
  present fairly, in all material respects, the financial position of Silverado
  Gold Mines Ltd. (An Exploration Stage Company) and its subsidiary as of November
  30, 2004 and the results of their operations and their cash flows for the year
  ended November 30, 2004 and the period since recommencement of the exploration
  stage December 1, 2001 to November 30, 2004, in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying financial statements referred to above have
  been prepared assuming that the Company will continue as a going concern. As
  discussed in Note 1 to the financial statements, the Company has a working capital
  deficiency, has not yet achieved profitable operations and is dependent on its
  ability to raise capital from shareholders or other sources to sustain operations.
  These factors, along with other matters as set forth in Note 1, raise substantial
  doubt that the Company will be able to continue as a going concern. The financial
  statements do not include any adjustments that might result from the outcome
  of this uncertainty.

|Vancouver, Canada | AMISANO HANSON     
|----------------- | ---------------------
|February 21, 2005 | Chartered Accountants

750 WEST PENDER STREET, SUITE 604
      TELEPHONE:    604-689-0188VANCOUVER CANADA
      FACSIMILE:       604-689-9773V6C 2T7
      E-MAIL:         
           amishan@telus.net F-2


---

SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  CONSOLIDATED BALANCE SHEETS 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)

|                                                      |   | 2005        |   |   | 2004        |  
|----------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                      |   |             |   |   | (Restated)  |  
|                                                      |   |             |   |   |             |  
|**ASSETS**                                            |  
|                                                      |   |             |   |   |             |  
|Current                                               |   |             |   |   |             |  
|Cash and cash equivalents                             | $ | 408,589     |   | $ | 12,828      |  
|Gold inventory                                        |   | 27,916      |   |   | 48,819      |  
|Amounts receivable                                    |   | 6,594       |   |   | 8,162       |  
|Prepaid expense                                       |   | -           |   |   | 122,000     |  
|                                                      |   |             |   |   |             |  
|                                                      |   | 443,099     |   |   | 191,809     |  
|Property, plant and equipment                         |   | 1,285,553   |   |   | 1,640,791   |  
|                                                      |   |             |   |   |             |  
|                                                      | $ | 1,728,652   |   | $ | 1,832,600   |  
|                                                      |   |             |   |   |             |  
|LIABILITIES                                           |  
|Current                                               |   |             |   |   |             |  
|Accounts payable and accrued liabilities              | $ | 393,058     |   | $ | 365,297     |  
|Mineral claims royalty
      payable                  |   | 400,000     |   |   | 320,000     |  
|Payable to related party                              |   | 70,282      |   |   | -           |  
|Convertible debentures,
      current portion         |   | 176,652     |   |   | 176,652     |  
|Capital lease obligation, current portion             |   | 258,254     |   |   | 510,014     |  
|                                                      |   |             |   |   |             |  
|                                                      |   | 1,298,246   |   |   | 1,371,963   |  
|Asset retirement obligation                           |   | 539,453     |   |   | 489,300     |  
|Capital lease obligations                             |   | 463,895     |   |   | 407,468     |  
|                                                      |   |             |   |   |             |  
|                                                      |   | 2,301,594   |   |   | 2,268,731   |  
|                                                      |   |             |   |   |             |  
|SHAREHOLDERS EQUITY (DEFICIT)                        |  
|Capital stock                                         |   |             |   |   |             |  
|Authorized: unlimited common shares with no par value |   |             |   |   |             |  
|Issued and outstanding:                               |   |             |   |   |             |  
|355,054,275 common shares (2004:
      224,449,587)   |   | 71,526,738  |   |   | 68,253,942  |  
|Additional paid-in capital                            |   | 466,314     |   |   | 466,314     |  
|Shares to be issued                                   |   | 54,500      |   |   | 70,000      |  
|Accumulated deficit during exploration                |   | (72,620,494 | ) |   | (69,226,387 | )
|                                                      |   |             |   |   |             |  
|                                                      |   | (572,942    | ) |   | (436,131    | )
|                                                      |   |             |   |   |             |  
|                                                      | $ | 1,728,652   |   | $ | 1,832,600   |  

APPROVED BY THE DIRECTORS:

|/s/ Garry L. Anselmo | Director |  | /s/James F. Dixon | Director
|-------------------- | -------- |  | ----------------- | --------
|Garry L. Anselmo     |          |  | James F. Dixon    |         

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATMENTS

F-3

---

SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  CONSOLIDATED STATEMENTS OF OPERATIONS & OTHER COMPREHENSIVE INCOME 
  for the years ended November 30, 2005 and 2004 
  (Stated in United States Dollars)

|                                              |   |                        |   |   |                  |   |   | Period Since         |  
|--------------------------------------------- | - | ---------------------- | - | - | ---------------- | - | - | -------------------- | -
|                                              |   |                        |   |   |                  |   |   | Recommencement Of    |  
|                                              |   |                        |   |   |                  |   |   | Exploration Stage    |  
|                                              |   | Year ended November 30 |   |   | December 1, 2001 |  
|                                              |   | 2005                   |   |   | 2004             |   |   | To November 30, 2005 |  
|                                              |   |                        |   |   | (Restated)       |   |   | (Restated)           |  
|General and Administrative Expenses           |   |                        |   |   |                  |   |   |                      |  
|Accounting and audit                          | $ | 72,294                 |   | $ | 43,725           |   | $ | 174,014              |  
|Advertising and promotion                     |   | 215,247                |   |   | 270,822          |   |   | 1,477,517            |  
|Consulting fees                               |   | 362,272                |   |   | 1,150,904        |   |   | 4,383,230            |  
|Depreciation, accretion
      and impairment  |   | 259,087                |   |   | 275,432          |   |   | 1,743,660            |  
|Exploration expenses                          |   | 746,196                |   |   | 1,395,078        |   |   | 8,627,360            |  
|Financing activities                          |   | 252,003                |   |   | -                |   |   | 252,003              |  
|Interest on convertible debentures            |   | 13,033                 |   |   | 15,074           |   |   | 673,407              |  
|Interest on capital lease
      obligations   |   | 56,427                 |   |   | 56,905           |   |   | 257,589              |  
|Legal                                         |   | 64,914                 |   |   | 92,834           |   |   | 271,488              |  
|Management services                           |   | 653,010                |   |   | 860,518          |   |   | 1,922,519            |  
|Office                                        |   | 499,726                |   |   | 331,621          |   |   | 1,786,944            |  
|Other interest and bank
      charges         |   | 7,306                  |   |   | 6,911            |   |   | 27,637               |  
|Reporting and investor relations              |   | 62,253                 |   |   | 33,559           |   |   | 114,639              |  
|Research                                      |   | 120,293                |   |   | 79,967           |   |   | 605,679              |  
|Transfer agent fees and mailing               |   | 23,125                 |   |   | 24,347           |   |   | 91,349               |  
|Write-off of mineral claim
      expenditures |   | -                      |   |   | -                |   |   | 1,159,529            |  
|Write-down of property, plant and equipment   |   | -                      |   |   | 285,875          |   |   | 285,875              |  
|                                              |   |                        |   |   |                  |   |   |                      |  
|Total General and Administrative Expenses     |   | (3,407,186             | ) |   | (4,923,572       | ) |   | (23,854,439          | )
|                                              |   |                        |   |   |                  |   |   |                      |  
|Interest and other income                     |   | 2,296                  |   |   | 3,171            |   |   | 92,790               |  
|                                              |   |                        |   |   |                  |   |   |                      |  
|Cumulative effect of accounting change        |   | -                      |   |   | -                |   |   | (153,226             | )
|                                              |   |                        |   |   |                  |   |   |                      |  
|Other comprehensive income                    |   |                        |   |   |                  |   |   |                      |  
|                                              |   |                        |   |   |                  |   |   |                      |  
|Gain on foreign exchange                      |   | 10,783                 |   |   | 84,038           |   |   | 143,073              |  
|                                              |   |                        |   |   |                  |   |   |                      |  
|Loss and comprehensive loss for the period    | $ | (3,394,107             | ) | $ | (4,836,363       | ) | $ | (23,771,802          | )
|                                              |   |                        |   |   |                  |   |   |                      |  
|Net loss per share                            | $ | (0.01                  | ) | $ | (0.03            | ) |   |                      |  
|                                              |   |                        |   |   |                  |   |   |                      |  
|Basic and diluted weighted average number of  |   |                        |   |   |                  |   |   |                      |  
|common shares outstanding                     |   | 280,724,907            |   |   | 187,220,337      |   |   |                      |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATMENTS

F-4

---

SILVERADOGOLDMINESLTD.(An Exploration Stage Company) 
  CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY) 
  for the years ended November 30, 2002 to 2005 
  (Stated in United States Dollars)

|                                         |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   | Deficit     |   |   |            |  
|---------------------------------------- | ------------ |  | - | ---------- |  | - | ------------- | - | - | ---------- |  | - | ------------ | - | - | ----------- | - | - | ---------- | -
|                                         |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   | Accumulated |   |   |            |  
|                                         |              |  |   |            |  |   |               |   |   | Additional |  |   |              |   |   | During the  |   |   |            |  
|                                         | Common Stock |  |   | Share      |  |   | Paid-in       |   |   | Deferred   |  |   | Exploration  |   |   |             |  
|                                         | Shares       |  |   | Amount     |  |   | Subscriptions |   |   | Capital    |  |   | Compensation |   |   | Stage       |   |   | Total      |  
|                                         |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|Balance, November 30, 2001               | 42,423,988   |  | $ | 47,056,285 |  | $ | -             |   | $ | -          |  | $ | -            |   | $ | (48,904,944 | ) | $ | (1,848,659 | )
|Shares issued:                           |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|For options exercised                    | 6,900,000    |  |   | 925,000    |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 925,000    |  
|For warrants exercised                   | 16,250,000   |  |   | 1,970,000  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,970,000  |  
|For consulting fees                      | 20,775,000   |  |   | 1,232,551  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,232,551  |  
|For private placements                   | 2,511,668    |  |   | 2,922,000  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 2,922,000  |  
|In lieu of payment for debentures        | 6,944,308    |  |   | 1,465,927  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,465,927  |  
|Subscriptions received                   | -            |  |   | -          |  |   | 268,613       |   |   | -          |  |   | -            |   |   | -           |   |   | 268,613    |  
|Stock option granted                     | -            |  |   | -          |  |   | -             |   |   | 292,320    |  |   | (164,213     | ) |   | -           |   |   | 128,107    |  
|Net loss for the year                    | -            |  |   | -          |  |   | -             |   |   | -          |  |   | -            |   |   | (6,965,911  | ) |   | (6,965,911 | )
|                                         |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|Balance, November 30, 2002               | 98,086,631   |  |   | 55,571,763 |  |   | 268,613       |   |   | 292,320    |  |   | (164,213     | ) |   | (55,870,855 | ) |   | 97,628     |  
|Shares issued:                           |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|For private placements (net)             | 24,651,340   |  |   | 5,344,245  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 5,344,245  |  
|For options exercised                    | 200,000      |  |   | 70,000     |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 70,000     |  
|For warrants exercised                   | 15,278,171   |  |   | 1,344,575  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,344,575  |  
|For consulting fees                      | 2,511,668    |  |   | 554,085    |  |   | (268,613      | ) |   | -          |  |   | -            |   |   | -           |   |   | 285,472    |  
|In lieu of payment for debentures        | 5,299,542    |  |   | 1,181,467  |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,181,467  |  
|Subscriptions received                   | -            |  |   | -          |  |   | 115,000       |   |   | -          |  |   | -            |   |   | -           |   |   | 115,000    |  
|Amortization of stock-based compensation | -            |  |   | -          |  |   | -             |   |   | -          |  |   | 129,397      |   |   | -           |   |   | 129,397    |  
|Stock option granted                     | -            |  |   | -          |  |   | -             |   |   | 171,994    |  |   | (42,896      | ) |   | -           |   |   | 129,098    |  
|Net loss for the year                    | -            |  |   | -          |  |   | -             |   |   | -          |  |   | -            |   |   | (8,519,169  | ) |   | (8,519,169 | )
|Balance, November 30, 2003               | 146,027,352  |  |   | 64,066,135 |  |   | 115,000       |   |   | 464,314    |  |   | (77,712      | ) |   | (64,390,024 | ) |   | 177,713    |  
|                                         |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|Shares issued:                           |              |  |   |            |  |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|For private placements                   | 55,114,441   |  |   | 2,564,899  |  |   | (115,000      | ) |   | -          |  |   | -            |   |   | -           |   |   | 2,449,899  |  
|For warrants exercised                   | 14,876,597   |  |   | 845,745    |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 845,745    |  
|For consulting fees                      | 6,416,667    |  |   | 577,140    |  |   | -             |   |   |            |  |   | -            |   |   | -           |   |   | 577,140    |  
|In lieu of payment for debentures        | 2,014,530    |  |   | 200,023    |  |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 200,023    |  
|Subscriptions received                   | -            |  |   | -          |  |   | 70,000        |   |   | -          |  |   | -            |   |   | -           |   |   | 70,000     |  
|Amortization of stock-based compensation |              |  |   | -          |  |   | -             |   |   | -          |  |   | 77,712       |   |   | -           |   |   | 77,712     |  
|Stock-based compensation                 | -            |  |   | -          |  |   | -             |   |   | 2,000      |  |   | -            |   |   | -           |   |   | 2,000      |  
|Net loss for the year                    | -            |  |   | -          |  |   | -             |   |   | -          |  |   | -            |   |   | (4,304,232  | ) |   | (4,304,232 | )
|Balance, November 30, 2004 (Restated)    | 224,449,587  |  |   | 68,253,942 |  |   | 70,000        |   |   | 466,314    |  |   | -            |   |   | (69,226,387 | ) |   | (436,131   | )

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATMENTS

F-5

---

SILVERADOGOLDMINESLTD.(An Exploration Stage Company) 
  CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY) 
  for the years ended November 30, 2002 to 2005 
  (Stated in United States Dollars)

|                           |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   | Deficit     |   |   |            |  
|-------------------------- | ------------ |  | - | ---------- |  | - | ------------- | - | - | ---------- |  | - | ------------ |  | - | ----------- | - | - | ---------- | -
|                           |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   | Accumulated |   |   |            |  
|                           |              |  |   |            |  |   |               |   |   | Additional |  |   |              |  |   | During the  |   |   |            |  
|                           | Common Stock |  |   | Share      |  |   | Paid-in       |   |   | Deferred   |  |   | Exploration  |  |   |             |  
|                           | Shares       |  |   | Amount     |  |   | Subscriptions |   |   | Capital    |  |   | Compensation |  |   | Stage       |   |   | Total      |  
|                           |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|Shares issued:             |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|For private placements     | 120,219,687  |  |   | 2,735,893  |  |   | (70,000       | ) |   | -          |  |   | -            |  |   | -           |   |   | 2,665,893  |  
|For consulting fees        | 6,285,000    |  |   | 284,900    |  |   |               |   |   | -          |  |   | -            |  |   | -           |   |   | 284,900    |  
|Subscriptions received     | -            |  |   | -          |  |   | 54,500        |   |   | -          |  |   | -            |  |   | -           |   |   | 54,500     |  
|Stock-based compensation   | 4,100,001    |  |   | 252,003    |  |   |               |   |   | -          |  |   | -            |  |   | -           |   |   | 252,003    |  
|Net loss for the year      | -            |  |   | -          |  |   | -             |   |   | -          |  |   | -            |  |   | (3,394,107  | ) |   | (3,394,107 | )
|Balance, November 30, 2005 | 355,054,275  |  | $ | 71,526,738 |  | $ | 54,500        |   | $ | 466,314    |  | $ | -            |  | $ | (72,620,494 | ) | $ | (572,942   | )

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATMENTS

F-6

---

SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  CONSOLIDATED STATEMENTS OF CASH FLOWS 
  for the years ended November 30, 2005 and 2004 
  (Stated in United States Dollars)

|                                                             |   |                         |   |   |                  |   |   | Period Since         |  
|------------------------------------------------------------ | - | ----------------------- | - | - | ---------------- | - | - | -------------------- | -
|                                                             |   |                         |   |   |                  |   |   | Recommencement       |  
|                                                             |   |                         |   |   |                  |   |   | Of Exploration Stage |  
|                                                             |   | Years Ended November 30 |   |   | December 1, 2001 |  
|                                                             |   | 2005                    |   |   | 2004             |   |   | to November 30, 2005 |  
|                                                             |   |                         |   |   | (Restated)       |   |   | (Restated)           |  
|Cash Flows used in Operating Activities                      |   |                         |   |   |                  |   |   |                      |  
|Net loss for the period                                      | $ | (3,394,107              | ) | $ | (4,836,363       | ) | $ | (23,771,802          | )
|Adjustments to reconcile
      loss to net cash provided     |   |                         |   |   |                  |   |   |                      |  
|by (used in) operating activities:                           |   |                         |   |   |                  |   |   |                      |  
|Cumulative
      effect of accounting change                 |   | -                       |   |   | -                |   |   | 153,226              |  
|Depreciation, accretion
      and impairment                 |   | 259,087                 |   |   | 275,432          |   |   | 1,743,660            |  
|Stock
      based compensation                               |   | -                       |   |   | 79,712           |   |   | 2,252,950            |  
|Stock issued for debenture                                   |   | -                       |   |   | -                |   |   | 217,687              |  
|Non-cash
      consulting expense                            |   | 284,900                 |   |   | 577,140          |   |   | 862,040              |  
|Non-cash financing
      expense                             |   | 252,003                 |   |   | -                |   |   | 252,003              |  
|Interest
      accrued                                       |   | -                       |   |   | 5,881            |   |   | 486,370              |  
|Write-off of mineral
      claim expenditures                |   | -                       |   |   | -                |   |   | 1,159,529            |  
|Write-down
      of property, plant and equipment            |   | -                       |   |   | 285,875          |   |   | 285,875              |  
|Changes in non-cash operating working
      capital:         |   |                         |   |   |                  |   |   |                      |  
|Amounts
      receivable                                     |   | 1,568                   |   |   | 14,931           |   |   | (3,719               | )
|Gold inventory                                               |   | 20,903                  |   |   | 51,700           |   |   | (16,776              | )
|Prepaid
      expense                                        |   | 122,000                 |   |   | (122,000         | ) |   | -                    |  
|Exploration and development
      advances                   |   | -                       |   |   | 118,889          |   |   | -                    |  
|Share
      subscriptions issued                             |   | (15,500                 | ) |   | 70,000           |   |   | 169,500              |  
|Accounts payable and
      accrued liabilities               |   | 27,761                  |   |   | (33,543          | ) |   | (203,335             | )
|Increase
      in mineral claims royalty payable             |   | 80,000                  |   |   | 80,000           |   |   | 83,500               |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net cash used in Operating Activities                        |   | (2,361,385              | ) |   | (3,432,346       | ) |   | (16,329,292          | )
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash Flows used in Investing Activities                      |   |                         |   |   |                  |   |   |                      |  
|Purchase of property, plant and
      equipment              |   | (7,312                  | ) |   | (8,193           | ) |   | (1,334,705           | )
|Disposal of property, plant and
      equipment              |   | 49,200                  |   |   | 103,052          |   |   | 152,252              |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net cash provided (used) from Investing Activities           |   | 41,888                  |   |   | 94,859           |   |   | (1,182,453           | )
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash Flows from Financing Activities                         |   |                         |   |   |                  |   |   |                      |  
|Common stock issued for cash (net
      of share issue cost) |   | 2,736,309               |   |   | 3,295,644        |   |   | 18,607,773           |  
|Repayment of convertible debentures                          |   | -                       |   |   | (16,651          | ) |   | (38,347              | )
|Repayment of loans payable                                   |   | -                       |   |   | (7,873           | ) |   | (35,729              | )
|Repayment of capital lease obligations                       |   | (91,333                 | ) |   | (318,095         | ) |   | (409,458             | )
|Due to related party                                         |   | 70,282                  |   |   | -                |   |   | (221,028             | )
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net cash provided from Financing Activities                  |   | 2,715,258               |   |   | 2,953,025        |   |   | 17,903,211           |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Increase (decrease) in cash and cash equivalents             |   | 395,761                 |   |   | (384,462         | ) |   | 391,496              |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash and cash equivalents, beginning of period               |   | 12,828                  |   |   | 397,290          |   |   | 17,093               |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash at end of the period                                    | $ | 408,589                 |   | $ | 12,828           |   | $ | 408,589              |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F-7

---

SILVERADO GOLD MINES LTD.(An Exploration Stage Company) 
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)

|Note 1 | Nature and Continuance of Operations
|------ | ------------------------------------

The Company is an exploration stage
  company and is in the process of exploring its resource properties and has not
  yet determined whether these properties contain reserves that are economically
  recoverable. The company is also engaged in the development of low-rank coal-water
  fuel as a replacement for oil fired boilers and utility generators.

These financial statements have been
  prepared on a going concern basis, which assumes the realization of assets and
  settlement of liabilities in the normal course of business. The Company has
  a working capital deficiency of $855,147 as at November 30, 2005, has not yet
  achieved profitable operations and has accumulated losses totalling $72,620,494
  since inception. The Company is in arrears of required mineral claims and option
  payments for certain of its mineral properties at November 30, 2005, in the
  amount of $400,000 (2004: 320,000) and therefore, its rights to these properties
  may be adversely affected as a result of these non-payments. The Company has
  not been notified of any actions to be taken as a result of these defaults.
  Its ability to continue as a going concern is dependent upon the ability of
  the Company to generate profitable operations in the future and/or to obtain
  the necessary financing to meet its obligations and repay its liabilities arising
  from normal business operations when they come due. The outcome of these matters
  cannot be predicted with any certainty at this time and raise substantial doubt
  that the Company will be able to continue as a going concern. These consolidated
  financial statements do not include any adjustments to the amounts and classification
  of assets and liabilities that may be necessary should the Company be unable
  to continue as a going concern.

The Company plans to continue raising
  capital through private placements and warrant issues. In addition, the Company
  is exploring other business opportunities including the development of low-rank
  coal-water fuel as replacement fuel for oil fired industrial boilers and utility
  generators.

|Note 2 | Summary of Significant Accounting Policies
|------ | ------------------------------------------

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

Because a precise determination of many
  assets and liabilities is dependent upon future events, the preparation of financial
  statements for a period necessarily involves the use of estimates which have
  been made using careful judgement. Actual results may differ from these estimates.

F-8

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 2

|Note 2 | Summary of Significant Accounting Policies
|------ | ------------------------------------------

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | These consolidated financial statements include the
        accounts of the Company and its wholly-owned subsidiary, Silverado Green
        Fuel Inc. All significant inter-company transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b) | 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.                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | c) | Basic and Diluted Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | Basic loss per share are computed by dividing the loss
        for the year by the weighted average number of common shares outstanding
        during the year. 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.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | d) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The carrying value of cash and cash equivalents, accounts
        payable and accrued liabilities and loans payable secured by gold inventory
        approximate fair value because of the short-term maturity of these instruments.
        The carrying amounts reported in the balance sheet for convertible debentures
        approximate their fair values as they bear interest at rates which approximate
        market rates. 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.                                                                                                                                                                                  

F-9

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 3

|Note 2 | Summary of Significant Accounting Policies
|------ | ------------------------------------------

| | e) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company uses the assets and liability method of
        accounting for income taxes pursuant to Statement of Financial Accounting
        Standards (SFAS) No. 109 Accounting for Income Taxes.
        Under the assets and liability method of SFAS No. 109, deferred tax assets
        and liabilities are recognized for the future tax consequences attributable
        to temporary differences between the financial statements carrying amounts
        of existing assets and liabilities and their respective tax bases. Deferred
        tax assets and liabilities are measured using enacted tax rates expected
        to apply to taxable income in the years in which those temporary differences
        are expected to be recovered or settled.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | f) | Exploration Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Securities and Exchange Commissions Exchange
        Act 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 Financial Accounting Standard Board Statement No. 7,
        if applicable. Accordingly, the Company has not been referred to as being
        a development stage company. Accumulated results of operations are presented
        from December 1, 2001, the date the Company re-entered the exploration
        stage.                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | g) | Gold Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Gold inventory is valued at the lower of weighted average
        cost and estimated net realizable value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | h) | Mineral Claim Payments and Exploration Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company expenses all costs related to the acquisition,
        maintenance and exploration of mineral claims in which it has secured
        exploration rights prior to establishment of proven and probable reserves.
        To date, the Company has not established the commercial feasibility of
        its exploration prospects, therefore, all costs are being expensed. The
        Company sold 52 troy ounces of gold for proceeds of $22,633 which have
        been directly applied as a reduction to exploration costs.                                                                                                                                                                                                                                

F-10

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 4

|Note 2 | Summary of Significant Accounting Policies
|------ | ------------------------------------------

| | i) | Asset Retirement Obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | Effective December 1, 2002, the Company adopted SFAS
        No. 143, Accounting for Asset Retirement Obligations, which
        addresses financial accounting and reporting for obligations associated
        with the retirement of tangible long-lived assets and the associated retirement
        costs. The standard applies to legal obligations associated with the retirement
        of long-lived assets that result from the acquisition, construction, development
        and normal use of the asset.                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | SFAS No. 143 requires that the fair value of a liability
        for an asset retirement obligation be recognized in the period in which
        it is incurred if a reasonable estimate of fair value can be made. The
        fair value of the liability is added to the carrying amount of the associated
        asset and this additional carrying amount is depreciated over the life
        of the asset. The liability is accreted at the end of each period through
        charges to operating expense. If the obligation is settled for other than
        the carrying amount of the liability, the Company will recognize a gain
        or loss on settlement.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | j) | Property, Plant and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | Property, plant and equipment are stated at cost. Depreciation
        is provided as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Building, plant and equipment
      Straight line over 3 to 20 yearsMining equipment under capital lease
      Straight line over 10 yearsAuto and trucks
      Straight line over 10 yearsComputer equipment
      Straight line over 3 years


| | k) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company considers all liquid investments, with an
        original maturity of three months or less when purchased, to be cash equivalents.
        Financial Instruments which potentially subject the Company to concentrations
        of credit risk consist principally of cash in banks. At times during the
        year, the Company maintained deposits in excess of insured limits provided
        by FDIC and CDIC. The Company places its cash and cash equivalents with
        high credit quality financial institutions which the Company believes
        limits these risks.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | l) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | 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
        U.S. funds at the rates of exchange in effect at the year- end. Non-monetary
        assets and revenue and expense transactions are translated at the rate
        in effect at the time at which the transactions took place. Foreign exchange
        gains and losses are included in the determination of results from operations
        for the year.               

F-11

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 5

|Note 2 | Summary of Significant Accounting Policies
|------ | ------------------------------------------

| | m) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Proceeds on gold recoveries from test mining are recorded
        as a reduction of exploration costs during the period the Company is in
        the exploration stage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | n) | Research Expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Research expenditures are expensed in the year incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | o) | Accounting for Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Effective November 1, 2002, the Company adopted the
        fair value recognition provision of SFAS No. 123, Accounting for
        Stock-based Compensation. Under the modified prospective method
        of adoption selected by the Company under the provisions of SFAS No. 148,
        Accounting for Stock-based Compensation  Transition and Disclosure,
        compensation cost recognized in 2003 is the same as that which would have
        been recognized had the recognition provisions of SFAS No. 123 been applied
        from its original effective date. Results for prior years have not been
        restated. The value of shares issued to non-employees for services is
        measured at the date the services are performed.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | p) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | In May 2003, SFAS No. 150, Accounting for Certain
        Financial Instruments with Characteristics of both Liabilities and Equity.
        This standard establishes how an issuer classifies and measures certain
        financial instruments with characteristics of both liabilities and equity.
        This standard becomes effective for any financial instruments entered
        into or modified after May 31, 2003. We do not expect the adoption of
        SFAS No. 150 to have a material effect on our financial statements.                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | In April 2003, the FASB issued SFAS No. 149, Amendment
        of Statement 133 on Derivative Instruments and Hedging Activities.
        This statement amends and clarifies financial accounting and reporting
        for derivative instruments, including certain derivative instruments embedded
        in other contracts (collectively referred to as derivatives) and for hedging
        activities under SFAS No. 133 Accounting for Derivative Instruments
        and Hedging Activities entered into after June 30, 2003. We do not
        expect the adoption of SFAS No. 149 to have a material effect on our financial
        statements.                                                                                                   

F-12

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 6

|Note 2 | Summary of Significant Accounting Policies
|------ | ------------------------------------------

| | p) | Recent Accounting Pronouncements (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | In January 2003, the FASB issued FASB Interpretation
        No. 46 (FIN 46), Consolidation of Variable Interest
        Entities. This interpretation gives guidance that determines whether
        consolidation of a Variable Interest Equity is required and is effective
        for all variable interest entities with which we become involved beginning
        in February 2003, and all pre-existing entities beginning after June 15,
        2003. We do not expect the adoption of FIN 46 to have a material effect
        on our financial statements.                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | In November 2002, the FASB issued SFAS interpretation
        No. 45 (FIN 45), Guarantors Accounting and Disclosure
        Requirements for Guarantees, Including Guarantees of Indebtedness of Others.
        FIN 45 requires that upon issuance of a guarantee, the guarantor must
        recognize a liability for the fair value of the obligation it assumes
        under that guarantee. The initial recognition and measurement should be
        applied on a prospective basis to guarantees issued or modified after
        December 31, 2002. Disclosure requirements are effective for financial
        statements of both interim and annual periods that end after December
        15, 2002. We have no guarantees to unaffiliated third parties so the adoption
        of FIN 45 had no impact on our financial statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | In June 2002, the FASB issued SFAS No. 146, Accounting
        for Costs Associated with Exit or Disposal Activities. This standard
        addresses the recognition, measurement and reporting of costs that are
        associated with exit or disposal activities. SFAS No. 146 is effective
        for exit or disposal activities that are initiated after December 31,
        2002. The adoption of SFAS No. 146 had not impact on our financial statements.                                                                                                                                                                                                                                                                                                                                                                              

F-13

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 7

|Note 3 | Mineral Property Interests
|------ | --------------------------

| | A) | 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)                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    | ii)                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    | iii)                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| | B) | Nolan Gold Project, Wiseman Mining District,
        Alaska                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                 
| |    | The Nolan Gold Project consists of 4 contiguous
        properties covering approximately 6 square miles, 8 miles west of Wiseman
        and 175 miles north of Fairbanks, Alaska. The specific properties at this
        site are as follows:
| |    |                                                                                                                                                                                                                                                 
| |    | i)                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 
| |    | ii)                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                 

F-14

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 8

|Note 3 | Mineral Property Interests (contd)
|------ | ------------------------------------

| | B) | Nolan Gold Project, Wiseman Mining District,
        Alaska  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 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 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 at November 30, 2005, royalty payments
        totalling $400,000 (2004: $320,000) are unpaid, in arrears, and included
        in mineral claims payable.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | D) | Eagle Creek Property, Fairbanks Mining District,
        Alaska                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | This property consists of 77 state mineral
        claims. The Company has an option agreement to purchase a 100% interest
        in the property for $400,000 of which $68,000 remains to be paid. The
        amount of $5,000 per year is required to be paid to keep the agreement
        in good standing.                                                                                                                                                                              

F-15

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 9

|Note 4 | Property, Plant and Equipment                                                                                                  
|------ | -------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                
|       | Property, plant and
        equipment primarily include mining equipment and camp facilities at the
        Nolan Gold Project.
|

| |                              |   | 2005      | 
| | ---------------------------- | - | --------- | 
| |                              |   |           | 
| |                              |   | Cost      | 
| |                              |   |           | 
| | Nolan Gold Project buildings | $ | 63,000    | 
| | Nolan mining equipment       |   | 849,230   | 
| | Nolan mining equipment       |   |           | 
| | under capital lease          |   | 949,342   | 
| | Other equipment              |   | 426,834   | 
| |                              |   |           | 
| |                              | $ | 2,288,406 | 

| |                              |   | 2004      | 
| | ---------------------------- | - | --------- | 
| |                              |   |           | 
| |                              |   | Cost      | 
| |                              |   |           | 
| | Nolan Gold Project buildings | $ | 63,000    | 
| | Nolan mining equipment       |   | 855,730   | 
| | Nolan mining equipment       |   |           | 
| | under capital lease          |   | 1,134,342 | 
| | Other equipment              |   | 420,823   | 
| |                              |   |           | 
| |                              | $ | 2,473,895 | 

|Note 5 | Accounts Payable and Accrued Liabilities                  
|------ | ----------------------------------------------------------
|       |                                                           
|       | Accounts payable and accrued liabilities consist
      of:

| |                  |   | 2005    |  |   | 2004    | 
| | ---------------- | - | ------- |  | - | ------- | 
| |                  |   |         |  |   |         | 
| | Accounts payable | $ | 302,124 |  | $ | 287,395 | 
| | Accrued interest |   | 90,934  |  |   | 77,902  | 
| |                  | $ | 393,058 |  | $ | 365,297 | 

F-16

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 10

|Note 6 | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | The Company adopted
        SFAS No. 143 on December 1, 2002. Upon adoption the Company increased
        its reclamation liability by $270,000, increased the carrying value of
        assets by $116,774 and recorded a cumulative effect adjustment of $153,226.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
|
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | Asset retirement obligations
        relate to the closure and reclamation of the Grant Mine Tailing Pond,
        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 Grant Mine assets were written
        off as impaired effective December 1, 2001 and an amount of $47,378 was
        also charged to operations in the year ended November 30, 2004 for the
        increase in the asset retirement obligations related to those Grant Mine
        assets. The Company has no assets legally restricted for purposes of settling
        asset retirement obligations.
|
|
|
|
|
|
|
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | Reconciliation of asset retirement
        obligation for the year ended November 30, 2005:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                            |   | Grant   |  |   | Nolan   |  |   |         | 
| | -------------------------- | - | ------- |  | - | ------- |  | - | ------- | 
| |                            |   | Mine    |  |   | Project |  |   | Total   | 
| | Balance, December 1, 2004  | $ | 315,000 |  | $ | 174,300 |  | $ | 489,300 | 
| | Accretion expense          |   | 32,287  |  |   | 17,866  |  |   | 50,153  | 
| | Liabilities settled        |   | -       |  |   | -       |  |   | -       | 
| | Balance, November 30, 2005 | $ | 347,287 |  | $ | 192,166 |  | $ | 539,453 | 

Note 7
      Convertible Debentures
          Note 9Convertible debentures
          outstanding at November 30, 2005 and 2004 consisted of the following:


| |                       |   | 2005     |   |   | 2004     |  
| | --------------------- | - | -------- | - | - | -------- | -
| |                       |   |          |   |   |          |  
| | Renegotiated in 2001  | $ | -        |   | $ | -        |  
| | Issued in 1994        |   | 140,000  |   |   | 140,000  |  
| | Issued in 1999        |   | 36,652   |   |   | 36,652   |  
| |                       |   |          |   |   |          |  
| |                       |   | 176,652  |   |   | 176,652  |  
| | Less: current portion |   | (176,652 | ) |   | (176,652 | )
| |                       |   |          |   |   |          |  
| |                       | $ | -        |   | $ | -        |  

F-17

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 11

|Note 7 | Convertible Debentures Note 9 
      (contd)
|------ | -----------------------------------------------

| | a) | On March 1, 2001, the Company completed negotiations
        to restructure its $1,860,000 convertible debentures. The replacement
        debentures aggregated $2,384,892 and consisted of the original $1,860,000
        principal amount plus all accrued interest to March 1, 2001. The debentures
        bear interest of 8.0% per annum. Interest is due and payable on a quarterly
        basis on February 28, May 31, August 31 and November 30. If the Company
        fails to make any payment of principal or interest, the Company must issue
        shares equivalent in value to the unpaid amounts of 20% below the average
        market price.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Remaining debentures of $140,000 plus accrued interest
        of $87,227 are in default, however, it is unclear whether they will be
        exchanged for replacement debentures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | b) | In February 1999 the Company issued a debenture for
        $75,000 with interest payable at a rate of 5.0% per annum. The debenture
        is unsecured and it was due on February 28, 2002. During the year ended
        November 30, 2005, the Company made a principal payment of $Nil (2004:
        $16,652) and an interest payment of $Nil (2004: $Nil).                                                                                                                                                                                                                                                                                                     

|Note 8 | Capital Lease Obligations
|------ | -------------------------

| | a) | On October 11, 2002, the Company entered into a lease
        purchase agreement whereby the Company would purchase mining equipment
        valued at a total of $1,496,150. The agreement required payment upon signing
        of $550,000 (paid), $100,000 (paid) on or before December 1, 2004 and
        24 equal payments thereafter for the balance of the purchase price plus
        interest at a rate of 12% per annum.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | b) | On February 14, 2003, the Company entered into a three-year
        lease agreement whereby the company would purchase mining equipment valued
        at a total of $250,170. The agreement required payment upon signing of
        $105,000 (paid), $25,000 on or before December 4, 2004 and 24 equal payments
        for the balance of the purchase price plus interest at a rate of 12% per
        annum.                  

During the year ended November 30, 2004,
  the Company entered into an agreement to combine the two lease agreements. The
  new agreement required payment upon signing of $50,000 (paid), monthly payments
  of $25,000 until July 2006 for the balance of principal plus interest at a rate
  of 7.5% per annum.

F-18

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 12

|Note 8 | Capital Lease Obligations (contd)                                                                                                                                                                                                                                                                                                                                                                          
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                              
|       | The assets and liabilities
        under capital leases are recorded at the lower of the present value of
        the minimum lease payments or the fair value of the asset. The assets
        are amortized over their estimated productive lives which are estimated
        to be 10 years. Amortization on assets under capital leases charged to
        expense in 2005 was $171,631 (2004: $174,632).
|
|
|
|       |                                                                                                                                                                                                                                                                                                                                                                                                              
|       | Minimum future lease
        payments under capital leases as of November 30, 2005 and 2004 for the
        next year and in the aggregate are:                                                                                                                                                                                                                                                              
|

| |                              |   | 2005     |   |   | 2004     |  
| | ---------------------------- | - | -------- | - | - | -------- | -
| | November 30, 2005            | $ | -        |   | $ | 562,356  |  
| | November 30, 2006            |   | 778,576  |   |   | 419,636  |  
| | Total minimum lease payments |   | 778,576  |   |   | 981,992  |  
| | Less: interest               |   | (56,427  | ) |   | (64,510  | )
| |                              |   | 722,149  |   |   | 917,482  |  
| | Less: current portion        |   | (258,254 | ) |   | (510,014 | )
| | Long-term portion            | $ | 463,895  |   | $ | 407,468  |  

F-19

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 13

|Note 9 | Common Stock
|------ | ------------
|       |             
|       | Commitments:

| | a) | Stock Options:                                                                                                    
| | -- | ------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                   
| |    | A summary of the change in stock options for the year
        ended November 30, 2005 and 2004 is presented below:

| |                                                  |  |            |   |  | Weighted | 
| | ------------------------------------------------ |  | ---------- | - |  | -------- | 
| |                                                  |  | Number     |   |  | Average  | 
| |                                                  |  | of         |   |  | Exercise | 
| |                                                  |  | Options    |   |  | Price    | 
| |                                                  |  |            |   |  |          | 
| | Outstanding at November 30, 2003                 |  | 9,420,000  |   |  | $0.52    | 
| | Granted                                          |  | 20,880,000 |   |  | 0.11     | 
| | Expired                                          |  | (870,000   | ) |  | 0.18     | 
| |                                                  |  |            |   |  |          | 
| | Outstanding at November 30, 2004                 |  | 29,430,000 |   |  | $0.24    | 
| | Expired                                          |  | (800,000   | ) |  | 0.35     | 
| |                                                  |  |            |   |  |          | 
| | Outstanding and exercisable at November 30, 2005 |  | 28,630,000 |   |  | $0.11    | 

As at November 30, 2005, the following
  stock options were outstanding:

Number of
      
      ExerciseOptions
      
      Price
      
      Expiry Date550,000
      
      $0.10
      
      December 1, 2006900,000
      
      0.15
      
      February 1, 20086,500,000
      
      0.13
      
      December 4, 20085,680,000
      
      0.13
      
      January 8, 201115,000,000
      
      0.10
      
      July 8, 201128,630,000 F-20


---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 14

|Note 9 | Common Stock (contd) 
|------ | -----------------------
|       |                        
|       | Commitments: - (contd)

| | a) | Stock Options: - (contd)                                                                                                                                                                                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                       
| |    | The Company does not record a compensation expense on
        the granting of stock options to employees and directors, but does provide
        disclosure of the pro forma loss per share information had the Company
        elected to follow the fair value method. Using the Black-Scholes option
        pricing model the pro forma information is as follows:

| |                                            |   | 2005       |   |   | 2004       |  
| | ------------------------------------------ | - | ---------- | - | - | ---------- | -
| |                                            |   |            |   |   |            |  
| | Net loss for the year as reported          | $ | (3,394,107 | ) | $ | (4,304,232 | )
| | Stock-based compensation                   |   | -          |   |   | (1,431,600 | )
| |                                            |   |            |   |   |            |  
| | Pro forma net loss for the year            | $ | (3,394,107 | ) | $ | (5,735,832 | )
| |                                            |   |            |   |   |            |  
| | Pro forma basic and diluted loss per share | $ | (0.01      | ) | $ | (0.03      | )

The following assumptions were used
  for the Black-Scholes model:

Risk free interest rate
      2.25%Dividend free yield
      0%Expected volatility
      93%Weighted average expected stock option life
      5 years


| |    | The weighted average fair value of the employee and
        director stock options granted was $0.04 per share.                                 
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                 
| | b) | Warrants:                                                                                                                                       
| |    |                                                                                                                                                 
| |    | Warrants outstanding as at November 30, 2005 are exercisable
        into 1 common share for each warrant held and a summary is presented below:

F-21

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 15

|Note 9 | Common Stock (contd) 
|------ | -----------------------
|       |                        
|       | Commitments: - (contd)

| | b) | Warrants: - (cont)
| | -- | -------------------

ExercisePrice perNumber of
      
      WarrantWarrants
      
      $
      
      Expiry Date5,000,000
      
      0.0750
      
      April 19, 20061,400,000
      
      0.0750
      
      May 10, 20062,000,000
      
      0.0400
      
      May 27, 20068,000,000
      
      0.0650
      
      June 9, 20068,000,000
      
      0.0750
      
      June 9, 20062,500,000
      
      0.0650
      
      July 9, 20062,500,000
      
      0.0750
      
      July 9, 20065,357,143
      
      0.0550
      
      September 15, 20062,857,143
      
      0.0575
      
      September 15, 20062,500,000
      
      0.0650
      
      September 15, 20062,333,333
      
      0.0600
      
      October 1, 200510,000,000
      
      0.0500
      
      November 1, 200610,000,000
      
      0.0575
      
      November 1, 20062,666,666
      
      0.1500
      
      February 25, 200765,114,285


| | c) | Convertible Debentures  Note 7
| | -- | -------------------------------

|Note 10 | Related Party Transactions                                                                                                                                                                                                                    
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                               
|        | The Company has had
        related party transactions with Tri-Con Mining Ltd., Tri-Con Mining Inc.,
        Tri-Con Mining Alaska Inc. (collectively the Tri-Con Group),
        all of which are controlled by a director of the Company.
|
|

F-22

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 16

|Note 10 | Related Party Transactions (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 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 contract dated January, 1997, work is charged
        at cost plus 25% for exploration and cost plus 15% for development and
        mining. Cost includes out-of-pocket or actual cost plus 15% charge for
        office overhead including stand-by and contingencies. There is no mark-
        up on capital purchases. The Tri-Con Group does not charge the Company
        for the services of its directors who are also directors of the Company.
        For the year ended November 30, 2005, the Tri-Con Groups services
        focused mainly on corporate planning, mining, engineering and preparation
        for year round production on the Companys Nolan property, administration
        services at both the field and corporate offices and the Low-Rank Coal-
        Water fuel project.
|
|
|
|
|
|
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | The aggregate amounts
        paid to the Tri-Con Group each year by category, including amounts relating
        to the Grant Mine Project and Nolan properties, for disbursements and
        for services rendered by the Tri-Con Group personnel working on the Companys
        projects and include interest charged on outstanding balances at the Tri-Con
        Groups borrowing costs are shown below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
|
|
|

| |                                                 |   | 2005      |  |   | 2004       | 
| | ----------------------------------------------- | - | --------- |  | - | ---------- | 
| |                                                 |   |           |  |   | (Restated) | 
| |                                                 |   |           |  |   |            | 
| | Exploration, development and field services     | $ | 673,483   |  | $ | 948,729    | 
| | Administrative and management services          |   | 687,510   |  |   | 1,363,148  | 
| | Research                                        |   | 120,293   |  |   | 79,967     | 
| |                                                 |   |           |  |   |            | 
| |                                                 | $ | 1,481,286 |  | $ | 2,391,844  | 
| |                                                 |   |           |  |   |            | 
| | Amount of total charges in excess of Tri-Con    |   |           |  |   |            | 
| | costs incurred                                  | $ | 154,707   |  | $ | 275,121    | 
| |                                                 |   |           |  |   |            | 
| | Excess amount charged as a percentage of actual |   |           |  |   |            | 
| | costs incurred                                  |   | 10.44%    |  |   | 11.5%      | 

The amounts charged for services by
  the Tri-Con Group approximate the fair value of these costs had they been performed
  by arms length parties.

F-23

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 17

|Note 11 | Income Taxes                                                                                                                            
|------- | ----------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                         
|        | Tax effects of temporary
        differences that give rise to deferred tax assets at November 30, 2005
        and 2004 are as follows:
|

| |                                              |   | 2005        |   |   | 2004        |  
| | -------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                              |   |             |   |   |             |  
| | Net operating loss carry forwards            | $ | 12,695,00   |   | $ | 12,075,000  |  
| | Temporary differences arising from mineral   |   |             |   |   |             |  
| | properties and building, plant and equipment |   | (354,000    | ) |   | (1,364,000  | )
| | Valuation allowance                          |   | (12,341,000 | ) |   | (10,711,000 | )
| |                                              |   |             |   |   |             |  
| | Net future tax asset (liability)             | $ | -           |   | $ | -           |  

At November 30, 2005, the Company had
  losses carried forward totalling $25,050,000 available to reduce future years
  income for U.S. income tax purposes which expire in various years to 2025. In
  addition, we had losses carried forward in Canada totalling CDN$12,096,000 which
  expire in various years to 2015.

The provision for income taxes differs
  from the amount computed by applying the Canadian statutory federal income tax
  rate of 37.62% (2004: 37.62%) to net loss before provision for income taxes.
  The sources and tax effects of the differences are as follows:

| |                                          |   | 2005       |   |   | 2004       |  
| | ---------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                          |   |            |   |   |            |  
| | Computed expected tax benefit          | $ | (1,468,000 | ) | $ | (1,718,000 | )
| | Tax loss expired during the year         |   | 928,000    |   |   | 1,546,000  |  
| | Temporary differences and other          |   | 167,000    |   |   | 18,000     |  
| | Change in valuation allowance            |   | 302,000    |   |   | 64,000     |  
| | Difference in foreign tax rate and other |   | 71,000     |   |   | 90,000     |  
| |                                          |   |            |   |   |            |  
| | Income tax provision                     | $ | -          |   | $ | -          |  

|Note 12 | Commitments and Contingencies
|------- | -----------------------------

| | a) | Severance Agreements with Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company has entered into compensation agreements
        with two directors of the Company. The agreements provide for severance
        arrangements where a change of control of the Company occurs, as defined,
        and the directors are terminated. The compensation payable to the two
        directors aggregates $4,100,000 (2004: $4,100,000) plus the amount of
        annual bonuses and other benefits that they would have received in the
        eighteen months following termination.

F-24

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 18

|Note 12 | Commitments and Contingencies (contd)
|------- | ---------------------------------------

| | b) | Consulting Agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company entered into consulting agreements with
        six individuals for various corporate planning and business development
        services to the Company. Under the terms of the agreements, the Company
        will issue an aggregate 6,285,000 shares over the length of the contracts
        which range from six months to one year. Consulting fees are calculated
        using the number of shares issued multiplied by the closing price on the
        day the shares were issued.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | c) | Office Lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company entered into a two-year office lease agreement.
        The Company is committed to the following annual basic rental payments:                                                                                                                                                                                                                                                                                                                                                               

| |  | Year ended November 30, 2006 |  | $ | 51,784 |  | (CDN$61,416) | 
| |  | ---------------------------- |  | - | ------ |  | ------------ | 
| |  | 2007                         |  |   | 12,946 |  | (CDN$15,354) | 
| |  |                              |  |   |        |  |              | 
| |  |                              |  | $ | 64,730 |  |              | 

|Note 13 | Segment Disclosures
|------- | -------------------

| | a) | Reportable Segments                                                                                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                 
| |    | The Company operates in one reportable segment being
        the acquisition, exploration and development of mineral properties. The
        Companys development of low-rank coal-water fuel is in its initial
        stages and is not a reportable segment.
| |    |                                                                                                                                                                                                                                                                 
| | b) | Geographical Information                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                 
| |    | The following presents financial information about geographical
        areas:                                                                                                                                                                                  

| |                        |   | 2005      |  |   | 2004      | 
| | ---------------------- | - | --------- |  | - | --------- | 
| | Net loss for the year: |   |           |  |   |           | 
| | Canada                 | $ | 884,107   |  | $ | 1,824,434 | 
| | United States          |   | 2,937,783 |  |   | 2,479,798 | 
| |                        |   |           |  |   |           | 
| |                        | $ | 3,821,890 |  | $ | 4,304,232 | 
| | Long-lived assets:     |   |           |  |   |           | 
| | Canada                 |   | 5,442     |  |   | 8,473     | 
| | United States          |   | 1,285,553 |  |   | 1,632,318 | 
| |                        |   |           |  |   |           | 
| |                        | $ | 1,290,995 |  | $ | 1,640,791 | 

F-25

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 19

|Note 14 | Non-Cash Transactions                                                                                                                                                                                                                    
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                          
|        | Investing and financing
        activities that do not have a direct impact on current cash flows are
        excluded from the cash flow statements. The following transactions were
        excluded from the statements of cash flows:
|
|
|        |                                                                                                                                                                                                                                          
|        | During the year ended November
        30, 2005:                                                                                                                                                                                         

| | a) | the Company issued 6,285,000 common shares at various
        prices for total proceeds of $284,900 pursuant to payment of consulting
        fees;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                    
| | b) | the Company utilized prior years share subscriptions
        of $70,000 for the issuance of common shares.                                        
| |    |                                                                                                                                                    
| | c) | the Company returned mining equipment to its lessor
        of $104,000.                                                                           

During the year ended November 30, 2004:

| | a) | the Company issued 1,956,458 common shares at various
        prices for total proceeds of $194,142 pursuant to payment of convertible
        debentures;               
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                          
| | b) | the Company issued 58,072 common shares at various prices
        for total proceeds of $5,881 pursuant to payment of interest payable on
        convertible debentures;
| |    |                                                                                                                                                                          
| | c) | the Company issued 6,416,667 common shares at various
        prices for total proceeds of $577,140 pursuant to payment of consulting
        fees;                      
| |    |                                                                                                                                                                          
| | d) | the Company utilized prior years share subscriptions
        of $115,000 for the issuance of common shares.                                                             

|Note 15 | Subsequent Events                                    
|------- | -----------------------------------------------------
|        |                                                      
|        | Subsequent to November 30, 2005,
        the Company:

| | a) | issued 82,420,401 common shares at $0.025 per share
        totaling $2,060,510 pursuant to a private placement;
| | -- | ----------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                 
| | b) | issued 4,285,715 common shares at $0.028 per share totaling
        $120,000 pursuant to a private placement;   

F-26

---

Silverado Gold Mines Ltd. 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  November 30, 2005 and 2004 
  (Stated in United States Dollars)  Page 20

|Note 15 | Subsequent Events (contd)
|------- | ---------------------------

| | c) | issued 14,020,000 common shares at $0.03 per share totaling
        $420,600 pursuant to a private placement; 
| | -- | --------------------------------------------------------------------------------------------------------------
| |    |                                                                                                               
| | d) | issued 4,076,924 common shares at $0.0325 per share
        totaling $132,500 pursuant to a private placement;
| |    |                                                                                                               
| | e) | issued 428,573 common shares at $0.035 per share totaling
        $15,000 pursuant to a private placement.    

|Note 16 | Comparative Figures                                                                                                                                                                                                               
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                   
|        | Certain figures of
        the comparative year have been restated to conform with the current years
        presentation.                                                                                                       
|
|        |                                                                                                                                                                                                                                   
|Note 17 | Restatement                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                   
|        | The accompanying consolidated
        financial statements for the year ended November 30, 2004 have been restated
        to give effect to the write-off of exploration and development advances
        previously capitalized.
|
|
|        |                                                                                                                                                                                                                                   
|        | The effect of the restatements
        on loss for the period and loss per share is as follows:                                                                                                                                   

| |                                                        |   | 2004       |   | 
| | ------------------------------------------------------ | - | ---------- | - | 
| |                                                        |   |            |   | 
| | Net loss for the period, as previously
      stated    | $ | (4,304,232 | ) | 
| |                                                        |   |            |   | 
| | Exploration and development advances
      written off |   | (532,131   | ) | 
| |                                                        |   |            |   | 
| | Net loss for the period, as restated                   | $ | (4,836,363 | ) | 
| |                                                        |   |            |   | 
| | Net loss per share, as previously
      stated         | $ | (0.02      | ) | 
| |                                                        |   |            |   | 
| | Exploration and development advances
      written off |   | (0.01      | ) | 
| |                                                        |   |            |   | 
| | Net loss per share, as restated                        | $ | (0.03      | ) | 

F-27

---

ITEM 8.     CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Engagement of Berkovits, Lago & Company, LLP

We engaged Berkovits, Lago & Company, LLP as our principal
independent accountant effective April 6, 2005 following the resignation of
Amisano Hanson, Chartered Accountants ("Amisano Hanson") as our principal
independent accountant effective April 6, 2005. This decision to change
principal independent accountants was approved by our board of directors.

Amisano Hanson's report dated February 21, 2005 on our
consolidated balance sheet as at November 30, 2004, and our consolidated
statements of operations, cash flows, stockholders equity (deficiency) for the
year then ended and the period since recommencement of the exploration stage
December 1, 2001 to November 30, 2004 did not contain an adverse opinion or
disclaimer of opinion, nor was it modified as to uncertainty, audit scope, or
accounting principles.

In connection with the audits of the fiscal year ended November
30, 2004 and the subsequent interim period through to April 6, 2005, there were
no disagreements with Amisano Hanson on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures,
which disagreements if not resolved to the satisfaction of Amisano Hanson would
have caused them to make reference thereto in their reports on the Companys
audited financial statements. These financial statements were prepared on a
going concern basis, which assumes the realization of assets and settlement of
liabilities in the normal course of business.

We provided Amisano Hanson with a copy of the foregoing
disclosures and requested in writing that Amisano Hanson furnish us with a
letter addressed to the Securities and Exchange Commission stating whether or
not they agree with such disclosures. We received the requested letter from
Amisano Hanson and we have filed a copy of Amisano Hansons letter as an exhibit
to our current report on Form 8-K filed with the SEC on April 12, 2005.

Engagement of Amisano Hanson

Morgan & Company, Chartered Accountants ("Morgan &
Company") were dismissed as our principal independent accountant effective
January 26, 2005. We engaged Amisano Hanson, Chartered Accountants as our
principal independent accountant effective January 26, 2005. The decision to
change principal independent accountant was approved by our board of
directors.

Morgan & Company's report dated January 31, 2004 on our
consolidated balance sheets as at November 30, 2003 and 2002, and the
consolidated statements of operations, stockholders equity, and cash flows for
the years then ended did not contain an adverse opinion or disclaimer of
opinion, nor was it modified as to uncertainty, audit scope, or accounting
principles. In connection with the audits of the two fiscal years ended November
30, 2003 and 2002 and the subsequent period through to January 26, 2005, there
were no disagreements with Morgan & Company on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which disagreements if not resolved to the satisfaction of the
Morgan & Company would have caused them to make reference thereto in their
reports on our audited financial statements. These financial statements were
prepared on a going concern basis, which assumes the realization of assets and
settlement of liabilities in the normal course of business.

We provided Morgan & Company with a copy of the foregoing
disclosures and requested in writing that Morgan & Company furnish us with a
letter addressed to the Securities and Exchange Commission stating whether or
not they agree with such disclosures. We received the requested letter from
Morgan & Company wherein they have confirmed their agreement to our
disclosures. A copy of Morgan & Companys letter was filed as an exhibit to
our Current Report on Form 8-K filed with the Securities and Exchange Commission
on January 31, 2005.

- 49 -

---

ITEM 8A.     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 as of
November 30, 2005, being the date of our most recently completed fiscal year
end. This evaluation was carried out under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer, Garry
L. Anselmo. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective to ensure that the information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified by the rules and forms
of the Securities and Exchange Commission.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Exchange Act
is accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.

During our most recently completed fiscal year ended November
30, 2005, there were no changes in our internal control over financial reporting
that have materially affected, or are reasonably likely to affect, our internal
control over financial reporting.

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, the registrant's
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrant's 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:

| | (1) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                
| | (2) | 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 of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                
| | (3) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      registrant's assets that could have a material effect on the financial
      statements.                                                                                                                                              

ITEM 8B.     OTHER INFORMATION.

Not applicable.

- 50 -

---

ITEM 9.     DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE
EXCHANGE ACT.

Our current executive officers and directors are:

|Name                       | Age | Position                                                                                                                         
|-------------------------- | --- | ---------------------------------------------------------------------------------------------------------------------------------
|                           |     |                                                                                                                                  
|Garry L. Anselmo           | 62  | Director and Chairman of the Board; President,
      Chief Executive Officer, Chief Financial Officer and Chief Operating Officer
|
|
|James F. Dixon (1)(2)      | 58  | Director                                                                                                                         
|Stuart C. McCulloch (1)(2) | 70  | Director                                                                                                                         
|John R. Mackay             | 73  | Corporate Secretary                                                                                                              
|Edward J. Armstrong        | 57  | President of Silverado Green Fuel Inc.                                                                                           
|Dr. Warrack G. Willson     | 62  | Vice-President, Fuel Technology of Silverado Green
      Fuel Inc.                                                               

|(1) | Member of Silverado's Audit Committee         
|--- | ----------------------------------------------
|(2) | Member of Silverados Compensation
  Committee

Set forth below is a brief description of the background and
business experience of each of our executive officers and directors for the past
five years:

Garry L. Anselmo

Mr. Anselmo is presently the chairman of our board of directors
and is our president, chief executive officer and chief financial officer. Mr.
Anselmo is also the chairman of the board of directors and the chief executive
officer and chief financial officer of our wholly owned subsidiary, Silverado
Green Fuel Inc. Mr. Anselmo has been the chairman of our board of directors and
our chief operating officer since 1973. Mr. Anselmo has been our president,
chief executive officer and chief financial officer from 1973 to 1994 and from
1997 to present. Mr. Anselmo founded Tri-Con Mining Ltd., a private exploration
service company, in 1968, and is currently a shareholder, director, and
president of Tri-Con Ltd. He is also the chairman and director of Tri-Con Ltd.s
United States operating subsidiaries, Tri-Con Mining Inc. and Tri-Con Mining
Alaska Inc. Mr. Anselmo obtained his bachelor of arts degree from Simon Fraser
University in British Columbia, Canada.

James F. Dixon

Mr. Dixon has been one of our directors since May 6, 1988. Mr.
Dixon is presently a lawyer and a partner in the law firm of Shandro Dixon
Edgson, Barristers and Solicitors, of Vancouver, British Columbia. Mr. Dixon has
been engaged in the practice of law since 1973. Mr. Dixon holds a bachelor of
commerce degree and a bachelor of law degree.

Stuart C. McCulloch

Mr. McCulloch has been one of our directors since December 14,
  1998. Mr. McCulloch is also a director of our subsidiary, Silverado Green Fuel
  Inc. Mr. McCulloch retired as district manager from Canada Safeway in January,
  1991.

- 51 -

---

John R. Mackay

Mr. Mackay has served as our corporate secretary since June 1998.
  Mr. Mackay is a lawyer who practiced as a sole practitioner from March 1993
  to June 1998 prior to joining Silverado. Prior to 1993, Mr. Mackay was a lawyer
  and partner in the law firm Davis and Company, Barristers and Solicitors, of
  Vancouver, British Columbia where he practiced for 35 years.

Edward J. Armstrong

Mr. Armstrong has been the president of our subsidiary,
Silverado Green Fuel Inc., since September 1997. Mr. Armstrong is also the
president of Tri-Con Mining Inc. and Tri-Con Mining Alaska Inc., the United
States operating subsidiaries of Tri-Con Mining Ltd. Mr. Armstrong is the holder
of a bachelor of science degree in geology from Washington State University
which he received in 1971.

Dr. Warrack G. Willson

Dr. Willson was appointed our vice-president, fuel technology,
in March 2000, to lead the conversion of the Grant Mill into a commercial level
Low-Rank Coal-Water Fuel plant. Dr. Willson received a supervisory chemical
engineering rating from the US Civil Service Commission in 1978, a PhD in
physical chemistry from the University of Wyoming in 1970 and a bachelor of arts
in chemistry and mathematics from the University of Northern Colorado in 1965.
He founded Coal-Water Fuel Services in 1994, which provides engineering services
to develop clean coal conversion projects to develop low cost and non-hazardous
alternatives to oil.

SIGNIFICANT EMPLOYEES

We do not have any other significant employees, other than our
directors and executive officers named above.

FAMILY RELATIONSHIPS

Mr. Anselmo and Mr. McCulloch, each of whom is one of our
directors, are cousins.

TERMS OF OFFICE

Our directors are elected to hold office until the next annual
meeting of our shareholders and until their respective successors have been
elected and qualified. Our executive officers are appointed by our board of
directors to hold office until their successors are appointed. The last annual
meeting of our shareholders was held on May 17, 2004.

AUDIT COMMITTEE

Our audit committee is comprised of James Dixon and Stuart
McCulloch. Our board of directors has determined that each member of our audit
committee is independent as that term is defined in Rule 121 of the American
Stock Exchange (AMEX) listing standards. Our board of directors has determined
none of the directors on our audit committee presently meets the definition of a
financial expert based on their respective experience and qualification. Our
audit committee presently does not include a member who has been determined by
our board of directors to qualify as a financial expert. Our board of
directors is presently looking for a suitable candidate to join as a member of
our board of directors and who would meet the definition of financial expert.
We were unable to identify such a candidate during fiscal 2005.

CODE OF ETHICS

We adopted a Code of Ethics applicable to our Chief Executive
  Officer, Chief Financial Officer, Corporate Controller and certain other finance
  executives, which is a "code of ethics" as defined by applicable rules of the
  SEC. Our Code of Ethics is attached to this Annual Report on Form 10-KSB as
  an exhibit. If we make any amendments to our Code of Ethics other than technical,
  administrative, or other non-substantive amendments, or grant any waivers, including
  implicit waivers, from a provision of our Code of Ethics to our chief executive
  officer, chief financial officer, or certain other finance executives, we will
  disclose the nature of the amendment or waiver, its effective date and to whom
  it applies on our website at www.silverado.com or in a report on Form
  8-K filed with the SEC.

- 52 -

---

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT

Section 16(a) of the Exchange Act requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file. Based on its review of the copies of such forms received by it, the
Company believes that during the fiscal year ended November 30, 2005 all such
filing requirements applicable to its officers and directors were complied
with.

- 53 -

---

ITEM 10.     EXECUTIVE
COMPENSATION.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth certain compensation information
for Mr. Garry L. Anselmo, our chief executive officer (the name executive
officer) for the fiscal years ended November 30, 2005, 2004 and 2003.

No executive officer of the Company earned total annual salary
and bonus exceeding $100,000 during the fiscal year ended November 30, 2005.

SUMMARY COMPENSATION TABLEANNUAL
        COMPENSATION
    LONG TERM COMPENSATIONAWARDS
      PAYOUTS
      All Other Compen-
      sationName
      Title
      Year
      Salary
      Bonus
      Other 
        Annual Compen-
      sation
      RestrictedStock Awarded
      Options/ SARs * (#)
      LTIP payouts ($)Garry L. Anselmo(1)
      Director, 
        President, Chief
      Executive Officer and Chief Financial Officer
    2005 2004 2003
    $0 $0 $0
    0 0 0
    0 0 0
    0 0 0
    0 8,500,000
      3,000,000
    0 0 0
    0 0 0


|(1) | Mr. Anselmo is employed and compensated by Tri-Con Mining
      Ltd., which provides management and exploration services to us. Mr.
      Anselmo does not bill us for his time spent on our business and is not
      compensated directly or indirectly by us, other than through Tricon Mining
      Ltd. See the section of this prospectus entitled Certain Relationships and
      Related Transactions
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

STOCK OPTION GRANTS

We did not grant any stock options to our named executive
officer during our fiscal year ended November 30, 2005, as illustrated in the
following table:

**OPTION/SAR GRANTS IN LAST FISCAL
      YEAR** **(INDIVIDUAL GRANTS)**Name
      Number of 
        Securities
      Underlying Options Granted
      % of Total Options
      Granted to Employees
      Exercise Price (per
      Share)
      Expiration DateGarry L. Anselmo, 
        Director, President, Chief
      Executive Officer and Chief Financial Officer
      Nil
      Not Applicable
      Not Applicable
      Not Applicable


- 54 -

---

Subsequent to the end of our fiscal year, we granted options to
purchase an aggregate of 30,000,000 shares to certain of our insiders on January
4, 2006 as follows. All options are fully vested and are exercisable at a price
of $0.05 per share for a seven year term from the date of grant, being January
4, 2013:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    15,000,000James Dixon, Director
    3,000,000Stuart McCulloch, Director
    3,000,000John McKay, Secretary
    2,000,000Ed Armstrong, President of Silverado Green Fuel
      Inc.
    4,000,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    3,000,000


EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION
VALUES

The following is a summary of the share purchase options
exercised by our named executive officer for our fiscal year ended November 30,
2005:

**AGGREGATED OPTION/SAR EXERCISES DURING
      THE LASTFINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR
      VALUES**Name (#)
      Common Shares
      Acquired on Exercise
      Value
      Realized ($)
      Unexercised
      Options at Financial Year-End (#) exercisable /
      unexercisable
      Value of Unexercised
        
        In-The-Money Options/SARs at Financial Year-End ($)
      exercisable / unexercisableGarry L. Anselmo, Director, President, Chief
      Executive Officer and Chief Financial Officer
      NIL
      NIL
      11,500,000/NIL
      $NIL/ $NIL


LONG-TERM INCENTIVE PLANS

We do not have any long-term incentive plans, pension plans, or
similar compensatory plans for our directors or executive officers.

COMPENSATION OF DIRECTORS

Our directors are not paid any compensation for acting as our
  directors. However, we periodically grant stock incentive options to our directors
  in consideration for them providing their services as directors. Our 2003 Stock
  Option Plan, our 2004 Stock Option Plan and our 2006 Stock Option Plan each
  permit the grant of incentive stock options to our directors.

- 55 -

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REPRICING OF STOCK OPTIONS

Effective January 4, 2006, we reduced the exercise price of previously
  outstanding options held by certain of our insiders to purchase an aggregate
  of 6,000,000 shares from $0.13 per share to $0.05 per share as follows. All
  options are fully vested and are exercisable at a price of $0.05 per share for
  a seven year term from the date of grant, being December 4, 2008:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    3,000,000James Dixon, Director
    500,000Stuart McCulloch, Director
    500,000John McKay, Secretary
    0Ed Armstrong, President of Silverado Green Fuel
      Inc.
    1,500,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    500,000


Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 5,680,000 shares from $0.13 per share to $0.05 per share as
follows. All options are fully vested and are exercisable at a price of $0.05
per share for a seven year term from the date of grant, being January 8,
2011:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    2,500,000James Dixon, Director
    800,000Stuart McCulloch, Director
    600,000John McKay, Secretary
    0Ed Armstrong, President of Silverado Green Fuel
      Inc.
    1,280,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    500,000


Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 15,000,000 shares from $0.10 per share to $0.05 per share as
follows. All options are fully vested and are exercisable at a price of $0.05
per share for a seven year term from the date of grant, being July 8, 2011:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    6,000,000James Dixon, Director
    2,000,000


- 56 -

---

NAME
    NUMBER OF OPTIONSStuart McCulloch, Director
    1,500,000John McKay, Secretary
    1,500,000Ed Armstrong, President of Silverado Green Fuel
      Inc.
    2,500,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    1,500,000


Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 550,000 shares from $0.10 per share to $0.05 per share as follows.
All options are fully vested and are exercisable at a price of $0.05 per share
for a term expiring December 10, 2006:

NAME
    NUMBER OF OPTIONSJames Dixon, Director
    500,000Stuart McCulloch, Director
    50,000


CHANGE IN CONTROL ARRANGEMENTS

We have entered into compensation agreements with two of our
directors. The agreements provide for severance arrangements where change of
control of Silverado occurs, as defined, and the directors are terminated. The
compensation payable to Mr. Garry L. Anselmo would include a lump sum payment of
$4,000,000 plus the amount of annual bonuses that Mr. Anselmo would be entitled
to receive for the eighteen month period following termination, plus benefits
for the eighteen month period following termination. The compensation payable to
Mr. James Dixon would include a lump sum payment of $100,000 plus the amount of
annual bonuses that Mr. Dixon would be entitled to receive for the eighteen
month period following termination, plus benefits for the eighteen month period
following termination. The compensation that would be payable to the directors
aggregates $4,100,000 plus the amount of annual bonuses and other benefits that
they would have received in the eighteen months following termination.

EMPLOYMENT CONTRACTS

We are not party to any employment contracts with any of our
directors or executive officers.

- 57 -

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ITEM 11.     SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information concerning
the number of the Companys common shares owned beneficially as of February 23,
2006 by: (i) each of our directors, (ii) each of our executive officers, and
(iii) our executive officers and directors as a group. No person is known to us
to beneficially own more than 5% of our outstanding common shares, other than
Mr. Anselmo. Unless otherwise indicated, the shareholders listed possess sole
voting and investment power with respect to the shares shown.

Title of Class
    Name and Address of
      Beneficial Owner
    Number of Common
      Shares
    Percentage of Common
      Shares(1)Common Shares
    Garry L. Anselmo, Director,
      President, Chief Executive Officer and Chief Financial Officer
    30,550,000(2)
    6.7%Common Shares
    James F. Dixon, Director
    7,014,484(3)
    1.6%Common Shares
    Stuart McCulloch, Director
    5,683,400(4)
    1.3%Common Shares
    John R. Mackay Secretary
    3,600,000 (5)
    0.8%Common Shares
    Edward Armstrong President of
      Silverado Green Fuel Inc.
    11,285,000 (6)
    2.6%Common Shares
    Warrack Willson Vice-President of
      Silverado Green Fuel Inc.
    6,750,000 (7)
    1.6%Common Shares
    All Directors and Executive
      Officers as a Group (6 persons)
    64,882,884 (8)
    13.3%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 58 -

---

|    | outstanding on February 23, 2006. As of January 31, 2006,
      there were 430,949,222 shares issued and outstanding.                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                 
|(2) | Consists of 4,050,000 shares held by Garry L. Anselmo, 7
      shares owned by Tri-Con Mining Ltd, and 26,500,000 shares that can be
      acquired by Mr. Anselmo upon exercise of options to purchase shares held
      by Mr. Anselmo within 60 days of the date hereof.                                     
|    |                                                                                                                                                                                                                                                                                                                 
|(3) | Consists of 214,484 shares held directly and indirectly
      by James F. Dixon and 6,800,000 shares that can be acquired by Mr. Dixon
      upon exercise of options to purchase shares held by Mr. Dixon within 60
      days of the date hereof.                                                             
|    |                                                                                                                                                                                                                                                                                                                 
|(4) | Consists of 33,400 shares held by Stuart McCulloch and
      5,650,000 shares that can be acquired by Mr. McCulloch upon exercise of
      options to purchase shares held by Mr. McCulloch within 60 days of the
      date hereof.                                                                            
|    |                                                                                                                                                                                                                                                                                                                 
|(5) | Consists of 100,000 shares held by Mr. Mackay and
      3,500,000 shares that can be acquired by Mr. Mackay upon exercise of
      options to purchase shares held by Mr. Mackay within 60 days of the date
      hereof.                                                                                       
|    |                                                                                                                                                                                                                                                                                                                 
|(6) | Consists of 2,005,000 shares held by Mr. Armstrong and
      9,280,000 shares that can be acquired by Mr. Armstrong upon exercise of
      options to purchase shares held by Mr. Armstrong within 60 days of the
      date hereof.                                                                            
|    |                                                                                                                                                                                                                                                                                                                 
|(7) | Consists of 1,200,000 shares held by Dr. Willson and
      5,550,000 shares that can be acquired by Dr. Willson upon exercise of
      options to purchase shares held by Dr. Willson within 60 days of the date
      hereof.                                                                                  
|    |                                                                                                                                                                                                                                                                                                                 
|(8) | Consists of 7,602,891 shares held by our directors and
      executive officers and 57,380,000 shares that can be acquired by our
      directors and executive officers upon exercise of options to purchase
      shares held by our directors and executive officers within 60 days of the
      date hereof.
|    |                                                                                                                                                                                                                                                                                                                 

CHANGE IN CONTROL

We are not aware of any arrangement that might result in a
change in control in the future.

- 59 -

---

EQUITY COMPENSATION PLAN INFORMATION.

We have two equity compensation plans under which our common
shares have been authorized for issuance to our officers, directors, employees
and consultants, namely our 2003 Stock Option Plan and our 2004 Stock Option
Plan. Our 2003 Stock Option Plan has been approved by our shareholders. Our 2004
Stock Option Plan has not been approved by our shareholders.

The following summary information is presented for our 2003
Stock Option Plan and our 2004 Stock Option Plan as of November 30, 2005.

Number of Securities to
      be Issued Upon Exercise of Outstanding Options, Warrants and
      Rights
    Weighted-Average
      Exercise Price of Outstanding Options, Warrants and Rights
    Number of Securities Remaining
      Available for Future Issuance Under Equity Compensation Plans
      (Excluding Securities Reflected in column (a))Plan Category
    (a)
    (b)
    (c)Equity Compensation Plans Approved By
      Security Holders (2003 Stock Option Plan)
    7,500,000 Shares
    $0.125 per share
    Nil SharesEquity Compensation Plans Not Approved By
      Security Holders (2004 Stock Option Plan)
    20,000,000 Shares
    $0.086 per share
    Nil Shares


ITEM 12.     CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS.

TRI-CON MINING GROUP

We have had related party transactions with Tri-Con Mining
Ltd., Tri-Con Mining Inc., Tri-Con Mining Alaska Inc. (collectively the "Tri-Con
Mining Group"). Each of Tri-Con Mining Ltd., Tri-Con Mining Inc. and Tri-Con
Mining Alaska Inc. are owned and controlled by Mr. Garry Anselmo, our chief
executive officer and chief financial officer and the chairman of our board of
directors. We are party to three separate contracts dated January 1, 1997 with
the Tri-Con Mining Group, one with each of Tri-Con Mining Ltd., Tri-Con Mining
Inc. and Tri-Con Mining Alaska Inc.

The Tri-Con Mining Group are operations, exploration and
development contractors, and have been employed by us under contract since 1972
to carry out all of our fieldwork and to provide administrative and management
services. Under the current contract dated January 1, 1997, work is charged at
cost plus 25% for property acquisition, exploration and development and cost
plus 15% for mining operations and reclamation. Cost includes out of pocket or
actual cost plus 15% charge for office overhead including stand by and
contingencies. Capital purchases are exempt from any support charges. Services
of the directors of the Tri-Con Mining Group are charged at a rate of Cdn. $75
per hour. Services of the directors of the Tri-Con Mining Group who are also our
directors, namely Mr. Anselmo, are not charged. In addition, each agreement
requires us to pay a base fee of $10,000 CDN (equal to approximately

- 60 -

---

$8,000 US) per month to each of Tri-Con Mining Ltd., Tri-Con
Mining Inc. and Tri-Con Mining Alaska Inc. However, the Tri-Con Mining Group has
waived payment of the base fee under two of the agreements and is only paid
$10,000 CDN (equal to approximately $8,000 US) per month in total.

We are in arrears $70,282 to the Tri-Con Group as of November
30, 2005 in connection with exploration activities on the Nolan Gold Project
during fiscal 2005. At November 30, 2004, we had prepaid $532,131 to the Tri-Con
Mining Group for exploration, development and administration services to be
performed during fiscal 2004 on our behalf. For the years 2004 and 2005, the
Tri-Con Mining Groups services for the current fiscal year focused mainly on
preparation for year round production on the Nolan property, the low-rank
coal-water fuel program as well as corporate planning, exploration, engineering,
and, and administration services at both our field and corporate offices.

The aggregate amounts paid to the Tri-Con Mining Group each
year by category, including amounts relating to the Grant Mine Project and Nolan
properties, for disbursements and for services rendered by the Tri-Con Mining
Group personnel working on the Company's projects, and include interest charged
on outstanding balances at the Tri-Con Mining Group's borrowing costs are shown
below:

2005
    
    
    2004(Restated)Exploration, development and field services
    $
    673,483
    
    $
    948,729Administrative and management services
    
    687,510
    
    
    831,017Research
    
    120,293
    
    
    79,967Total
    $
    1,481,286
    
    $
    1,859,713Amount of total charges in excess of
      Tri-Concosts incurred
    $
    154,707
    
    $
    275,121Excess amount charged as a percentage of
      actual
    
    10.44%
    
    
    11.5%costs incurred


STOCK OPTIONS

Grants of Stock Options

We granted options to purchase an aggregate of 30,000,000
shares to certain of our insiders on January 4, 2006 as follows. All options are
fully vested and are exercisable at a price of $0.05 per share for a seven year
term from the date of grant, being January 4, 2013:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    15,000,000James Dixon, Director
    3,000,000Stuart McCulloch, Director
    3,000,000John McKay, Secretary
    2,000,000Ed Armstrong, President of Silverado
    4,000,000


- 61 -

---

NAME
    NUMBER OF OPTIONSGreen Fuel Inc.Warrack Willson, Vice-President of Silverado Green Fuel
      Inc.
    3,000,000


Reductions to Exercise Prices of Outstanding Stock
Options

Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 6,000,000 shares from $0.13 per share to $0.05 per share as
follows. All options are fully vested and are exercisable at a price of $0.05
per share for a seven year term from the date of grant, being December 4,
2008:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    3,000,000James Dixon, Director
    500,000Stuart McCulloch, Director
    500,000John McKay, Secretary
    0Ed Armstrong, President of Silverado Green Fuel
      Inc.
    1,500,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    500,000


Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 5,680,000 shares from $0.13 per share to $0.05 per share as
follows. All options are fully vested and are exercisable at a price of $0.05
per share for a seven year term from the date of grant, being January 8,
2011:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    2,500,000James Dixon, Director
    800,000Stuart McCulloch, Director
    600,000John McKay, Secretary
    0Ed Armstrong, President of Silverado Green Fuel
      Inc.
    1,280,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    500,000


Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 15,000,000 shares from $0.10 per share to $0.05 per share

- 62 -

---

as follows. All options are fully vested and are exercisable at
a price of $0.05 per share for a seven year term from the date of grant, being
July 8, 2011:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    6,000,000James Dixon, Director
    2,000,000Stuart McCulloch, Director
    1,500,000John McKay, Secretary
    1,500,000Ed Armstrong, President of Silverado Green Fuel
      Inc.
    2,500,000Warrack Willson, Vice-President of Silverado
      Green Fuel Inc.
    1,500,000


Effective January 4, 2006, we reduced the exercise price of
previously outstanding options held by certain of our insiders to purchase an
aggregate of 550,000 shares from $0.10 per share to $0.05 per share as follows.
All options are fully vested and are exercisable at a price of $0.05 per share
for a term expiring December 10, 2006:

NAME
    NUMBER OF OPTIONSJames Dixon, Director
    500,000Stuart McCulloch, Director
    50,000


- 63 -

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ITEM 13.     EXHIBITS

|Exhibit |                                                                                                                                                                                               
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                        
|3.1     | Articles of the Company
      (1)                                                                                                                                                             
|3.2     | Amendment to Articles of the Company
      (2)                                                                                                                                                
|3.3     | Altered Memorandum of the
      Company (3)                                                                                                                                                   
|3.4     | Amendment to Articles of the Company
      (8)                                                                                                                                                
|4.1     | Share certificate representing
      common shares of the capital of the Company (1)                                                                                                          
|10.1    | Agreement for Conditional Purchase and Sale of
      Mining Property between the Company and Roger C. Burggraf dated October 6,
      1978  Grant Mine Property (1)                          
|10.2    | Agreement for Conditional
      Purchase and Sale of Mining Property between the Company and Paul Barelka,
      Donald May and Mark Thoennes dated May 12, 1979  St. Paul Property
      (1)
|10.3    | Lease of Mining Claims with Option to Purchase
      between the Company and Alaska Mining Company, Inc. dated February 3, 1995
       Hammond Property (4)                                  
|10.4    | Change of Control Agreement
      between the Company and Garry L. Anselmo dated May, 1995(6)                                                                                                 
|10.5    | Change of Control Agreement between the Company
      and James Dixon dated May, 1995 (6)                                                                                                     
|10.6    | Amendment to Change of Control
      Agreement between the Company and Garry L. Anselmo (6)                                                                                                   
|10.7    | Operating Agreement between the Company and
      Tri-Con Mining Ltd. dated January 1, 1997 (5)                                                                                               
|10.8    | Operating Agreement between the
      Company and Tri-Con Mining Inc. dated January 1, 1997 (6)                                                                                               
|10.9    | Operating Agreement between the Company and
      Tri-Con Mining Alaska Inc. dated January 1, 1997 (6)                                                                                        
|10.10   | Contract between the Company
      and Dr. Warrack Willson dated March 19, 2001 (6)                                                                                                           
|10.11   | Equipment Lease Agreement between the Company
      and Airport Equipment Rentals Inc. dated October 11, 2002 (6)                                                                             
|10.12   | 2003 Stock Option Plan
      (7)                                                                                                                                                              
|10.13   | Form of Warrant Exercise Agreement between the
      Company and certain of the selling security holders (9)                                                                                  
|10.14   | Consultant Agreement between
      the Company and CEOcast, Inc. dated April 21, 2004 (9)                                                                                                     
|10.15   | Subscription Agreement between the Company and
      Christoph Bruning dated May 10, 2004 (9)                                                                                                 
|10.16   | Consultant Agreement between
      the Company and Smith Conciglia Consulting, Inc. dated May 16, 2004
      (9)                                                                              

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|10.17 | Form of Delay Agreement between the Company and certain
      of the Selling Shareholders.(9)                                                                                                    
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.18 | 2004 Stock Option Plan (10)                                                                                                                                                                      
|10.19 | 2006 Stock Option Plan (11)                                                                                                                                                                      
|14.1  | Code of Ethics (11)                                                                                                                                                                              
|31.1  | Certification of Chief Executive
        Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002(11)                                               
|32.1  | Certification of Chief Executive
        Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(11)

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

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ITEM 14.     PRINCIPAL ACCOUNTING FEES
AND SERVICES

The following table sets forth information regarding the amount
billed to us by our independent auditor, Berkovits, Lago & Company, LLP for
our last fiscal year ended November 30, 2005, and by our previous independent
auditor, Amisano Hanson, Chartered Accountants for our previous fiscal year
ended November 30, 2004:

Years ended
      November 302005
      2004Audit Fees:
      $35,000
      $28,400Audit Related Fees:
      $16,811
      $16,200Tax Fees:
      NIL
      NILAll Other Fees:
      NIL
      NILTotal:
      $51,811
      $44,600


Audit Fees

Audit Fees are the aggregate fees billed by our independent
auditor for the audit of our consolidated annual financial statements, reviews
of interim financial statements and attestation services that are provided in
connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-Related Fees are fees charged by our independent auditor
for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported under "Audit Fees." This category comprises fees billed for independent
accountant review of our interim financial statements and management discussion
and analysis, as well as advisory services associated with our financial
reporting.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

Our Audit Committee pre-approves all audit services to be
provided to us by our independent auditors. Our Audit Committees policy
regarding the pre-approval of non-audit services to be provided to us by our
independent auditors is that all such services shall be pre-approved by the
Audit Committee. Non-audit services that are prohibited to be provided by our
independent auditors may not be pre-approved. In addition, prior to the granting
of any pre-approval, our Audit Committee must be satisfied that the performance
of the services in question will not compromise the independence of the
independent auditors.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

SILVERADO GOLD MINES LTD.

|By:   | /s/ Garry L. Anselmo                                     
|----- | ---------------------------------------------------------
|      | Garry L. Anselmo, President                              
|      | Chief Executive Officer and Chief Financial
      Officer
|      | Director                                                 
|      |                                                          
|Date: | February 28, 2006                                        

In accordance with the Securities Exchange Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|By:   | /s/ Garry L. Anselmo                                                
|----- | --------------------------------------------------------------------
|      | Garry L. Anselmo, President                                         
|      | Chief Executive Officer and Chief Financial Officer                 
|      | (Principal Executive Officer)                                       
|      | (Principal Financial Officer and Principal Accounting
      Officer)
|      | Director                                                            
|      |                                                                     
|Date: | February 28, 2006                                                   
|      |                                                                     
|      |                                                                     
|By:   | /s/ James F. Dixon                                                  
|      | James F. Dixon                                                      
|      | Director                                                            
|      |                                                                     
|Date: | February 28, 2006                                                   
|      |                                                                     
|      |                                                                     
|By:   | /s/ Stuart McCulloch                                                
|      | Stuart McCulloch                                                    
|      | Director                                                            
|      |                                                                     
|Date: | February 28, 2006                                                   

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