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

FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the fiscal year ended: November 30, 2006

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to
____

Commission File Number 0-12132

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

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

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

Securities registered under Section 12(b) of the Exchange Act:
None. Securities registered under Section 12(g) of the Exchange Act: Common
Stock, no par value.

|Title of each class        | Name of each exchange on which registered
|-------------------------- | -----------------------------------------
|Common Stock, no par value | None                                     

Check whether the issuer is not required to file reports pursuant to Section
  13 or 15(d) of the Exchange Act. [ ]

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 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. [ ]

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: $0

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: $79,795,007 as of February 21, 2007.

The number of shares outstanding of each of the issuers classes of common
  equity, as of the latest practicable date: 638,360,052 common shares, no par
  value, outstanding as of March 5, 2007.

Documents Incorporated By Reference: None.

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

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PART 1

|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, and 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

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

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

SILVERADO has been working for six years through its Low-Rank
Coal-Water Fuel (Green Fuel) division on the development of Green Fuel, a
non-toxic liquid fuel product derived from sub-bituminous and lignite coal. In
its finished form the fuel is a non-toxic, non-hazardous environmentally
friendly strategic (liquid) fuel. Silverado is seeking financing to enable us to
proceed with the construction of a commercial demonstration facility designed to
document the combustion characteristics of Green Fuel. A successful
demonstration project could lead to construction of a commercial production
facility to manufacture the low-rank coal-water fuel as a replacement for oil
fired boilers and utility generators. In addition we look forward to our
continued planning and progress designed to create a secondary fuel and other
product facility designed to gasify and liquefy our green fuel to facilitate the
creation of low cost rocket fuel, aviation fuel, gasoline, diesel fuel,
synthetic natural gas, synthetic petrochemical feedstocks, hydrogen for fuel
cells, plastic, fertilizers, explosives, urea, ammonia CO2 for enhanced recovery
in oil well production as well as a host of other products, all free of sulphur,
heavy metals and particulate matter.

- 2 -

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CORPORATE ORGANIZATION

Silverado Gold Mines Ltd. was incorporated under the laws of
British Columbia, Canada in June 1963. Silverado operates in the United States
through its wholly owned subsidiaries, Silverado Gold Mines Inc., (incorporated
May 29, 1981) and Silverado Green Fuel Inc. (incorporated August 14, 2006).We filed a transition application and notice of articles with the British
Columbia Registrar of Companies on April 20, 2004 in order to replace our former
memorandum adopted under the British Columbia Company Act and to alter our
current articles to the extent necessary to ensure compliance with the British
Columbia Business Corporations Act (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 effect transition under the BC Business Corporations Act
by filing with the British Columbia Registrar of Companies a transition
application and notice of articles within two years following the coming into
force of the BC Business Corporations Act.

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

MINERAL EXPLORATION BUSINESS

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

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

PLAN OF OPERATIONS

|1 | Nolan Gold Project
|- | ------------------

The Nolan Gold Project consists of two areas of exploration and
development. The Nolan Placer Gold project involves exploration and development
of gold occurring in placer deposits such as stream channels or ancient remnants
of placer gold deposits. The second part of the project is the Nolan Lode Gold
Project. The lode gold project consists of exploration work designed to locate
bedrock structures or formations of bedrock which host gold mineralization. The
two facets of the Nolan Gold Project, complement each other, as every stone or
pebble in a placer deposit is a piece of rock eroded from some near or distant
bedrock formation, each gold nugget or grain of gold in a placer deposit was
originally part of a bedrock formation or structure with lode gold
mineralization. The search for a lode source is unravelling the sequences of
events that caused a placer deposit to form. During the summer of 2007, we will
be removing scrap materials, sealing the Swede Channel portal and covering
tailing ponds as part of four reclamation obligations with the Bureau of Land
Management.

- 3 -

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|1.1 | Swede Channel and Marys East bulk sampling
      projects
|--- | ----------------------------------------------------------

The Swede Channel Placer Gold Deposit (Swede Channel) is a
glacial drainage perched several hundred feet above the Nolan Creek Valley.
During the ice age, a glacial event caused the Swede Gulch to rapidly erode a
deep, narrow water channel across earlier gold bearing river gravel deposits.
Erosion and transportation caused the gold bearing gravel to be re-concentrated
due to removal of the lighter gangue minerals, while much of the heavier gold,
along with boulders and coarse gravel common to a high energy drainage
environment, was deposited to the Swede Channel. Subsequent post glacial uplift
and erosion has established the present topography including the perched Swede
Channel location on the westerly flank of Smith Dome, and overlain by up to 100
feet of overburden making it an unidentifiable surface topographic expression.

The Marys East Placer Gold Deposit (Marys East) is located
a few hundred yards northeast of the Swede Channel and directly east of Marys
Bench Placer Gold Deposit. Marys Bench was mined by underground methods during
the winter of 1993-1994. The Marys Bench winter stockpile from 1993-1994
contained 16,123 Bank Cubic Yards (BCY) of gravel, and was sluiced in the summer
of 1994. Processing the gravel yielded 2,697 troy ounces of gold nuggets and
dust.

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.

|1.1.1 | Swede Channel and Marys East 2006 Work
|----- | ---------------------------------------

During the winter of 2005, Silverado began an underground
exploration and development program on the Swede Channel. Continuing into 2006,
Silverado installed about 900 feet of exploration drifts by underground
tunnelling methods into the Swede Channel. Prior bulk sampling had shown the
channel to contain gold in the basal gravels, so the project was designed to
obtain a large bulk sample from the tunnel being advanced into the channel. The
2005-2006 winter stockpile contained 8,896 loose cubic yards (LCY) of gravel
material, and was processed from June 28th through July 20thof 2006, yielding 939.07 troy ounces of gold nuggets and dust. The Swede
portal was re-opened in early November of 2006, and gravel extraction is
expected to continue into January of 2007.

The Marys East was discovered through drilling during 2004.
Subsequent infill drilling during 2006 showed a bedrock shelf perched about 40
feet higher in elevation than the Marys Bench deposit, and to host a gold
bearing gravel layer at the bedrock contact. Ten holes were drilled during 2006,
and seven of the ten holes identified a gold bearing layer 3 to 10 feet thick
with significant to exceptional gold values. (See Table 1.) A plan to install a
portal and remove a large bulk sample will commence during January of 2007.

- 4 -

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Table 1. 2006 drill holes in Marys East with intercepts
  greater than 0.03 troy ounces gold per BCY

|ROTARY      | INTERSECTION DEPTH |                    | TROY OUNCES GOLD PER 
|----------- | ------------------ | ------------------ | ---------------------
|DRILLHOLE # | FROM
      SURFACE | SAMPLE
      WIDTH | BANK
      CUBIC YARD
|            |                    |                    |                      
|06MB22      | 40 - 45 ft         | 5 ft               | 0.17                 
|06MB22      | 40 - 50 ft         | 5 ft               | 1.72                 
|06MB23      | 45 - 50 ft         | 5 ft               | 0.13                 
|06MB24      | 45 - 48 ft         | 3 ft               | 0.04                 
|06MB26      | 30 - 35 ft         | 5 ft               | 0.07                 
|06MB26      | 35 - 40 ft         | 5 ft               | 0.77                 
|06MB27      | 25 - 30 ft         | 5 ft               | 0.52                 
|06MB28      | 30 - 32 ft         | 2 ft               | 0.07                 
|06MB29A     | 18 - 22 ft         | 4 ft               | 0.03                 

|1.1.2 | Swede Channel and Marys East 2007 Work Plan
|----- | --------------------------------------------

During 2007, the remaining sections of the Swede Channel will
be removed by underground retreat mining methods, and stockpiled for summer
processing. It is estimated that up to 12,000 LCY will be stockpiled from the
remaining Swede Channel. The Swede project is expected to be completed by the
middle of January 2007. During early January 2007, crews installed an adit into
Marys East, and began an underground drift into the Marys East deposit. This
will be a horizontal opening utilizing the same equipment as was used for the
Swede Channel. The tunnel will be advanced as far into the deposit as time will
permit before the warm spring weather arrives. The portals will be sealed for
the summer, and the Swede and Marys East stockpiles will be processed at the
existing sluice plant location, which was installed in 2006. The sluicing
operations during 2007 will be a turn key operation as the necessary equipment,
pipelines and pond systems remain in place from 2006 operations.

Reclamation will be an ongoing summer project with a goal to
reclaim at least 10 acres of the project. Once the fall freeze up arrives, the
Marys East portal will be re-opened and underground work will continue through
2007 year end.

Budget projections for this project are detailed under the
section Projected Annual Budget for 2007.

There is no assurance that either the Swede Channel or the
Marys East Bulk sampling projects will recover gold with a value greater than
the costs associated with extraction and processing.

|1.2   | Nolan Gold Project Exploration    
|----- | ----------------------------------
|      |                                   
|1.2.1 | Nolan Placer Gold Exploration
2006

During 2006, 39 placer exploration drill holes with a total of
2,070 feet were completed. Drilling was allocated to infill drilling in the
Marys East area (10 holes), Swede Channel - Marys Bench area (20 holes), and
the newly acquired Topnotch Prospect (9 holes). The drill samples were processed
on site by industry accepted standard gravity methods.

|1.2.2 | Nolan Placer Gold Exploration 2007 Work Plan
|----- | --------------------------------------------

During 2007, as many as 140 drill holes are planned to be drilled
  for placer exploration. The drilling will be performed by drill contractors,
  and is planned to be concentrated along the left limit of Nolan Creek to explore
  the north, east, and south of the Marys East and Swede Channel deposits.
  In fill drilling will take place within the area between the Marys East/Swede
  Channel and the Topnotch Prospect. All of the targets are well above the elevation
  of Nolan Creek.

- 5 -

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Workman Bench, located near the confluence of Smith and Nolan Creek, which
  was mined on a small scale during 1999-2000, will also be drilled to fill in
  information gaps identified from prior drilling in this area. Budget projections
  for this project are detailed under the section Projected Annual Budget
  for 2007.

There is no assurance a commercially viable placer gold deposit
will be developed as a result of this drilling.

|1.3   | Nolan Lode Gold Exploration     
|----- | --------------------------------
|      |                                 
|1.3.1 | Nolan Lode Gold Exploration 2006

During 2006, three dimensional modelling programs were used to
integrate all past lode exploration information. One 45 degree angle drill hole
was completed to 300 feet of down dip length, and three lode exploration
trenches for a total of 920 feet were completed during 2006. The trenching was
undertaken to investigate gold bearing antimony-quartz vein systems in an area
north of Smith Creek. This area is part of the Solomon Shear, a five mile long
gold bearing shear zone, which is a possible source of placer gold in the Nolan
valley drainages, and bench deposits such as Swede Channel, Marys East Bench,
Marys Bench, Eureka Bench, and Workmans Bench.

Trenching successfully identified three lode zones that contain
antimony-gold-quartz veins. The main zone has a width of 190 feet (60m). The
widths of the antimony-gold-quartz veins within the main zone (Sb-Au-Qtz veins)
vary, from a quarter inch to seven inches. Spacing of veins also varies, from a
quarter inch to several feet.

A total of 71 rock samples were collected during the trenching
campaign and submitted to ALS Chemex in Fairbanks Alaska for analysis. Out of
these 71 samples, 32 samples show gold values higher than 0.3 g/t, ranging from
0.307 g/t Au to 25.8 g/t Au (see Table 1.3.1) . 29 of the 71 trench samples show
antimony values higher than 0.1%, ranging from 0.1% Sb to more than 5% Sb. A
total of 13 samples show antimony values higher than 5%. This indicates high
grade antimony ore which would be a valuable co-product along with the gold. A
summary of results is included in Table 1.3.1.

Table 1.3.1. 2006 trench sample results of 0.3 g/t Au and
higher.

Sample #
    Sample Width
    Au g/t (grams/tonne)
    Au opt (troy oz/ton)
    Sb %06ST001
    1 ft
    4.630
    0.15
    19.9606ST002
    1 ft
    1.515
    0.05
    35.7706ST003
    1 ft
    0.398
    0.01
    1.7306ST010
    5 ft
    0.680
    0.02
    6.5906ST016
    10 ft
    0.319
    0.01
    0.0306ST019
    5 ft
    0.997
    0.03
    0.0906ST023
    10 ft
    0.307
    0.01
    0.1106ST025
    5 ft
    1.785
    0.06
    8.2806ST026
    1 ft
    0.800
    0.03
    0.8506ST027
    1 ft
    3.590
    0.12
    31.8706ST028
    1 ft
    4.280
    0.14
    3.0506ST029
    1 ft
    0.311
    0.01
    0.206ST030
    1 ft
    0.774
    0.03
    34.9606ST031
    1 ft
    1.135
    0.04
    2.35


- 6 -

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06ST032
    1 ft
    2.210
    0.07
    8.0706ST036
    10 ft
    0.409
    0.01
    0.0206ST049
    10 ft
    0.485
    0.02
    0.7106ST051
    10 ft
    0.305
    0.01
    0.0206ST054
    10 ft
    0.368
    0.01
    0.0206ST056
    1 ft
    0.562
    0.02
    0.0406ST057
    1 ft
    0.848
    0.03
    0.0106ST058
    1 ft
    0.641
    0.02
    40.8606ST061
    1 ft
    25.800
    0.83
    20.1806ST062
    1 ft
    3.080
    0.10
    3.406ST063
    1 ft
    2.960
    0.10
    8.4306ST064
    1 ft
    3.290
    0.11
    0.1906ST066
    1 ft
    4.110
    0.13
    17.4206ST067
    1 ft
    3.720
    0.12
    0.0806ST068
    1 ft
    1.060
    0.04
    1.4106ST069
    2 ft
    0.575
    0.02
    0.106ST070
    8 ft
    1.555
    0.05
    0.0806ST071
    1 ft
    1.375
    0.05
    46.33


|1.3.2 | Nolan Lode Gold Exploration 2007 Work Plan
|----- | ------------------------------------------

During 2007, lode exploration work will consist of both
drilling and trenching. A minimum of five trenches will be excavated to expose
the underlying bedrock in areas which have yielded encouraging results from
geologic, geochemical and geophysical investigations. The trenches will be
mapped and sampled in detail. This information will be integrated and useful in
the selection targets for lode exploration drilling. Once trenching sample data
has been analyzed and integrated with existing data, a series of drill holes
will be drilled to identify bedrock structures and any associated mineralized
bedrock formations. Drilling methods may include either rotary drilling or core
drilling.

All laboratory analytical work will be performed by an outside
certified assay laboratory. Samples from all areas are carefully collected and
transported under a chain of custody system to ensure sample integrity. Sample
splits are retained by the company for verification and additional testing, if
necessary. The total amount of lode exploration drilling performed during 2007
will be determined early in the year, and are contingent on funding availability
and the quantity and extent of drill targets developed during the trenching
phase of the program.

Budget projections for this project are detailed under the
section Projected Annual Budget for 2007.

There is no assurance that a commercially viable lode gold
bearing mineral deposit exists on the Nolan Gold Project. Further exploration
will be required before sufficient information is available to determine the
presence of a lode gold deposit at Nolan. Even if a lode gold occurrence exists
on the property, there is no assurance that it would be economically feasible as
an ore deposit.

|2   | Ester Dome Property          
|--- | -----------------------------
|    |                              
|2.1 | Ester Dome Property 2006 Work

The properties comprising our Ester Dome gold project are
discussed in detail under the heading Description of Properties in this annual
report. During 2006, reclamation work was completed on the Ester Dome Property.
The work consisted of backfilling open cuts which were excavated during
operations conducted to supply gold bearing rock to our Grant Mill Facility. The
Ethel and Elmes pits were backfilled with an estimated 200,000 cubic yards of
stockpiled waste rock, and then covered with a layer of stockpiled organic
material to facilitate re-vegetation. In addition, all remaining exploration
trenches were backfilled, stabilized, and seeded to resist surface erosion.
Annual assessment work was

- 7 -

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completed and all claim rental payments were made to maintain
the property in good standing. Fairbanks North Star Borough taxes were paid on
the mill facility and mine facilities in the sum of $9,400.44.

|2.2 | Ester Dome Property 2007 Work Plan
|--- | ----------------------------------

During 2007, we plan to complete the closure of the Grant Mill
Tailings Pond. This pond is filled to capacity, and will be capped and
decommissioned after a final approval of the tailings pond closure plan is
received from State of Alaska regulatory agencies. A meaningful program will be
completed during the summer months to explore for and identify small high-grade
gold anomalies as well as larger low-grade gold anomalies. Several large scale
projects have been proposed over the past ten years, but shelved either as a
result of poor market conditions or due to internal decisions to favour shifting
financial and manpower resources to the Nolan Project.

One project being considered is environmentally friendly
bio-degradable urea heap leaching of crushed and agglomerated gold ore after
coarse gold has been recovered from the crushed ore by conventional gravity and
water methods. A second project being studied involves mining of the Odea
structure by underground methods. All past mining stopped at the 200 foot level
of the workings, which is just above the water table. Close spaced diamond
drilling between the 200 foot and 1,000 foot levels prove the existence of
several significant high grade ore shoots within the ODea breccia zone.

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 2007.

|3   | Hammond Property          
|--- | --------------------------
|    |                           
|3.1 | Hammond Property 2006 Work

A total of 39 drillholes were completed at Slisco Bench during
our exploration program during the summer of 2006. These holes were drilled with
a Schramm all terrain reverse circulation drill rig. All holes penetrated
bedrock for a total of 4,782 feet drilled with sample intervals ranging from 5
to 10 feet in length. The entire sample was processed through an on-site Denver
Gold saver to produce a mineral concentrate (sulfides, heavy rock particles +/-
gold). This concentrate was bagged, labelled, and transported to our onsite lab
for panning and assay turn around. All gold particles and nuggets observed were
weighed.

Drill results confirm the presence of gold in areas of previous
drilling and have identified a channel containing placer gold that extends for a
length of over 1,800 feet. The channel remains open to the southeast and there
is evidence of one or more tributary channels that remain to be explored in the
near future. Within the Slisco Channel, the placer gold occurs on bedrock and on
a second horizon about 20 feet above the bedrock channel. Pay layer thicknesses
range from 5 to 10 feet. To date, 20 out of 39 drill holes have been processed
and analyzed for placer gold. Out of these 20, 11 drill holes show visible gold
with values ranging from 0.009 to 0.495 troy ounces per bank (inplace) cubic
yard (TO/BCY). Table 1 presents results of 0.01 troy ounces per bank (inplace)
cubic yard (TO/BCY).

- 8 -

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Table 1: 2006 Slisco Bench drill results of 0.01 troy ounces
or better per BCY

|                   |                    |                    | TROY OUNCES     
|------------------ | ------------------ | ------------------ | ----------------
|                   | INTERSECTION DEPTH |                    | GOLD PER BANK   
|ROTARY DRILLHOLE # | FROM
      SURFACE | SAMPLE
      WIDTH | CUBIC
      YARD
|06SB-68            | 160 - 165 ft       | 5 ft               | 0.091           
|06SB-73            | 126 - 130 ft       | 4 ft               | 0.010           
|06SB-77            | 140 - 145 ft       | 5 ft               | 0.033           
|06SB-77            | 145 - 150 ft       | 5 ft               | 0.025           
|06SB-77            | 150 - 155 ft       | 5 ft               | 0.025           
|06SB-77            | 165 - 170 ft       | 5 ft               | 0.025           
|06SB-78            | 120 - 130 ft       | 10 ft              | 0.033           
|06SB-78            | 170 - 175 ft       | 5 ft               | 0.157           
|06SB-82            | 110 - 120 ft       | 10 ft              | 0.012           
|06SB-83            | 110 - 115 ft       | 5 ft               | 0.025           
|06SB-83            | 115 - 120 ft       | 5 ft               | 0.495           
|06SB-84            | 10 - 20 ft         | 10 ft              | 0.062           
|06SB-84            | 20 - 30 ft         | 10 ft              | 0.021           
|06SB-86            | 60 - 65 ft         | 5 ft               | 0.0083          
|06SB-88            | 85 - 90 ft         | 5 ft               | 0.0165          
|06SB-89            | 20 - 25 ft         | 5 ft               | 0.0165          
|06SB-89            | 70 - 75 ft         | 5 ft               | 0.0083          
|06SB-89            | 75 - 80 ft         | 5 ft               | 0.0083          
|06SB-89            | 95 - 100 ft        | 5 ft               | 0.0165          
|06SB-93            | 40 - 45 ft         | 5 ft               | 0.0165          
|06SB-95            | 40 - 45 ft         | 5 ft               | 0.0083          
|06SB-99            | 45 - 50 ft         | 5 ft               | 0.0083          

|3.2 | Hammond Property 2007 Work Plan
|--- | -------------------------------

The higher placer gold values in both pay layers are located
within the left limit of the Slisco Channel. In addition to the encouraging
drill results to date, the potential of extending the channel to the southeast
plus the possibility of discovering gold bearing tributary channels, make this
an exciting prospect for additional discoveries. During the summer of 2007, a
series of drill holes will be completed to explore for the extension of the
Slisco Channel to the south. Presently, it has been traced for 1,800 feet. The
drill program will also seek to define any gold bearing tributaries to the
Slisco Channel.

This project may require additional funding for the company.
Even if funding is acquired, there is no guarantee that a commercial gold
bearing placer deposit will be developed. Even if a gold bearing deposit is
developed, additional funding will be required to mine the deposit, and until a
feasibility study is completed, there is no guarantee that the deposit will be
profitable to mine.

|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. During 2006, annual assessment work was completed on the property, and
rental payments were made to keep the mining claims in good standing.

- 9 -

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|4.1 | Eagle Creek Property 2007 Work Plan
|--- | -----------------------------------

During 2007, annual assessment work will be completed on the
property to keep the mining claims in good standing. Assessment work will be
focused on the Northwest part of the claim block, where drilling and trenching
has defined an intrusive host rock, thought to be a sill, containing low grade
gold, silver and antimony mineralization. If funding permits, the company will
design a drilling program to further investigate the gold and by-product mineral
distribution of the intrusive. Additional work will also be completed on the
Number One Vein. The Number One Vein was the lode quartz gold structure which
has been mined commercially for antimony.

Completing the 2007 work plan will be contingent on available
funding. Even if funding becomes available, there is no assurance that a
commercial gold-silver-antimony deposit will be defined. A commercially viable
economic mineral deposit has not been defined on the property, and there is no
assurance that a commercially viable economic mineral deposit exists on the
property.

2007 Exploration Budget

Projected Annual Budget for Fiscal Year 2007

Nolan Gold Project

Mining-Swede Channel and Mary's East

|Salaries                                                   | $ | 126,000 |  |  |         |  | 
|---------------------------------------------------------- | - | ------- |  |  | ------- |  | 
|Wages                                                      |   | 345,000 |  |  |         |  | 
|Supplies                                                   |   | 300,000 |  |  |         |  | 
|Sundries                                                   |   | 75,000  |  |  |         |  | 
|                                                           |   |         |  |  | 846,000 |  | 
|                                                           |   |         |  |  |         |  | 
|Summer Processing and Reclamation                          |   |         |  |  |        
|                                                           |   |         |  |  |         |  | 
|Summer Processing                                          |   | 121,000 |  |  |         |  | 
|Marketing of Production                                    |   | 26,000  |  |  |         |  | 
|Underground Preparation                                    |   | 60,000  |  |  |         |  | 
|Supplies                                                   |   | 54,000  |  |  |         |  | 
|Sundries                                                   |   | 160,000 |  |  |         |  | 
|Security                                                   |   | 24,000  |  |  |         |  | 
|                                                           |   |         |  |  | 445,000 |  | 
|                                                           |   |         |  |  |         |  | 
|Drilling and Exploration Program
      - Nolan Gold Placer |   |         |  |  |        
|                                                           |   |         |  |  |         |  | 
|Salaries                                                   |   | 60,000  |  |  |         |  | 
|Wages                                                      |   | 120,000 |  |  |         |  | 
|Supplies                                                   |   | 72,000  |  |  |         |  | 
|Sundries                                                   |   | 48,000  |  |  |         |  | 
|Drilling Contractor                                        |   | 36,000  |  |  |         |  | 
|                                                           |   |         |  |  | 336,000 |  | 
|                                                           |   |         |  |  |         |  | 
|Drilling and Exploration Program- Nolan Gold Lode          |   |         |  |  |        
|                                                           |   |         |  |  |         |  | 
|Salaries                                                   |   | 140,000 |  |  |         |  | 
|Wages                                                      |   | 280,000 |  |  |         |  | 
|Supplies                                                   |   | 168,000 |  |  |         |  | 

- 10 -

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|Sundries                                         |  | 112,000 |  |  |         |               |  |  | 
|------------------------------------------------ |  | ------- |  |  | ------- | ------------- |  |  | 
|Drilling Contractor                              |  | 84,000  |  |  |         |               |  |  | 
|                                                 |  |         |  |  | 784,000 |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Permitting and Annual Regulatory
      Land Fees |  |         |  |  |         |               | 
|and Filings                                      |  |         |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Federal Mining Claim costs                       |  | 65,000  |  |  |         |               |  |  | 
|Filing Fees                                      |  | 800     |  |  |         |               |  |  | 
|Bonding and Permits                              |  | 2,000   |  |  |         |               |  |  | 
|                                                 |  |         |  |  | 67,800  |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Total Costs for the Nolan Gold
      Project     |  |         |  |  |         | **2,478,800** | 
|                                                 |  |         |  |  |         |               |  |  | 
|Ester Dome Project                               |  |         |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Reclamation                                      |  | 300,000 |  |  |         |               |  |  | 
|Exploration and Geological                       |  | 10,000  |  |  |         |               |  |  | 
|Federal Mining Claim costs                       |  | 200     |  |  |         |               |  |  | 
|State Mining Claims costs                        |  | 6,000   |  |  |         |               |  |  | 
|Filing Fees                                      |  | 400     |  |  |         |               |  |  | 
|Bonding and Permits                              |  | 1,000   |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Total Costs for the Ester Dome Project           |  |         |  |  |         | **317,600**   | 
|                                                 |  |         |  |  |         |               |  |  | 
|Eagle Creek Project                              |  |         |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Exploration and Geological                       |  | 10,000  |  |  |         |               |  |  | 
|State Mining Claims costs                        |  | 10,000  |  |  |         |               |  |  | 
|Filing Fees                                      |  | 600     |  |  |         |               |  |  | 
|Bonding and Permits                              |  | 600     |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Total Costs for the Eagle
      Creek Project    |  |         |  |  |         | **21,200**    | 
|                                                 |  |         |  |  |         |               |  |  | 
|Hammond Project                                  |  |         |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Salaries                                         |  | 10,000  |  |  |         |               |  |  | 
|Federal Mining Claim costs                       |  | 7,500   |  |  |         |               |  |  | 
|Wages                                            |  | 15,000  |  |  |         |               |  |  | 
|Drilling Contractor                              |  | 60,000  |  |  |         |               |  |  | 
|Supplies                                         |  | 18,000  |  |  |         |               |  |  | 
|Sundries                                         |  | 9,500   |  |  |         |               |  |  | 
|Filing Fees                                      |  | 400     |  |  |         |               |  |  | 
|Bonding and Permits                              |  | 1,000   |  |  |         |               |  |  | 
|                                                 |  |         |  |  |         |               |  |  | 
|Total Costs for the Hammond Project              |  |         |  |  |         | **121,400**   | 
|                                                 |  |         |  |  |         |               |  |  | 
|Total Budget All Project for Fiscal 2007         |  |         |  |  | **$**   | **2,939,000** | 

Completion of all of the projects described in the 2007 work
  plan may be contingent on additional funding. There is no assurance that additional
  funding, if required will be obtained. Even if the additional funding is obtained,
  there is no assurance that a commercial ore deposit will be developed. Revenues
  from any anticipated gold sales may be insufficient to cover the costs of the
  gold recovery.

- 11 -

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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. under the supervision of Dr. Warrack Willson, Vice-President of Fuel
Technology. The fuel product is called low-rank coal-water fuel (LRCWF or Green
Fuel), 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 Green Fuel enjoys all the benefits of liquid handling and
storage, Green Fuel allows coal to be used sight unseen and is made from coal,
Americas most abundant fossil energy resource. This fuel is produced by the
fine grinding of low-rank coal, and subsequent hydrothermal treatment of the
finely ground coal particles. Hydrothermal treatment (HT) is an advanced
technology, featuring moderate temperature/pressure, non-evaporative treatment
or hot water drying, which irreversibly removes most 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 the product retains all of
the desirable combustion characteristics of low-rank coal. When Green Fuel is
injected into a boiler, the particles ignite and burn rapidly, which leads to
little or no boiler de-rating when substituted for oil. We believe that demand
for the Green Fuel 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.

On December 18, 2006, Silverado Green Fuel Inc. announced the
signing of a Memorandum of Understanding (MOU) between Choctaw County, the
Choctaw County Economic Development District, the Mississippi Development
Authority (MDA) and Silverado Green Fuel Inc. The MOU is an agreement to build
the countrys first Low-Rank Coal-Water fuel commercial demonstration plant at
the Red Hills Ecoplex just outside of Ackerman, MS.

Under the terms of the agreement, Choctaw County Economic
Development District will provide Silverado Green Fuel Inc. a 14 acre site at
the Ecoplex. Choctaw County will clear the site in preparation for construction.
The County has also agreed to construct the plant facility building based on
Silverados specifications. The MDA will provide for the infrastructure through
a series of grants. Silverado Green Fuel Inc. will provide the proprietary
technology developed by Dr. Warrack Willson. Silverado will run the facility,
which is expected to produce hundreds of jobs during the construction phase and
45 permanent jobs.

GOVERNMENT REGULATION

Our Nolan Gold Project and our Hammond River project are 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 projects must
  be carried out through an APMA, Alaska Placer Mining Application, which is a
  permit issued by the State of Alaska and the Bureau of Land Management. Current
  exploration activities on the Nolan Gold Project are currently being carried
  out under a permit approved by the Bureau of Land Management under a 2006 plan
  of operations submitted by us to the Bureau of Land Management. A Permit for
  2007 operations was submitted during December of 2006. 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 the Fish and Game Department. 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.

- 12 -

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In addition to the federal permit, we also hold U.S.
Environmental Protection Agency water discharge permits for wastewater
discharges, which require monitoring and 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 notwithstanding our Industrial classification, 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.

Our Nolan Gold Placer Property is comprised of 197 contiguous
unpatented federal placer mining claims located within the Nolan and Hammond
River drainage systems. Silverado also holds 2 unpatented federal placer mining
claims located on Marion Creek and 5 unpatented federal placer mining claims
located on Clara Creek. Both Clara and Marion Creeks are left limit tributaries
to the Middle Fork of the Koyukuk River. The Clara Creek and Marion Creek claims
are located approximately 1.5 and 3 miles north of Coldfoot, Alaska, and are
situated near the Dalton Highway. Silverado is the registered owner of all 204
placer claims. Over the years, on this Nolan Gold Property, Silverado has
conducted operations referred to as the Nolan Deep Channel, the Smith Creek, the
Thomsons Pup, the Marys Bench, Swede Channel, Marys East, Archibald Creek,
Marys East, and Workman Bench claims, Upper Nolan Creek, Dolney Bench, West
Block, 3 B 1 on Nolan Creek, and Eureka Bench, and others. During 2006,
Silverado purchased 6 unpatented federal placer mining claims along the right
limit of Smith Creek, which are referred to as the Topnotch Property, and staked
an additional 7 placer mining claims along Smith and Swift Creeks. The main
block of contiguous Nolan Placer claims cover approximately 6 square miles of
creeks and fluvial terraces and uplands.

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.

Our Ester Dome Project is comprised of fifty-one (51) unpatented
  state mining claims and one (1) federal non-patented mining claim. State claims
  are managed by the State of Alaska. Federal claims are managed by 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 (DNR), the Department of Environmental Conservation
  (ADEC), and Fish and Game (F & G), the Bureau of Land Management (U.S. BLM),
  and the U. S. Army Corps of Engineers (ACOE). The claims which contain the Grant
  Mill facility, support structures and offices, are located inside the Fairbanks
  North Star Borough (FNSB) and are subject to annual tax assessments. During
  2006, property taxes were paid to the FNSB in the amount of $ 9,400.44.

- 13 -

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Our Eagle Creek Property is comprised of seventy-seven (77) State
  non-patented mining claims. State claims are managed by the State of Alaska.
  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,
  the Bureau of Land Management, and the U. S. Army Corps of Engineers.

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.

RESEARCH AND DEVELOPMENT EXPENDITURES

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

|                         |   | December 1, 2005     |  |   | December 1, 2004     | 
|------------------------ | - | -------------------- |  | - | -------------------- | 
|                         |   | to November 30, 2006 |  |   | to November 30, 2005 | 
|Research and Development |   |                      |  |   |                      | 
|Expenditures:            | $ | 129,698              |  | $ | 120,293              | 

Research and development activities were primarily attributable
to the pursuit of the development of our Green 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. 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 through gold
recoveries, 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.

- 14 -

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As 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 working capital of $2,689,670 as of November 30, 2006.
  We did not report revenues in our last three fiscal years ended November 30,
  2006, 2005 or 2004. Our plan of operations calls for expenditures of a minimum
  of $2,939,000 to be incurred by us over the next twelve months in order to continue
  our mining exploration activities at the Nolan Gold, Ester Dome, Eagle Creek
  and Hammond Projects. 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 may 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 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 offset 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.

- 15 -

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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 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 fewer 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 fewer
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 fewer 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 recognize 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.

- 16 -

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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 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.

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.

- 17 -

---

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 $26 million. Even if the
demonstration facility were constructed and operational, there is no assurance
that the commercial 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.

|ITEM 2. | DESCRIPTION OF PROPERTY
|------- | -----------------------

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.

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 maynot
  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.

- 18 -

---



|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:



|2. | Ownership Interest
|-- | ------------------

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:

- 19 -

---

|(a) | Nolan Gold Placer Property
|--- | --------------------------

The Nolan Gold Placer Property is comprised of 197 contiguous
unpatented federal placer mining claims located within the Nolan and Hammond
River drainage systems. Silverado also holds 2 unpatented federal placer mining
claims located on Marion Creek and 5 unpatented federal placer mining claims
located on Clara Creek. Both Clara and Marion Creeks are left limit tributaries
to the Middle Fork of the Koyukuk River. The Clara Creek and Marion Creek claims
are located approximately 1.5 and 3 miles north of Coldfoot, Alaska, and are
situated near the Dalton Highway. Silverado is the registered owner of all 204
placer claims. Over the years, on this Nolan Gold Property, Silverado has
conducted operations referred to as the Nolan Deep Channel, the Smith Creek, the
Thomsons Pup, the Marys Bench, Swede Channel, Marys East, Archibald Creek,
Marys East, and Workman Bench claims, Upper Nolan Creek, Dolney Bench, West
Block, 3 B 1 on Nolan Creek, and Eureka Bench, and others. During 2006,
Silverado purchased 6 unpatented federal placer mining claims along the right
limit of Smith Creek, which are referred to as the Topnotch Property, and staked
an additional 7 placer mining claims along Smith and Swift Creeks. The main
block of contiguous Nolan Placer claims cover approximately 6 square miles of
creeks and fluvial terraces and uplands.

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.

|(b) | Nolan Lode
|--- | ----------

The Nolan Lode claims are comprised of 309 unpatented federal
lode claims. During 2006, Silverado acquired 242 of those lode claims by a claim
staking program. Ownership of these federal lode claims is in the name of
Silverado Gold Mines Inc. This area encompasses approximately 11 square miles.

|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, Archibald
and Smith 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 these areas.

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
    0.196


- 20 -

---

YEAR
    STATUS OF OPERATIONS
    NATURE OF OPERATIONS
    LOCATION
    BCY MINED
    Tr.Oz.GOLD RECOVERED
    RECOVERED GRADE
      OZ/BCY (Bank Cubic Yards)1995
    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 Exploration
    Surface Operations
    Archibald Creek Surface
    5,947
    128
    0.0221999
    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
    0.0152006
    Test Mining During Exploration
    Underground Operations
    Swede Channel Underground
    6,843
    939
    0.137TOTALS
    
    
    
    247,292
    19,446
    0.0786


*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.

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
placer mining activities.

- 21 -

---

During the winter of 2005, Silverado began an underground
exploration and development program on the Swede Channel. Continuing into 2006,
Silverado installed about 900 feet of exploration drifts by underground
tunnelling methods into the Swede Channel. Prior bulk sampling had shown the
channel to contain gold in the basal gravels, so the project was designed to
obtain a large bulk sample from the tunnel being advanced into the channel. The
2005-2006 winter stockpile contained 8,896 loose cubic yards (LCY) of gravel
material, and was processed between June 28th through July 20thof 2006, yielding 939.07 troy ounces of gold nuggets and dust. The Swede
portal was re-opened in early November of 2006, and gravel extraction is
expected to continue into January of 2007.

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

We have spent approximately $28,500,000 over the last 19 years
acquiring, exploring and undertaking test mining activities and test exploration
on the Nolan Gold Project. Up to November 31, 2006, we have completed 721 drill
holes with a cumulative total of 43,365 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 10 lode
exploration drill holes with a cumulative total of 2,320 feet of drilling.

We also have a gold recovery facility located at the Nolan Gold
Project that is used to recover gold from gravel that we extract during test
mining activities as part of our exploration of the Nolan Gold Project. This
gold recovery facility was modernized in 2006. 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.

During the winter of 2005, Silverado began an underground
exploration and development on the Swede Channel. Continuing into 2006,
Silverado installed about 900 feet of exploration drifts by underground
tunnelling methods into the Swede Channel. Prior bulk sampling had shown the
channel to contain gold in the basal gravels, so the project was designed to
obtain a large bulk sample from the tunnel being advanced into the channel. The
2005-2006 winter stockpile contained 8,896 loose cubic yards (LCY) of gravel
material, and was processed between June 28th and July 20thof 2006, yielding 939.07 troy ounces of gold nuggets and dust. The Swede
portal was re-opened in early November of 2006, and gravel extraction is
expected to continue until the spring thaw of 2007.

The Marys East Placer Deposit was discovered by drilling in
2004. Subsequent infill drilling during 2006 showed a bedrock shelf perched
about 40 feet higher in elevation than the Marys Bench deposit, which hosted
gold bearing gravel layers at the bedrock contact. During 2006, 39 placer
exploration drill holes with a total of 2070 feet were completed. Drilling was
allocated to infill drilling in the Marys East area (10 holes), Swede Channel-
Marys Bench area (20 holes), and the newly acquired Topnotch Prospect (9
holes). The drill samples were processed on site by industry accepted standard
gravity methods.

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:

| | 1. | To identify surface or sub-surface placer deposits at
        our Nolan Gold Project that are prospective for test mining operations.
        In general, these deposits are located on 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), Lower Nolan Bench
        and Marys East including areas adjoining to the north, east and
        south. 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
        and areas adjoining north, east and south as well as, the Swede Channel
        and the areas adjoining to the east and south, 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. The newly acquired Topnotch
        property may also be a priority target during fiscal 2007.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 22 -

---

| | 2. | To determine whether there is a potential lode deposit
        of gold 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 as differentiated from placer gold which is gold that has been
        removed from its host rock by the process of erosion, our combined and
        re-concentrated down gravity drill, trench, geologic and geophysical work
        well be part of our on-going investigations to determine whether there
        exist one or more lode deposit on the Nolan Gold project that could be
        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 (deep channel) 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 and publications
as well as the trenching and exploration drilling of target areas.

|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

- 23 -

---

| | 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.

|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 prepared by Mr. W. Murton, P.
Eng., an independent qualified person under Canadian Policy NI 43  101, he
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


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.

- 24 -

---

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 ResourceWooll 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:                                                 
| | Grade:                                               

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.

- 25 -

---

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

|2. | Ownership Interest
|-- | ------------------

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, 2006, we were in arrears of required mineral
property claims and option payments of $350,000 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 group of placer gold mining claims
overlying the Slisco Bench, and located along the right limit of the Hammond
River. 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 approximately eighty thousand ounces of placer gold,
including the second largest gold nugget ever discovered in Alaska  a nugget
weighing more than 135ounces.

The Bench was first staked by Martin Slisco, and prospected by
  hand methods since the 1930s, but no commercial production was recorded.
  During the late 1970s, placer gold, including some nuggets characteristic
  of the Koyukuk Mining District were recovered by open cut prospecting and bulk
  sampling from a prospect pit at the northern end of the bench. The prospect
  pit was open to bedrock and with a nominal 20 feet of overburden exposed, indications
  were favourable for defining a large open pit mine-able placer gold deposit.
  The surface topography indicates the bench could extend up to 4,500 feet southerly
  from the prospect pit. Beyond that distance the bench is intersected by the
  present Hammond River Channel where past and ongoing erosion has removed all
  surface expression of the bench. Below that intersection, the bench has been
  eroded and during 1995, Silverado completed a Phase I drill program, completing
  64 drill holes to the south of the prospect pit. Analysis of the data from the
  Phase I program determined that the Slisco Bench surface topography conceals
  an ancient gold bearing channel. Depths of drilling to bedrock were much deeper
  than anticipated. Several hundred feet south of the prospect pit bedrock depths
  are about 60 feet below surface, increasing to more than 230 feet in depth at
  a distance of 1,200 feet south of the prospect pit. The gravel layer at bedrock
  was found to contain encouraging and sometimes, significant placer gold content
  at channel bottom intercepts.

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

During 2006, we commenced drilling along the Slisco deep
channel. By the end of fiscal 2006, an additional 39 drill holes with a total of
4,782 feet were completed. This exploration work was done to define the length
of the Slisco deep channel. Phase one and Phase two drilling, sampling, and
sample analysis of a total of 103 drill holes, has served to delineate the
Slisco deep channel for a total length of 1800 lineal feet. Surface topography
indicates that the channel could cover a length of up to 4,500 feet.

- 26 -

---

A drilling program is planned to explore the remaining 2,700
feet extending south from the present known location of the Slisco deep channel.
Additional in-fill drilling will be necessary along the length of the channel,
as well as potential gold bearing tributaries, and other areas by drilling
fences or lines of drill holes with close hole spacing across the channel
bottom. These holes will be necessary to ascertain the width of the channel, and
to collect adequate sample data at close spacing, for mining feasibility
studies. After completing the Phase one and Phase two drilling, data showed the
channel to be narrower than the surface topography indicated and bedrock depths
increased to the south. Present known maximum depth is 230 feet. We presently
estimate that as many as several hundred additional drill holes would be
necessary to fully define and evaluate the Slisco deep channel. The Slisco deep
channel is presently in a state of ongoing exploration, and there is no camp,
production facilities, or equipment located on the property. Currently, there is
no power supply to the Hammond property. All support for ongoing and planned
work on the property is currently provided from the Nolan Creek Camp.

|5. | Geology
|-- | -------

The primary areas of geological interest on the Hammond
Property are the placer gold deposits, which 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
|-- | ---------------------------------------------------

Cautionary Note to U.S. Investors concerning estimates of
Indicated 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 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
    CategoryHammond / Slisco Bench
    Right limit of Hammond River
      and right limit of Vermont Creek
    64
    42,800 BCY
    0.03 oz/BCY
    Inferred Resource


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.

- 27 -

---

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:



- 28 -

---

|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 September 1, 2007. 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 4 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 discovered Irishman Vein. This
work was all completed from the only levels established, the 50, 100 and
150levels.

- 29 -

---

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 of gold bearing rock 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 were 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
    0.083TOTALS
    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.

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.

- 30 -

---

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 drill grades and intercept
width encountered 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 which had been partially defined
by our 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 mined and 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 could 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 2006, 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 2007, our reclamation work will continue.

|(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.

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.

- 31 -

---

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.

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


- 32 -

---

|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


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

- 33 -

---

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.

- 34 -

---

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:



- 35 -

---

|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 September 1, 2007. There has been no legal survey on
  the claims. Ownership of the claims is in the name of 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, 2006, 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.

|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 2006 other than assessment work and maintenance, and none is
planned for 2007. 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.

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.

- 36 -

---

|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
$71,375 during fiscal 2006. The increase from fiscal 2005 to fiscal 2006 was
because new claims were acquired at the Nolan Gold Project. We anticipate a
similar amount as paid for fiscal 2006 will be due for fiscal 2007.

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, 2005 and fiscal 2006 and anticipate a similar amount
will be due for fiscal 2007.

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.                                                  
|                    |                                                                                                                                                
|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

- 37 -

---

|                      | 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,  | Mineral claims up to 20 acres, located on federal land
      under the U.S.                                                                                                                                                                   
|Federal Placer Claims | 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.                                                                                                                                                        
|                      |                                                                                                                                                                                                                                               
|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                                                                                                                                                                          

- 38 -

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|                    | 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* *Operations*of 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.                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Mineral resource    | National Instrument 43-101 Standards of Disclosure for
      Mineral *Projects*of 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                                                                                                                                                                                                                                                                                                                                                                                           

- 39 -

---

|                   | 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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

- 40 -

---

|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.                                     
|                     |                                                                                                            
|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.                                  

|ITEM 3. | LEGAL PROCEEDINGS.
|------- | ------------------

We currently are not a party to any pending legal proceedings
and, to our knowledge, no material 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, 2006.

- 41 -

---

PART II

|ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
      AND **SMALL BUSINESS ISSUER PURCHASES OF EQUITY
      SECURITIES**
|------- | ------------------------------------------------------------------------------------------------------------------------------

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 range of high and low bid information of our common shares for each quarter
within the last two fiscal years:

|OTCBB:            |          |        
|----------------- | -------- | -------
|QUARTER ENDED     | HIGH BID | LOW BID
|                  |          |        
|November 30, 2004 | $0.07    | $0.06  
|February 28, 2005 | $0.09    | $0.05  
|May 31, 2005      | $0.07    | $0.03  
|August 31, 2005   | $0.07    | $0.03  
|November 30, 2005 | $0.07    | $0.04  
|February 28, 2006 | $0.21    | $0.05  
|May 31, 2006      | $0.17    | $0.10  
|August 31, 2006   | $0.11    | $0.06  
|November 30, 2006 | $0.08    | $0.05  
|                  |          |        
|BERLIN:           |          |        
|QUARTER ENDED     | HIGH BID | LOW BID
|                  |          |        
|November 30, 2004 | $0.05    | $0.05  
|February 28, 2005 | $0.07    | $0.03  
|May 31, 2005      | $0.05    | $0.03  
|August 31, 2005   | $0.05    | $0.03  
|November 30, 2005 | $0.06    | $0.03  
|February 28, 2006 | $0.15    | $0.04  
|May 31, 2006      | $0.13    | $0.08  
|August 31, 2006   | $0.08    | $0.04  
|November 30, 2006 | $0.06    | $0.04  
|                  |          |        
|FRANKFURT:        |          |        
|QUARTER ENDED     | HIGH BID | LOW BID
|                  |          |        
|November 30, 2004 | $0.05    | $0.05  
|February 28, 2005 | $0.07    | $0.04  
|May 31, 2005      | $0.05    | $0.03  
|August 31, 2005   | $0.05    | $0.03  
|November 30, 2005 | $0.06    | $0.03  
|February 28, 2006 | $0.16    | $0.04  
|May 31, 2006      | $0.13    | $0.07  
|August 31, 2006   | $0.08    | $0.05  
|November 30, 2006 | $0.06    | $0.04  

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.

- 42 -

---

HOLDERS OF COMMON SHARES

As at March 5, 2007,we had 638,360,052common
  shares issued and outstanding that was held byapproximately 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.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS

Set forth in the table below is information regarding awards
made through equity compensation plans through November 30, 2006, for our last
two fiscal years.

Equity Compensation Plan Information

|                                   | Number of            |                      |              
|---------------------------------- | -------------------- | -------------------- | -------------
|                                   | securities to be     | Weighted-            | Number of    
|                                   | issued upon          | average exercise     | securities   
|                                   | exercises of         | price of outstanding | available for
|                                   | outstanding options, | options, warrants,   | future plan  
|Plan Category                      | warrants, and rights | and rights           | issuance     
|Equity compensation plans approved |                      |                      |              
|by security
      holders          | N/A                  | N/A                  | N/A          
|                                   |                      |                      |              
|Equity compensation plans not      |                      |                      |              
|approved by shareholders           |                      |                      |              
|                                   |                      |                      |              
|2006 Stock Option Plan             | 31,100,000           | $0.05                | 5,900,000    
|2006-II
      Stock Option Plan    | 27,300,000           | $0.07                | 700,000      

On January 4, 2006, our Board of Directors adopted the 2006
Stock Option Plan (the "2006 Plan"). The 2006 Plan authorizes the issuance of
options to purchase our common stock to directors, officers, employees, and
eligible consultants. We reserved 37,000,000 shares of our Common Stock for
awards to be made under the 2006 Plan. On April 11, 2006, we filed a
registration statement on Form S-8 to register all 37,000,000 of such shares.
The 2006 Plan is to be administered by a committee of two or more members of the
Board of Directors. The 2006 Plan allows for the issuance of incentive stock
options (which can only be granted to employees) and non-qualified stock
options. The committee shall determine the type of option granted, the exercise
price, the option term (which may be no more than ten years), and terms and
conditions of exercisability.

On March 29, 2006, our Board of Directors adopted the 2006-II
Stock Option Plan (the "2006-II Plan"). The 2006-II Plan authorizes the issuance
of options to purchase our common stock to directors, officers, employees, and
eligible consultants. We reserved 28,000,000 shares of our Common Stock for
awards to be made under the 2006-II Plan. On March 31, 2006, we filed a
registration statement on Form S-8 to register all 28,000,000 of such shares.
The 2006-II Plan is to be administered by a committee of one or more members of
the Board of Directors, and Mr. Garry L. Anselmo and Mr. James F. Dixon were
named members of the committee charged with administering the 2006-II Plan. The
2006-II Plan allows for the issuance of incentive stock options (which can only
be granted to employees) and non-qualified stock options. The committee shall
determine the type of option granted, the exercise price, the option term (which
may be no more than ten years), and terms and conditions of exercisability.

- 43 -

---

RECENT SALES OF UNREGISTERED SECURITIES

We have not sold any unregistered securities during the last
fiscal year other than those previously reported in Quarterly Reports on Form
10-QSB or Current Reports on Form 8-K and filed with the Securities and Exchange
Commission.

|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 exploration program is to continue with the
mining of the Swede Channel, then move our underground operations into the
Marys East deposit. We will install an adit into Marys East, and continue to
drift into the bench of gold bearing placer gravel which has been defined by
drilling. This underground work will continue until approximately the Middle of
March, 2007, or until the ambient air temperature reaches a temperature too warm
to ventilate the frozen underground workings. The underground workings will be
sealed to prevent thawing of the permafrost tunnels. The underground work and
stockpiling of gold bearing gravel will recommence when the freezing
temperatures return late in the fall or early winter of 2007. During the spring
and summer months, work at the Nolan Project will include processing the
stockpiled gravel from the Swede Channel and Marys East through the sluice
plant, which is installed and ready for operation. Sluicing will begin during
June, or when the stockpiles have been sufficiently thawed to ensure liberation
of gold from the gravel and sand matrix. Gold will be inventoried and prepared
for marketing once the processing operations are completed. Reclamation work
will be in progress throughout the summer and into fall. Our objective will be
to reclaim 10 acres of disturbed surface area, while limiting 2007 surface
disturbance to 5 acres or less. We work closely with the government agencies
responsible for managing the lands that we work, and pride ourselves in being
responsive and responsible stewards of the land. Our drilling program will be
aimed at placer gold exploration, and lode gold exploration. Placer drilling
will focus on a series of targets on the hillside benches. Lode drilling will be
along the Solomons Shear trend, and designed to provide a better three
dimensional understanding of the mineralized sections of the structure and how
it is related to the placer gold deposits of the Nolan Creek area. If our budget
permits, we will do further drilling on the Slisco deep channel. Our exploration
work will provide a basis for the assessment of the feasibility of future
additional exploration activities, including test mining activities, at 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:

| | 1. | To identify surface or sub-surface placer deposits at our
      Nolan Gold Project that are prospective for test mining operations. In
      general, these deposits are located on 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), Lower Nolan Bench and Marys
      East including areas adjoining to the north, east and south. 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 and areas
      adjoining north, east and south as well as, the Swede Channel and the
      areas adjoining to the east and south, 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
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 44 -

---

| |    | Nolan Bench has not been drilled. The newly acquired
      Topnotch property may also be a priority target during fiscal
  2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 2. | To determine whether there is a potential lode deposit of
      gold 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 as differentiated from placer gold which is gold that has been
      removed from its host rock by the process of erosion, our combined and
      re-concentrated down gravity drill, trench, geologic and geophysical work
      well be part of our on-going investigations to determine whether there
      exist one or more lode deposit on the Nolan Gold project that could be 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 (deep channel)
      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 and publications
as well as the trenching and exploration drilling of target areas.

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 being spent on maintaining our properties, and
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 if we are able to proceed with our exploration plans, including our
ongoing underground test mining activities. 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. However, at this time we
are achieving recoveries from sales of gold.

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. That test mining is the work
described in the plans for Swede Channel test mining, and Marys East test
mining. The objective of the test mining activities on the Nolan Gold Project is
to expand our knowledge of the placer deposits on the Nolan Gold Project and to
develop a cost effective method for working the deposits. While the irregular
high grade nature of these deposits may preclude attainment of reserve
categories; management does believe that we may be attaining profitability
presently or soon, depending on the considerable increase of recovered gold this
year anticipated over last. Profitability is the objective, while at the minimum
we endeavour 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 may not be sufficient to pay for the full cost of exploration
on the other hand it may. This could be a turning year for us. There is no
assurance that our test mining activities will result in a final evaluation that
a commercially viable lode or placer mineral deposit exists on any of our
mineral properties that comprise the Nolan Gold Project.

- 45 -

---

Ester Dome Property

During 2007, we plan to complete the closure of the Grant Mill
Tailings Pond. This pond is filled to capacity, and will be capped and
decommissioned after a final approval of the tailings pond closure plan is
received from State of Alaska regulatory agencies. A meaningful exploration
program may be completed during the summer months to explore for and identify
small high-grade gold anomalies as well as larger low-grade gold anomalies.

Completing the 2007 exploration work plan will be contingent on
available funding.

Hammond Property

The encouraging drill results to date, the potential of
extending the Slisco Channel to the southeast plus the possibility of
discovering gold bearing tributary channels, make this an exciting prospect for
additional discoveries. During the summer of 2007, a series of drill holes may
be completed to explore for the extension of the Slisco Channel to the south.
Presently, it has been traced for 1,800 feet. The drill program will also seek
to define any gold bearing tributaries to the Slisco Channel.

This project will require additional funding for the company.
Even if funding is acquired, there is no assurance that a commercial gold
bearing placer deposit will be developed. Even if a gold bearing deposit is
developed, additional funding will be required to mine the deposit, and until a
feasibility study is completed, there is no assurance that the deposit will be
profitable to mine.

Eagle Creek Property

During 2007, annual assessment work will be completed on the
Eagle Creek property to keep the mining claims in good standing. Assessment work
will be focused on the Northwest part of the claim block, where drilling and
trenching has defined an intrusive host rock, thought to be a sill, containing
low grade gold, silver and antimony mineralization. If funding permits, the
company will design a drilling program to further investigate the gold and
by-product mineral distribution of the intrusive. Additional work will also be
completed on the Number One Vein. The Number One Vein was the lode quartz
structure which has been mined commercially for antimony.

Completing the 2007 work plan will be contingent on available
funding. Even if funding becomes available, there is no assurance that a
commercial gold-silver-antimony deposit will be defined. A commercially viable
economic mineral deposit has not been defined on the property, and there is no
assurance that a commercially viable economic mineral deposit exists on the
property.

Low-Rank Coal-Water Fuel Project

We anticipate spending approximately $300,000during 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. It is
the case however, that two divisions of the state of Mississippi government have
agreed to begin funding the start-up of our demonstration facility subject to
certain terms and conditions as outlined in a recently signed agreement between
ourselves and part of the State of Mississippi.

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.

Asset retirement obligation

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

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

Stock Based Compensation

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

OFF-BALANCE SHEET ARRANGEMENTS

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

- 47 -

---

|ITEM 7. | FINANCIAL STATEMENTS.
|------- | ---------------------

Our audited financial statements for the year ended November
30, 2006, 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.

|                                                                                                                                                                                                                                                 | Page              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------
|                                                                                                                                                                                                                                                 |                   
|Report
        of Independent Registered Public Accounting Firm  Berkovits, Lago
        & Company, LLP                                                                                                                                         | F-1               
|                                                                                                                                                                                                                                                 |                   
|Consolidated
        Balance Sheets, November 30, 2006 and 2005                                                                                                                                                                                  | F-2               
|                                                                                                                                                                                                                                                 |                   
|Consolidated
        Statements of Operations and other Comprehensive Income for the Years
        Ended November 30, 2006 and 2005 and for the period since Recommencement
        of Exploration Stage, December 1, 2001, to November 30, 2006 | F-3               
|                                                                                                                                                                                                                                                 |                   
|Consolidated
        Statement of Stockholders Equity (Deficiency) for the and for the
        period since Recommencement of Exploration Stage, December 1, 2001, to
        November 30, 2006                                                 | F-4 to F-8        
|                                                                                                                                                                                                                                                 |                   
|Consolidated
        Statements of Cash Flows for the Years Ended November 30, 2006 and 2005
        and for the period since Recommencement of Exploration Stage, December
        1, 2001, to November 30, 2006                                | F-9               
|                                                                                                                                                                                                                                                 |                   
|Notes
        to Consolidated Financial Statements                                                                                                                                                                                               | F-10 to
      F-29

- 48 -

---

|SILVERADO GOLD MINES LTD.                   
|--------------------------------------------
|                                            
|(An Exploration Stage Company)              
|                                            
|REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
|                                            
|November 30, 2006 and 2005                  
|                                            
|(Stated in United States Dollars)           



---

**BERKOVITZ, LAGO
  & COMPANY, LLP**CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS

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 sheets
  of Silverado Gold Mines Ltd. and Subsidiary (An Exploration Stage Company) as
  of November 30, 2006 and 2005, and the related consolidated statements of operations
  and other comprehensive income, stockholders deficiency, and cash flows
  for the two years ended November 30, 2006 and 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 audits.
  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, 2006 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 audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audits 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 audits 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 audits provide 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, 2006 and
  2005, and the results of its operations and its cash flows for the two years
  ended November 30, 2006 in conformity with accounting principles generally accepted
  in the United States of America.

/s/ Berkovits, Lago & Company, LLP

Fort Lauderdale, Florida 
  March 9, 2007

F-1

---

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

|ASSETS                                                      |   | 2006        |   |   | 2005        |  
|----------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                            |   |             |   |   |             |  
|Current                                                     |   |             |   |   |             |  
|Cash and cash equivalents                                   | $ | 3,509,418   |   | $ | 408,589     |  
|Gold inventory                                              |   | 511,629     |   |   | 27,916      |  
|Other receivables                                           |   | 9,972       |   |   | 6,594       |  
|                                                            |   |             |   |   |             |  
|                                                            |   | 4,031,019   |   |   | 443,099     |  
|Property, plant and equipment, net                          |   | 1,053,533   |   |   | 1,285,553   |  
|                                                            |   |             |   |   |             |  
|                                                            | $ | 5,084,552   |   | $ | 1,728,652   |  
|                                                            |   |             |   |   |             |  
|LIABILITIES                                                 |   |             |   |   |             |  
|Current                                                     |   |             |   |   |             |  
|Accounts payable and accrued
      liabilities              | $ | 332,229     |   | $ | 393,058     |  
|Mineral claims royalty payable                              |   | 380,000     |   |   | 400,000     |  
|Payable to related party                                    |   | 359,834     |   |   | 70,282      |  
|Convertible debentures                                      |   | 140,000     |   |   | 176,652     |  
|Capital lease obligation,
      current portion             |   | 129,286     |   |   | 258,254     |  
|                                                            |   |             |   |   |             |  
|                                                            |   | 1,341,349   |   |   | 1,298,246   |  
|Asset retirement obligation                                 |   | 521,058     |   |   | 539,453     |  
|Capital lease obligations                                   |   | 247,129     |   |   | 463,895     |  
|                                                            |   |             |   |   |             |  
|                                                            |   | 2,109,536   |   |   | 2,301,594   |  
|                                                            |   |             |   |   |             |  
|SHAREHOLDERS EQUITY (DEFICIT)                              |   |             |   |   |             |  
|Common stock                                                |   |             |   |   |             |  
|Authorized: unlimited common shares with no
      par value |   |             |   |   |             |  
|Issued and outstanding:                                     |   |             |   |   |             |  
|630,785,052 common shares
      (2005: 355,054,275)         |   | 82,538,598  |   |   | 71,526,738  |  
|Additional paid-in capital                                  |   | 466,314     |   |   | 466,314     |  
|Subscriptions received                                      |   | 273,600     |   |   | 54,500      |  
|Accumulated deficit during exploration stage                |   | (80,303,496 | ) |   | (72,620,494 | )
|                                                            |   |             |   |   |             |  
|                                                            |   | 2,975,016   |   |   | (572,942    | )
|                                                            |   |             |   |   |             |  
|                                                            | $ | 5,084,552   |   | $ | 1,728,652   |  

APPROVED BY THE DIRECTORS:

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

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F -2

---

|SILVERADO GOLD MINES LTD.                                               
|------------------------------------------------------------------------
|(An Exploration Stage Company)                                          
|CONSOLIDATED STATEMENTS OF OPERATIONS & OTHER COMPREHENSIVE
      INCOME
|for the years ended November 30, 2006 and 2005                          
|(Stated in United States Dollars)                                       

|                                              |   |                        |   |   |                  |   |   | Period Since      |  
|--------------------------------------------- | - | ---------------------- | - | - | ---------------- | - | - | ----------------- | -
|                                              |   |                        |   |   |                  |   |   | Recommencement Of |  
|                                              |   |                        |   |   |                  |   |   | Exploration Stage |  
|                                              |   | Year ended November 30 |   |   | December 1, 2001 |  
|                                              |   |                        |   |   |                  |   |   | To November 30,   |  
|                                              |   | 2006                   |   |   | 2005             |   |   | 2006              |  
|General and Administrative Expenses           |   |                        |   |   |                  |   |   |                   |  
|Accounting and audit                          | $ | 109,623                |   | $ | 72,294           |   | $ | 283,637           |  
|Advertising and promotion                     |   | 327,082                |   |   | 215,247          |   |   | 1,804,599         |  
|Consulting fees                               |   | 1,223,060              |   |   | 362,272          |   |   | 5,606,290         |  
|Depreciation, accretion
      and impairment  |   | 226,587                |   |   | 259,087          |   |   | 1,970,247         |  
|Exploration expenses                          |   | 3,252,320              |   |   | 746,196          |   |   | 11,879,680        |  
|Financing activities                          |   | -                      |   |   | 252,003          |   |   | 252,003           |  
|Interest on convertible debentures            |   | 11,200                 |   |   | 13,033           |   |   | 684,607           |  
|Interest on capital lease
      obligations   |   | 43,187                 |   |   | 56,427           |   |   | 300,776           |  
|Legal                                         |   | 264,169                |   |   | 64,914           |   |   | 535,657           |  
|Management services                           |   | 1,028,335              |   |   | 653,010          |   |   | 2,950,854         |  
|Office                                        |   | 941,372                |   |   | 499,726          |   |   | 2,728,316         |  
|Other interest and bank
      charges         |   | 8,845                  |   |   | 7,306            |   |   | 36,482            |  
|Reporting and investor relations              |   | 197,147                |   |   | 62,253           |   |   | 311,786           |  
|Research                                      |   | 129,698                |   |   | 120,293          |   |   | 735,377           |  
|Transfer agent fees and mailing               |   | 60,688                 |   |   | 23,125           |   |   | 152,037           |  
|Write-off of mineral claim
      expenditures |   | -                      |   |   | -                |   |   | 1,159,529         |  
|Write-down of property, plant and equipment   |   | -                      |   |   | -                |   |   | 285,875           |  
|                                              |   |                        |   |   |                  |   |   |                   |  
|Total General and Administrative Expenses     |   | 7,823,313              |   |   | 3,407,186        |   |   | 31,677,752        |  
|                                              |   |                        |   |   |                  |   |   |                   |  
|Loss from Operations                          |   | (7,823,313             | ) |   | (3,407,186       | ) |   | (31,677,752       | )
|                                              |   |                        |   |   |                  |   |   |                   |  
|Interest and other income                     |   | 145,189                |   |   | 2,296            |   |   | 237,979           |  
|                                              |   |                        |   |   |                  |   |   |                   |  
|Cumulative effect of accounting change        |   | -                      |   |   | -                |   |   | (153,226          | )
|                                              |   |                        |   |   |                  |   |   |                   |  
|Other comprehensive income                    |   |                        |   |   |                  |   |   |                   |  
|Gain (loss)
      on foreign exchange         |   | (4,878                 | ) |   | 10,783           |   |   | 138,195           |  
|                                              |   |                        |   |   |                  |   |   |                   |  
|Comprehensive loss for the period             | $ | (7,683,002             | ) | $ | (3,394,107       | ) | $ | (31,454,804       | )
|                                              |   |                        |   |   |                  |   |   |                   |  
|Net loss per share                            | $ | (0.01                  | ) | $ | (0.01            | ) |   |                   |  
|                                              |   |                        |   |   |                  |   |   |                   |  
|Basic and diluted weighted average number of  |   |                        |   |   |                  |   |   |                   |  
|common shares outstanding                     |   | 532,400,802            |   |   | 280,724,907      |   |   |                   |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F - 3

---

|SILVERADO GOLD MINES LTD.                                  
|-----------------------------------------------------------
|(An Exploration Stage Company)                             
|CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)
|for the years ended November 30, 2002 to 2006              
|(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                            |  |              |  |   |            |  |   |               |  |   |            |  |   |              |  |   |             |   |   |            |  
|January 2002 @ $0.15 per
      share             |  | 3,700,000    |  |   | 555,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 555,000    |  
|April 2002
      @ $0.11 per share               |  | 2,000,000    |  |   | 220,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 220,000    |  
|May 2002 @ $0.125 per share                      |  | 1,200,000    |  |   | 150,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 150,000    |  
|For warrants exercised                           |  |              |  |   |            |  |   |               |  |   |            |  |   |              |  |   |             |   |   |            |  
|March 2002 @ $0.05 per share                     |  | 5,300,000    |  |   | 265,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 265,000    |  
|April 2002
      @ $0.08 per share               |  | 2,000,000    |  |   | 160,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 160,000    |  
|July 2002 @ $0.35 per share                      |  | 1,800,000    |  |   | 630,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 630,000    |  
|July 2002
      @ $0.20 per share                |  | 2,000,000    |  |   | 400,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 400,000    |  
|August 2002 @ $0.10 per share                    |  | 5,150,000    |  |   | 515,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 515,000    |  
|For consulting fees                              |  |              |  |   |            |  |   |               |  |   |            |  |   |              |  |   |             |   |   |            |  
|February 2002 @ $0.11 per
      share            |  | 1,091,667    |  |   | 120,084    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 120,084    |  
|April 2002
      @ $0.12 per share               |  | 350,000      |  |   | 42,000     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 42,000     |  
|May 2002 @ $0.13 per share                       |  | 308,333      |  |   | 40,083     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 40,083     |  
|May 2002
      @ $0.15 per share                 |  | 391,667      |  |   | 60,000     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 60,000     |  
|February 2002 @ $0.18 per
      share            |  | 350,000      |  |   | 63,000     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 63,000     |  
|June 2002
      @ $0.23 per share                |  | 308,333      |  |   | 70,917     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 70,917     |  
|August 2002 @ $0.34 per share                    |  | 300,000      |  |   | 102,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 102,000    |  
|August 2002
      @ $0.35 per share              |  | 41,667       |  |   | 14,583     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 14,583     |  
|June 2002 @ $0.38 per share                      |  | 41,667       |  |   | 14,583     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 14,583     |  
|July 2002
      @ $0.39 per share                |  | 83,333       |  |   | 32,500     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 32,500     |  
|October 2002 @ $0.40 per
      share             |  | 41,667       |  |   | 16,667     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 16,667     |  
|November
      2002 @ $0.41 per share            |  | 268,333      |  |   | 109,217    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 109,217    |  
|September 2002 @ $0.43 per
      share           |  | 925,005      |  |   | 397,752    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 397,752    |  
|October 2002
      @ $0.44 per share             |  | 50,000       |  |   | 22,000     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 22,000     |  
|September 2002 @ $0.46 per
      share           |  | 41,667       |  |   | 19,167     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 19,167     |  
|September
      2002 @ $0.48 per share           |  | 100,000      |  |   | 48,000     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 48,000     |  
|November 2002 @ $0.60 per
      share            |  | 99,996       |  |   | 59,998     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 59,998     |  
|For private placements, net of
      commissions |  |              |  |   |            |  |   |               |  |   |            |  |   |              |  |   |             |   |   |            |  
|December 2002 @ $0.04 per
      share            |  | 2,500,000    |  |   | 100,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 100,000    |  
|February
      2002 @ $0.05 per share            |  | 5,300,000    |  |   | 265,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 265,000    |  
|April 2002 @ $0.09 per share                     |  | 2,000,000    |  |   | 180,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 180,000    |  
|May 2002
      @ $0.10 per share                 |  | 2,000,000    |  |   | 200,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 200,000    |  
|June 2002 @ $0.15 per share                      |  | 4,000,000    |  |   | 600,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 600,000    |  
|July 2002
      @ $0.26 per share                |  | 250,000      |  |   | 65,000     |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 65,000     |  
|July 2002 @ $0.30 per share                      |  | 1,200,000    |  |   | 360,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 360,000    |  
|September
      2002 @ $0.38 per share           |  | 400,000      |  |   | 152,000    |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 152,000    |  
|November 2002 @ $0.32 per
      share            |  | 3,125,000    |  |   | 1,000,000  |  |   | -             |  |   | -          |  |   | -            |  |   | -           |   |   | 1,000,000  |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F - 4

---

continued:

|                                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   | Deficit     |   |   |            |  
|---------------------------------------- |  | ------------ |  | - | ---------- | - | - | ------------- | - | - | ---------- |  | - | ------------ | - | - | ----------- | - | - | ---------- | -
|                                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   | Accumulated |   |   |            |  
|                                         |  |              |  |   |            |   |   |               |   |   | Additional |  |   |              |   |   | During the  |   |   |            |  
|                                         |  | Common Stock |  |   | Share      |   |   | Paid-in       |   |   | Deferred   |  |   | Exploration  |   |   |             |  
|                                         |  | Shares       |  |   | Amount     |   |   | Subscriptions |   |   | Capital    |  |   | Compensation |   |   | Stage       |   |   | Total      |  
|                                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|In lieu of payment for debentures        |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|December 2002 @ $0.10 per
      share    |  | 1,628,971    |  | $ | 162,897    |   | $ | -             |   | $ | -          |  | $ | -            |   | $ | -           |   | $ | 162,897    |  
|June 2002
      @ $0.11 per share        |  | 1,437,520    |  |   | 158,127    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 158,127    |  
|March 2002 @ $0.13 per share             |  | 1,234,710    |  |   | 160,512    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 160,512    |  
|September
      2002 @ $0.37 per share   |  | 2,643,107    |  |   | 984,391    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 984,391    |  
|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)             |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|December
      2002 @ $0.50 per share    |  | 5,500,000    |  |   | 2,750,000  |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 2,750,000  |  
|January 2003 @ $0.55 per
      share     |  | 909,091      |  |   | 500,000    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 500,000    |  
|April 2003
      @ $0.33 per share       |  | 3,525,582    |  |   | 1,163,400  |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,163,400  |  
|July 2003 @ $0.15 per share              |  | 1,666,667    |  |   | 250,000    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 250,000    |  
|August 2003
      @ $0.10 per share      |  | 13,050,000   |  |   | 1,305,000  |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 1,305,000  |  
|Commissions paid                         |  | -            |  |   | (641,155   | ) |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | (641,155   | )
|For options exercised                    |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|December 2002 @ $0.35 per
      share    |  | 200,000      |  |   | 70,000     |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 70,000     |  
|For warrants exercised                   |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|August 2003 @ $0.08 per share            |  | 10,864,539   |  |   | 884,121    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 884,121    |  
|July 2003
      @ $0.12 per share        |  | 954,546      |  |   | 114,546    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 114,546    |  
|September 2003 @ $0.10 per
      share   |  | 3,459,086    |  |   | 345,908    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 345,908    |  
|For consulting fees                      |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|November 2003 @ $0.22 per
      share    |  | 2,511,668    |  |   | 554,085    |   |   | (268,613      | ) |   | -          |  |   | -            |   |   | -           |   |   | 285,472    |  
|In lieu of payment for debentures        |  |              |  |   |            |   |   |               |   |   |            |  |   |              |   |   |             |   |   |            |  
|December 2002 @ $0.38 per
      share    |  | 372,818      |  |   | 141,671    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 141,671    |  
|April 2003
      @ $0.18 per share       |  | 3,274,865    |  |   | 588,893    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 588,893    |  
|August 2003 @ $0.14 per share            |  | 913,551      |  |   | 127,897    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 127,897    |  
|November
      2003 @ $0.46 per share    |  | 738,308      |  |   | 340,006    |   |   | -             |   |   | -          |  |   | -            |   |   | -           |   |   | 340,006    |  
|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    |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F - 5

---

continued:

|                                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   | Deficit     |   |   |            |  
|---------------------------------------- |  | ------------ |  | - | ---------- | - | - | ------------- | - | - | ---------- |  | - | ------------ |  | - | ----------- | - | - | ---------- | -
|                                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   | Accumulated |   |   |            |  
|                                         |  |              |  |   |            |   |   |               |   |   | Additional |  |   |              |  |   | During the  |   |   |            |  
|                                         |  | Common Stock |  |   | Share      |   |   | Paid-in       |   |   | Deferred   |  |   | Exploration  |  |   |             |  
|                                         |  | Shares       |  |   | Amount     |   |   | Subscriptions |   |   | Capital    |  |   | Compensation |  |   | Stage       |   |   | Total      |  
|                                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|Shares issued:                           |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|For private placements                   |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December
      2003 @ $0.075 per share   |  | 1,533,894    |  | $ | 115,000    |   | $ | (115,000      | ) | $ | -          |  | $ | -            |  | $ | -           |   | $ | -          |  
|February 2004 @ $0.075 per
      share   |  | 15,390,070   |  |   | 1,154,255  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 1,154,255  |  
|June 2004
      @ $0.05 per share        |  | 21,666,667   |  |   | 1,083,334  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 1,083,334  |  
|September 2004 @ $0.04 per
      share   |  | 2,500,000    |  |   | 100,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 100,000    |  
|September
      2004 @ $0.035 per share  |  | 2,857,143    |  |   | 100,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 100,000    |  
|October 2004 @ $0.06 per
      share     |  | 1,166,667    |  |   | 70,000     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 70,000     |  
|November
      2004 @ $0.03 per share    |  | 10,000,000   |  |   | 300,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 300,000    |  
|Commissions paid                         |  | -            |  |   | (357,690   | ) |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | (357,690   | )
|For warrants exercised                   |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|January 2004 @ $0.075per
      share     |  | 8,876,597    |  |   | 665,745    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 665,745    |  
|November
      2004 @ $0.03 per share    |  | 6,000,000    |  |   | 180,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 180,000    |  
|For consulting fees                      |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|January 2004
      @ $0.14 per share     |  | 495,000      |  |   | 69,300     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 69,300     |  
|April 2004 @ $0.09 per share             |  | 750,000      |  |   | 67,500     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 67,500     |  
|April 2004
      @ $0.10 per share       |  | 50,000       |  |   | 5,000      |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 5,000      |  
|April 2004 @ $0.137 per share            |  | 720,000      |  |   | 98,640     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 98,640     |  
|June 2004
      @ $0.12 per share        |  | 410,000      |  |   | 49,200     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 49,200     |  
|August 2004 @ $0.07 per share            |  | 150,000      |  |   | 10,500     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 10,500     |  
|November
      2004 @ $0.06 per share    |  | 1,516,667    |  |   | 91,000     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 91,000     |  
|November 2004 @ $0.06 per
      share    |  | 2,325,000    |  |   | 186,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 186,000    |  
|In lieu of payment for debentures        |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December 2003 @ $0.11 per
      share    |  | 1,119,342    |  |   | 123,128    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 123,128    |  
|February
      2004 @ $0.10 per share    |  | 559,915      |  |   | 55,992     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 55,992     |  
|June 2004 @ $0.067 per share             |  | 248,685      |  |   | 16,660     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 16,660     |  
|September
      2004 @ $0.049 per share  |  | 86,588       |  |   | 4,243      |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 4,243      |  
|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                    |  | -            |  |   | -          |   |   | -             |   |   | -          |  |   | -            |  |   | (4,836,363  | ) |   | (4,836,363 | )
|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
  STATEMENTS

F - 6

---

continued:

|                                       |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   | Deficit     |   |   |            |  
|-------------------------------------- |  | ------------ |  | - | ---------- | - | - | ------------- | - | - | ---------- |  | - | ------------ |  | - | ----------- | - | - | ---------- | -
|                                       |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   | Accumulated |   |   |            |  
|                                       |  |              |  |   |            |   |   |               |   |   | Additional |  |   |              |  |   | During the  |   |   |            |  
|                                       |  | Common Stock |  |   | Share      |   |   | Paid-in       |   |   | Deferred   |  |   | Exploration  |  |   |             |  
|                                       |  | Shares       |  |   | Amount     |   |   | Subscriptions |   |   | Capital    |  |   | Compensation |  |   | Stage       |   |   | Total      |  
|                                       |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|Shares issued:                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|For private placements                 |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December
      2004 @ $0.032 per share |  | 3,076,924    |  | $ | 100,000    |   | $ | (70,000       | ) | $ | -          |  | $ | -            |  | $ | -           |   | $ | 30,000     |  
|February 2005 @ $0.04 per
      share  |  | 562,500      |  |   | 22,500     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 22,500     |  
|October 2005
      @ $0.0275 per share |  | 5,454,546    |  |   | 150,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 150,000    |  
|November 2005 @ $0.02 per
      share  |  | 8,250,000    |  |   | 165,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 165,000    |  
|November
      2005 @ $0.025 per share |  | 8,000,000    |  |   | 200,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 200,000    |  
|November 2005 @ $0.03 per
      share  |  | 38,540,338   |  |   | 1,156,210  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 1,156,210  |  
|November
      2005 @ $0.032 per share |  | 56,335,379   |  |   | 1,267,546  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 1,267,546  |  
|Commissions paid                       |  | -            |  |   | (325,363   | ) |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | (325,363   | )
|For consulting fees                    |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December 2004 @ $0.025 per
      share |  | 2,000,000    |  |   | 50,000     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 50,000     |  
|December
      2004 @ $0.033 per share |  | 1,150,000    |  |   | 38,000     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 38,000     |  
|January 2005 @ $0.06 per
      share   |  | 420,000      |  |   | 25,200     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 25,200     |  
|January 2005
      @ $0.07 per share   |  | 160,000      |  |   | 11,200     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 11,200     |  
|January 2005 @ $0.09 per
      share   |  | 160,000      |  |   | 14,400     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 14,400     |  
|February
      2005 @ $0.05 per share  |  | 1,450,000    |  |   | 72,500     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 72,500     |  
|February 2005 @ $0.08 per
      share  |  | 895,000      |  |   | 71,600     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 71,600     |  
|May 2005
      @ $0.04 per share       |  | 50,000       |  |   | 2,000      |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 2,000      |  
|Subscriptions received                 |  | -            |  |   | -          |   |   | 54,500        |   |   | -          |  |   | -            |  |   | -           |   |   | 54,500     |  
|Stock-based compensation               |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December 2004 @ $0.07 per
      share  |  | 600,001      |  |   | 42,000     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 42,000     |  
|December
      2004 @ $0.06 per share  |  | 3,500,000    |  |   | 210,003    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 210,003    |  
|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   | )
|                                       |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|Shares issued:                         |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|For private placements                 |  |              |  |   |            |   |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December
      2005 @ $0.028 per share |  | 4,285,715    |  |   | 120,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 120,000    |  
|December 200 @ $0.035 per
      share  |  | 428,573      |  |   | 15,000     |   |   | (15,000       | ) |   | -          |  |   | -            |  |   | -           |   |   | -          |  
|January 2006
      @ $0.025 per share  |  | 85,806,201   |  |   | 2,145,145  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 2,145,145  |  
|January 2006 @ $0.03 per
      share   |  | 14,020,000   |  |   | 420,600    |   |   | (8,000        | ) |   | -          |  |   | -            |  |   | -           |   |   | 412,600    |  
|January 2006
      @ $0.0325 per share |  | 4,776,924    |  |   | 155,250    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 155,250    |  
|January 2006 @ $0.038 per
      share  |  | 1,914,475    |  |   | 72,750     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 72,750     |  
|February
      2006 @ $0.114 per share |  | 788,782      |  |   | 90,000     |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 90,000     |  
|April 2006 @ $0.06 per share           |  | 71,626,667   |  |   | 4,297,600  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 4,297,600  |  
|April 2006
      @ $0.07 per share     |  | 9,900,001    |  |   | 693,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 693,000    |  
|May 2006 @ $0.08 per share             |  | 5,650,000    |  |   | 452,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 452,000    |  
|May 2006
      @ $0.10 per share       |  | 4,000,000    |  |   | 400,000    |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 400,000    |  
|October 2006 @ $0.0285 per
      share |  | 35,087,719   |  |   | 1,000,000  |   |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 1,000,000  |  
|Commissions
      paid                 |  | -            |  |   | (1,170,791 | ) |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | (1,170,791 | )

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F - 7

---

continued:

|                                                    |  |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   | Deficit     |   |   |            |  
|--------------------------------------------------- |  | ------------ |  | - | ---------- |  | - | ------------- | - | - | ---------- |  | - | ------------ |  | - | ----------- | - | - | ---------- | -
|                                                    |  |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   | Accumulated |   |   |            |  
|                                                    |  |              |  |   |            |  |   |               |   |   | Additional |  |   |              |  |   | During the  |   |   |            |  
|                                                    |  | Common Stock |  |   | Share      |  |   | Paid-in       |   |   | Deferred   |  |   | Exploration  |  |   |             |  
|                                                    |  | Shares       |  |   | Amount     |  |   | Subscriptions |   |   | Capital    |  |   | Compensation |  |   | Stage       |   |   | Total      |  
|                                                    |  |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|For warrants exercised                              |  |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|December 2005 @ $0.0225 per
      share             |  | 1,400,000    |  | $ | 31,500     |  | $ | (31,500       | ) | $ | -          |  | $ | -            |  | $ | -           |   | $ | -          |  
|July 2006
      @ $0.04 per share                   |  | 18,888,888   |  |   | 755,556    |  |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 755,556    |  
|July 2006 @ $0.069 per share                        |  | 11,081,832   |  |   | 767,000    |  |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 767,000    |  
|For consulting fees                                 |  |              |  |   |            |  |   |               |   |   |            |  |   |              |  |   |             |   |   |            |  
|March 2006 to November 2006
      @ $0.13 per share |  | 6,075,000    |  |   | 767,250    |  |   | -             |   |   | -          |  |   | -            |  |   | -           |   |   | 767,250    |  
|Subscriptions received                              |  | -            |  |   | -          |  |   | 273,600       |   |   | -          |  |   | -            |  |   | -           |   |   | 273,600    |  
|Net loss for the year                               |  | -            |  |   | -          |  |   | -             |   |   | -          |  |   | -            |  |   | (7,683,002  | ) |   | (7,683,002 | )
|Balance, November 30, 2006                          |  | 630,785,052  |  | $ | 82,538,598 |  | $ | 273,600       |   | $ | 466,314    |  | $ | -            |  | $ | (80,303,496 | ) | $ | (2,975,016 | )

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F - 8

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|CONSOLIDATED STATEMENTS OF CASH FLOWS         
|for the years ended November 30, 2006 and 2005
|(Stated in United States Dollars)             

|                                                             |   |                         |   |   |                  |   |   | Period Since         |  
|------------------------------------------------------------ | - | ----------------------- | - | - | ---------------- | - | - | -------------------- | -
|                                                             |   |                         |   |   |                  |   |   | Recommencement       |  
|                                                             |   |                         |   |   |                  |   |   | Of Exploration Stage |  
|                                                             |   | Years Ended November 30 |   |   | December 1, 2001 |  
|                                                             |   | 2006                    |   |   | 2005             |   |   | to November 30, 2006 |  
|Cash Flows used in Operating Activities                      |   |                         |   |   |                  |   |   |                      |  
|Net loss for the period                                      | $ | (7,683,002              | ) | $ | (3,394,107       | ) | $ | (31,454,804          | )
|Adjustments to reconcile
      loss to net cash provided     |   |                         |   |   |                  |   |   |                      |  
|by (used in) operating activities:                           |   |                         |   |   |                  |   |   |                      |  
|Cumulative
      effect of accounting change                 |   | -                       |   |   | -                |   |   | 153,226              |  
|Depreciation, accretion
      and impairment                 |   | 226,587                 |   |   | 259,087          |   |   | 1,970,247            |  
|Stock
      based compensation                               |   | 219,100                 |   |   | (15,500          | ) |   | 2,641,550            |  
|Stock issued for debenture                                   |   | -                       |   |   | -                |   |   | 217,687              |  
|Non-cash
      consulting expense                            |   | 767,250                 |   |   | 284,900          |   |   | 1,629,290            |  
|Non-cash financing
      expense                             |   | -                       |   |   | 252,003          |   |   | 252,003              |  
|Interest
      accrued                                       |   | -                       |   |   | -                |   |   | 486,370              |  
|Write-off of mineral
      claim expenditures                |   | -                       |   |   | -                |   |   | 1,159,529            |  
|Write-down
      of property, plant and equipment            |   | -                       |   |   | -                |   |   | 285,875              |  
|Changes in non-cash operating working
      capital:         |   |                         |   |   |                  |   |   |                      |  
|Other
      receivables                                      |   | (3,378                  | ) |   | 1,568            |   |   | (7,097               | )
|Gold inventory                                               |   | (483,713                | ) |   | 20,903           |   |   | (500,489             | )
|Prepaid
      expense                                        |   | -                       |   |   | 122,000          |   |   | -                    |  
|Accounts payable and
      accrued liabilities               |   | (79,222                 | ) |   | 27,761           |   |   | (282,557             | )
|Increase
      in mineral claims royalty payable             |   | (20,000                 | ) |   | 80,000           |   |   | 63,500               |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net cash used in Operating Activities                        |   | (7,056,378              | ) |   | (2,361,385       | ) |   | (23,385,670          | )
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash Flows provided by Investing Activities                  |   |                         |   |   |                  |   |   |                      |  
|Purchase of property, plant and
      equipment              |   | (49,604                 | ) |   | (7,312           | ) |   | (1,384,309           | )
|Disposal of property,
      plant and equipment              |   | 55,037                  |   |   | 49,200           |   |   | 207,289              |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net cash provided (used) from Investing Activities           |   | 5,433                   |   |   | 41,888           |   |   | (1,177,020           | )
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash Flows from Financing Activities                         |   |                         |   |   |                  |   |   |                      |  
|Common stock issued for cash (net
      of share issue cost) |   | 10,244,610              |   |   | 2,736,309        |   |   | 28,852,413           |  
|Repayment of convertible
      debentures                    |   | (36,652                 | ) |   | -                |   |   | (74,999              | )
|Repayment of loans payable                                   |   | -                       |   |   | -                |   |   | (35,729              | )
|Repayment of capital
      lease obligations                 |   | (345,734                | ) |   | (91,333          | ) |   | (755,192             | )
|Due to related party                                         |   | 289,550                 |   |   | 70,282           |   |   | 68,522               |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net cash provided from Financing Activities                  |   | 10,151,774              |   |   | 2,715,258        |   |   | 28,055,015           |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Net change in cash and cash equivalents                      |   | 3,100,829               |   |   | 395,761          |   |   | 3,492,325            |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash and cash equivalents, beginning of period               |   | 408,589                 |   |   | 12,828           |   |   | 17,093               |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Cash at end of the period                                    | $ | 3,509,418               |   | $ | 408,589          |   | $ | 3,509,418            |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Supplemental information:                                    |   |                         |   |   |                  |   |   |                      |  
|                                                             |   |                         |   |   |                  |   |   |                      |  
|Interest
      on capital lease                              | $ | 43,187                  |   | $ | 56,427           |   | $ | 300,776              |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
  STATEMENTS

F-9

---

|SILVERADO GOLD MINES LTD.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|November 30, 2006 and 2005                    
|(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 research and development of low-rank coal-water
  fuel as a replacement for oil fired 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.

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 is 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.

F - 10

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 2    

Note 2

| | 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.                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F - 11

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 3    

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

| | 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. During
        the fiscal year 2006 the Company sold 204.35 troy ounces of gold for proceeds
        of $87,357 which have been directly applied as a reduction to exploration
        costs.                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 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) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The preparation of financial statements in conformity
        with accounting principles generally accepted in the United States of
        America requires management to make estimates and assumptions that affect
        the reported amount of assets and liabilities and disclosure of contingent
        assets and liabilities at the date of the financial statements and the
        reported amounts of revenues and expenses during the reporting period.
        Actual results could vary from these estimates.                                                                                                                                                 

F - 12

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 4    

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

| | j) | Property, Plant and Equipment                                                                                          
| | -- | -----------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                        
| |    | Property, plant and equipment are stated at cost. Depreciation
        is provided on a straight line basis as follows:

| | Building, plant and equipment        | 3 to 20 years
| | ------------------------------------ | -------------
| | Mining equipment under capital lease | 10 years     
| | Auto and trucks                      | 10 years     
| | Computer equipment                   | 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.               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F - 13

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 5    

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

| | 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 2006 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 December 2004, the Financial Accounting
        Standards Board issued Statement of Financial Accounting Standards Number
        123 (R), Share-Based Payments. Prior to December 1, 2006 we
        accounted for our employee stock option plan under the recognition and
        measurement provisions of APB Opinion No. 25, Accounting for Stock
        Issued to Employees, and related interpretations, as permitted by
        SFAS No. 123, Accounting for Stock-Based Compensation. No
        stock-based employee compensation cost related to stock options was recognized
        in the Statements of Income for periods prior to January 1, 2006, as all
        stock options granted had an exercise price equal to the market value
        of the underlying common stock on the date of grant. After December 1,
        2006 we will adopt 123 (R). The adoption will increase expense and thus
        reduce profit or increase loss to the extent of the fair value of the
        share-based payments made during the current fiscal year.                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | In February 2006, the FASB issued Statement
        of Financial Accounting Standards No.155 (SFAS 155) Accounting for
        Certain Hybrid Instruments  an amendment of FASB Statements No.
        133 and 140. SFAS 155 amends SFAS 133 to permit fair value measurement
        for certain hybrid financial instruments that contain an embedded derivative,
        provides additional guidance on the applicability of SFAS 133 and SFAS
        140 to certain financial instruments and subordinated concentrations of
        credit risk. SFAS 155 is effective for the first fiscal year that begins
        after September 15, 2006. This did not have any impact on our consolidated
        financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | In July 2006, the Financial Accounting Standards
        Board issued FASB Interpretation No. 48 Accounting for Uncertainty
        in Income Taxes--an Interpretation of FASB Statement 109 (FIN 48),
        which clarifies the accounting for uncertainty in tax positions taken
        or expected to be taken in a tax return, including issues relating to
        financial statement recognition and measurement. FIN 48 provides that
        the tax effects from an uncertain tax position can be recognized in the
        financial statements only if the position is more-likely-than-not
        of being sustained if the position were to be challenged by a taxing authority.
        The assessment of the tax position is based solely on the technical merits
        of the position, without regard to the likelihood that the tax position
        may be challenged. If an uncertain tax position meets the more-likely-than-not
        threshold, the largest amount of tax benefit that is greater than 50 percent
        likely of being recognized upon ultimate settlement with the taxing authority,
        is recorded. The provisions of FIN 48 are effective for fiscal years beginning
        after December 15, 2006, with the

F - 14

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 6    

| | p) | Recent Accounting Pronouncements (continued)
| | -- | --------------------------------------------

cumulative effect of the change in accounting
  principle recorded as an adjustment to opening retained earnings. The Company
  expects to recognize a liability of approximately $3.3 million as a result of
  adopting FIN 48.

In September 2006 the Financial Accounting
  Standards Board issued Statement of Financial Accounting Standards No. 157 Fair
  Value Measurements (SFAS 157), which provides expanded guidance for using
  fair value to measure assets and liabilities. SFAS 157 establishes a hierarchy
  for data used to value assets and liabilities, and requires additional disclosures
  about the extent to which a company measures assets and liabilities at fair
  value, the information used to measure fair value, and the effect of fair value
  measurements on earnings. Implementation of SFAS 157 is required on January
  1, 2008. The Company is currently evaluating the impact of adopting SFAS 157
  on the financial statements.

On September 29, 2006, the Financial
  Accounting Standards Board issued Statement of Financial Accounting Standards
  No. 158 Employers Accounting for Defined Benefit Pension and Other
  Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and
  132(r) (SFAS 158). The Statement requires the recognition of the over
  funded or under funded status of a defined benefit postretirement plan as an
  asset or liability on the balance sheet and the recognition of the changes of
  the funded status in the year in which the changes occur through comprehensive
  income. Implementation of SFAS 158 is required as of the end of the fiscal year
  ending after December 15, 2006. The adoption of SFAS 158 would not have an impact
  on the Companys financial statements because the Company does not currently
  have any defined benefit pension or other postretirement benefit plans.

F - 15

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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 - 16

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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, 2006, royalty payments
        totalling $380,000 (2005: $400,000) 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 - 17

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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.

| |                              |   |           |  |   | 2006         |  |   |           | 
| | ---------------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| |                              |   |           |  |   | Accumulated  |  |   | Net Book  | 
| |                              |   | Cost      |  |   | Amortization |  |   | Value     | 
| |                              |   |           |  |   |              |  |   |           | 
| | Nolan Gold Project buildings | $ | 63,000    |  | $ | 63,000       |  | $ | -         | 
| | Nolan mining equipment       |   | 869,630   |  |   | 431,754      |  |   | 437,876   | 
| | Nolan mining equipment       |   |           |  |   |              |  |   |           | 
| | under capital lease          |   | 819,842   |  |   | 216,923      |  |   | 602,919   | 
| | Other equipment              |   | 447,047   |  |   | 434,309      |  |   | 12,738    | 
| |                              |   |           |  |   |              |  |   |           | 
| |                              | $ | 2,199,519 |  | $ | 1,145,986    |  | $ | 1,053,533 | 

| |                              |   |           |  |   | 2005         |  |   |           | 
| | ---------------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| |                              |   |           |  |   | Accumulated  |  |   | Net Book  | 
| |                              |   | Cost      |  |   | Amortization |  |   | Value     | 
| |                              |   |           |  |   |              |  |   |           | 
| | Nolan Gold Project buildings | $ | 63,000    |  | $ | 63,000       |  | $ | -         | 
| | Nolan mining equipment       |   | 849,230   |  |   | 346,830      |  |   | 502,400   | 
| | Nolan mining equipment       |   |           |  |   |              |  |   |           | 
| | under capital lease          |   | 949,342   |  |   | 171,631      |  |   | 777,711   | 
| | Other equipment              |   | 426,834   |  |   | 421,392      |  |   | 5,442     | 
| |                              |   |           |  |   |              |  |   |           | 
| |                              | $ | 2,288,406 |  | $ | 1,003,060    |  | $ | 1,285,553 | 

|Note 5 | Accounts Payable and Accrued Liabilities
|------ | ----------------------------------------

| | Accounts payable and accrued liabilities consist of: |   |         |  |   |         | 
| | ---------------------------------------------------- | - | ------- |  | - | ------- | 
| |                                                      |   | 2006    |  |   | 2005    | 
| |                                                      |   |         |  |   |         | 
| | Accounts payable                                     | $ | 233,802 |  | $ | 302,124 | 
| | Accrued interest                                     |   | 98,427  |  |   | 90,934  | 
| |                                                      |   |         |  |   |         | 
| |                                                      | $ | 332,229 |  | $ | 393,058 | 

F - 18

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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, 2003 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, 2006:

| |                            |   | Grant   |  |   | Nolan   |   |   |         |  
| | -------------------------- | - | ------- |  | - | ------- | - | - | ------- | -
| |                            |   | Mine    |  |   | Project |   |   | Total   |  
| | Balance, December 1, 2005  | $ | 347,287 |  | $ | 192,166 |   | $ | 539,453 |  
| | Accretion expense          |   | -       |  |   | 26,973  |   |   | 26,973  |  
| | Liabilities settled        |   | -       |  |   | (45,368 | ) |   | (45,368 | )
| | Balance, November 30, 2006 | $ | 347,287 |  | $ | 173,771 |   | $ | 521,058 |  

|Note 7 | Convertible Debentures Note 9
|------ | ------------------------------

Convertible debentures outstanding at
  November 30, 2006 and 2005 consisted of the following:

| |                       |   | 2006     |   |   | 2005     |  
| | --------------------- | - | -------- | - | - | -------- | -
| | Issued in 1994        | $ | 140,000  |   | $ | 140,000  |  
| | Issued in 1999        |   | -        |   |   | 36,652   |  
| |                       |   | 140,000  |   |   | 176,652  |  
| | Less: current portion |   | (140,000 | ) |   | (176,652 | )
| |                       | $ | -        |   | $ | -        |  

F - 19

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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 $98,427 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. The balance at November
        30, 2005 was $36,652, During the year ended November 30, 2006, the Company
        made a principal payment of $36,652 (2005: $0) and an interest payment
        of $4,166 (2005: $0) to discharge the debenture in full.                                                                                                                                                                                                              

|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 2007 for the balance of principal plus interest at a rate
  of 7.5% per annum.

F - 20

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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 2006 was $70,113.

Minimum future lease payments under capital
  leases for the next year and in the aggregate are:

| | November 30, 2007            | $ | 419,602 |  
| | ---------------------------- | - | ------- | -
| | Total minimum lease payments |   | 419,602 |  
| | Less: interest               |   | (43,187 | )
| | Current portion              | $ | 376,415 |  

F - 21

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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, 2006 and 2005 is presented below:

| |                                                        |  |            |   | Weighted | 
| | ------------------------------------------------------ |  | ---------- | - | -------- | 
| |                                                        |  | Number     |   | Average  | 
| |                                                        |  | of         |   | Exercise | 
| |                                                        |  | Options    |   | Price    | 
| |                                                        |  |            |   |          | 
| | Outstanding at November 30, 2005                       |  | 32,630,000 |   | $0.07    | 
| | Granted                                                |  | 31,100,000 |   | 0.05     | 
| | Expired                                                |  | (550,000   | ) | 0.07     | 
| |                                                        |  |            |   |          | 
| | Outstanding and exercisable at November 30,
      2006 |  | 63,180,000 |   | $0.07    | 

As at November 30, 2006, the following
  stock options were outstanding:

| | Number of  | Exercise |                 
| | ---------- | -------- | ----------------
| | Options    | Price    | Expiry Date     
| |            |          |                 
| | 9,280,000  | 0.05     | May 17, 2007    
| | 900,000    | 0.15     | February 1, 2008
| | 5,000,000  | 0.05     | December 4, 2008
| | 4,400,000  | 0.05     | January 8, 2011 
| | 12,500,000 | 0.05     | June 30, 2011   
| | 31,100,000 | 0.05     | January 4, 2013 
| |            |          |                 
| | 63,180,000 |          |                 

F - 22

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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:

| |                                            |   | 2006       |   |   | 2005       |  
| | ------------------------------------------ | - | ---------- | - | - | ---------- | -
| | Net loss for the year as reported          | $ | (7,683,002 | ) | $ | (3,394,107 | )
| | Stock-based compensation                   |   | (1,637,692 | ) |   | -          |  
| | Pro forma net loss for the year            | $ | (9,320,694 | ) | $ | (3,394,107 | )
| | Pro forma basic and diluted loss per share | $ | (0.02      | ) | $ | (0.01      | )

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

| | Risk free interest rate                     | 4.31%    
| | ------------------------------------------- | ---------
| | Dividend free yield                         | 0%       
| | Expected volatility                         | 107%     
| | Weighted average expected stock option life | 2.6 years

The weighted average fair value of the
  employee and director stock options granted was $0.08 per share.

Expected volatility is based on historical
  volatility. Because trading tends to be thin, in relation to the total shares
  outstanding, average weekly stock prices were used to calculate volatility.

U.S. Treasury constant maturity rates
  were utilized with maturities most closely approximating the expected term of
  the option.

The expected term of the options was
  calculated using the alternative simplified method permitted by SAB 107, which
  defines the expected life as the average of the contractual term of the options
  and the weighted average vesting period for all option tranches.

| | b) | Warrants:                                                                                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                 
| |    | Warrants outstanding as at November 30, 2006 are exercisable
        into 1 common share for each warrant held and a summary is presented below:

F - 23

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 15   

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

Commitments: - (contd)

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

| |             | Exercise  |                  | 
| | ----------- | --------- | ---------------- | 
| |             | Price per |                  | 
| | Number of   | Warrant   |                  | 
| | Warrants    | $         | Expiration Date  | 
| |             |           |                  | 
| | 24,000,000  | 0.1000    | January 13, 2007 | 
| | 2,500,000   | 0.0600    | January 16, 2007 | 
| | 6,666,666   | 0.1000    | January 20, 2007 | 
| | 11,500,000  | 0.0300    | May 13, 2007     | 
| | 5,496,000   | 0.1200    | October 7, 2007  | 
| | 2,748,000   | 0.0600    | October 7, 2007  | 
| | 990,001     | 0.1200    | October 25, 2007 | 
| | 495,001     | 0.0600    | October 25, 2007 | 
| | 17,543,859  | 0.0700    | October 10, 2007 | 
| | 17,543,860  | 0.0700    | October 31, 2007 | 
| | 16,666,668  | 0.1600    | March 29, 2008   | 
| | 13,833,334  | 0.1200    | March 31, 2008   | 
| | 8,458,000   | 0.1200    | April 4, 2008    | 
| | 5,188,334   | 0.1200    | April 7, 2008    | 
| | 4,950,001   | 0.1200    | April 25, 2008   | 
| |             |           |                  | 
| | 138,579,724 |           |                  | 

| | 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 - 24

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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, 2006, 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:

| |                                                 |   | 2006      |  |   | 2005      | 
| | ----------------------------------------------- | - | --------- |  | - | --------- | 
| |                                                 |   |           |  |   |           | 
| |                                                 |   |           |  |   |           | 
| | Exploration, development and field services     | $ | 3,687,946 |  | $ | 673,483   | 
| | Administrative and management services          |   | 1,093,858 |  |   | 687,510   | 
| | Research                                        |   | 129,698   |  |   | 120,293   | 
| |                                                 |   |           |  |   |           | 
| |                                                 | $ | 4,911,502 |  | $ | 1,481,286 | 
| |                                                 |   |           |  |   |           | 
| | Amount of total charges in excess of Tri-Con    |   |           |  |   |           | 
| | costs incurred                                  | $ | 760,324   |  | $ | 154,707   | 
| |                                                 |   |           |  |   |           | 
| | Excess amount charged as a percentage of actual |   |           |  |   |           | 
| | costs incurred                                  |   | 15.48%    |  |   | 10.44%    | 

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 and are included in various captions of the Statements
  of Operations.

F - 25

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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, 2006 and 2005 are as follows:

| |                                              |   | 2006        |   |   | 2005        |  
| | -------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                              |   |             |   |   |             |  
| | Net operating loss carry forwards            | $ | 14,507,000  |   | $ | 12,695,000  |  
| | Temporary differences arising from mineral   |   |             |   |   |             |  
| | properties and building, plant and equipment |   | 271,000     |   |   | (354,000    | )
| | Valuation allowance                          |   | (14,778,000 | ) |   | (12,341,000 | )
| |                                              |   |             |   |   |             |  
| | Net future tax asset                         | $ | -           |   | $ | -           |  

At November 30, 2006, the Company had
  losses carried forward totalling $25,651,000 available to reduce future years
  income for U.S. income tax purposes which expire in various years to 2022. In
  addition, we had losses carried forward in Canada totalling CDN$17,286,000 which
  expire in various years to 2013.

The provision for income taxes differs
  from the amount computed by applying the Canadian statutory federal income tax
  rate of 38% (2005: 37.62%) to net loss before provision for income taxes. The
  sources and tax effects of the differences are as follows:

| |                                          |   | 2006       |   |   | 2005       |  
| | ---------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                          |   |            |   |   |            |  
| | Computed expected tax benefit          | $ | (2,883,000 | ) | $ | (1,468,000 | )
| | Tax loss expired during the year         |   | 449,000    |   |   | 928,000    |  
| | Temporary differences and other          |   | 811,000    |   |   | 167,000    |  
| | Change in valuation allowance            |   | 302,000    |   |   | 302,000    |  
| | Difference in foreign tax rate and other |   | 1,562,000  |   |   | 71,000     |  
| |                                          |   |            |   |   |            |  
| | 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 (2005: $4,100,000) plus the amount of
        annual bonuses and other benefits that they would have received in the
        eighteen months following termination.

F - 26

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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 |  |  |             |  

The Company is currently negotiating
  a new three-year office lease agreement.

|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:                                                                                                                                                                                  

| |                        |   | 2006      |  |   | 2005      | 
| | ---------------------- | - | --------- |  | - | --------- | 
| |                        |   |           |  |   |           | 
| | Net loss for the year: |   |           |  |   |           | 
| | Canada                 | $ | 2,218,513 |  | $ | 1,856,389 | 
| | United States          |   | 5,464,489 |  |   | 1,537,718 | 
| |                        |   |           |  |   |           | 
| |                        | $ | 7,683,002 |  | $ | 3,394,107 | 
| | Long-lived assets:     |   |           |  |   |           | 
| | Canada                 |   | 12,738    |  |   | 5,442     | 
| | United States          |   | 1,040,795 |  |   | 1,280,111 | 
| |                        |   |           |  |   |           | 
| |                        | $ | 1,053,533 |  | $ | 1,285,553 | 

F - 27

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(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, 2006:

| | a) | the Company issued 6,075,000 common shares at various
        prices for total proceeds of $767,250 pursuant to payment of consulting
        fees;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                    
| | b) | the Company utilized prior years share subscriptions
        of $54,500 for the issuance of common shares.                                        

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.                                                                           

|Note 15 | Subsequent Events
|------- | -----------------

Subsequent to November 30, 2006, the
  Company:

| | a) | issued 3,800,000 common shares at $0.08 per share totaling
        $304,000 pursuant to a consulting agreement in January 2007.                                                                  
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                  
| | b) | issued 1,170,067 common shares at $0.094 per share totaling
        $109,401.28 pursuant to a consulting agreement in January 2007.                                                              
| |    |                                                                                                                                                                                                  
| | c) | issued 11,500,000 common shares at $0.03 per share for
        proceeds of $345,000 pursuant to warrants exercised in February 2007.                                                             
| |    |                                                                                                                                                                                                  
| | d) | issued 17,343,359 common shares at $0.07 per share for
        proceeds of $1,214,035 pursuant to warrants exercised in March 2007.                                                              
| |    |                                                                                                                                                                                                  
| | e) | sold 304.30 troy ounces of gold for proceeds of $252,195
        in January 2007 with an average mark up of 34% over the spot London Gold
        Fix (LAF) price at the date of sale as follows:

F - 28

---

|Silverado Gold Mines Ltd.                     
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|November 30, 2006 and 2005                    
|(Stated in United States Dollars)  Page 20   

|Note 15 | Subsequent Events (continued)
|------- | -----------------------------

|                  | Quantity |         |               |     |             |                 |            
|----------------- | -------- | ------- | ------------- | --- | ----------- | --------------- | -----------
|Description       | (t oz.)  | LAF     | Mark
      up | %   | LAF         | Mark
      up $ | Received   
|#1 10 nuggets     | 2.9579   | $614.60 | 196.70        | 32% | $1,817.93   | $581.82         | $2,399.74  
|#2 30 nuggets     | 5.6264   | 614.60  | 174.00        | 28% | 3,457.99    | 978.99          | 4,436.98   
|1/4 nuggets       | 4.0200   | 625.40  | 135.00        | 22% | 2,514.11    | 542.70          | 3,056.81   
|3/8 nuggets       | 7.8200   | 625.40  | 168.00        | 27% | 4,890.63    | 1,313.76        | 6,204.39   
|# 1/2 nuggets     | 8.6400   | 625.40  | 216.00        | 35% | 5,403.46    | 1,866.24        | 7,269.70   
|#1 nuggets        | 9.6500   | 625.40  | 240.00        | 38% | 6,035.11    | 2,316.00        | 8,351.11   
|#1/4 nuggets      | 74.4500  | 625.40  | 135.00        | 22% | 46,561.03   | 10,050.75       | 56,611.78  
|3/8 nuggets       | 44.8700  | 625.40  | 168.00        | 27% | 28,061.70   | 7,538.16        | 35,599.86  
|#1/2 nuggets      | 79.6900  | 625.40  | 216.00        | 35% | 49,838.13   | 17,213.04       | 67,051.17  
|#1/2 nuggets      | 24.2800  | 625.40  | 240.00        | 38% | 15,184.71   | 5,827.20        | 21,011.91  
|#1 - 2 oz nuggets | 29.4400  | 625.40  | 325.00        | 52% | 18,411.78   | 9,568.00        | 27,979.78  
|#2 - 3 oz nuggets | 12.8600  | 625.40  | 325.00        | 52% | 8,042.64    | 4,179.50        | 12,222.14  
|                  |          |         |               |     |             |                 |            
|                  | Average  | $623.60 | $211.56       | 34% | $190,219.20 | $61,976.16      | $252,195.36

F - 29

---

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

We have not had any disagreements with our former accountants
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.

|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, 2006, 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, 2006, 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.

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

- 49 -

---

Our current executive officers, directors, and significant
employees are:

|Name                    | Age | Position                                                                                                                               
|----------------------- | --- | ---------------------------------------------------------------------------------------------------------------------------------------
|Garry L. Anselmo        | 63  | Director and
      Chairman of the Board; President, Chief Executive Officer, Chief
      Financial Officer and Chief Operating Officer
|James F. Dixon (1)      | 59  | Director                                                                                                                               
|Stuart C. McCulloch (1) | 71  | Director                                                                                                                               
|John R. Mackay          | 74  | Corporate Secretary                                                                                                                    
|Dr. Karsten Eden        | 35  | Vice President
      Exploration Silverado Gold Mines Inc.                                                                             
|Dr. Warrack G. Willson  | 63  | Vice-President, Fuel Technology
      of Silverado Green Fuel Inc.                                                                     

|(1) | Member of Silverado's Audit Committee and
      Compensation Committee.
|--- | -----------------------------------------------------------------------

Set forth below is a brief description of the background and
business experience of each of our executive officers, directors, and
significant employees 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.

- 50 -

---

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.

Dr. Karsten Eden

Mr. Eden was appointed our vice-president exploration,
Silverado Gold Mines Inc., in July 2006. Dr. Eden holds a Masters Degree in
Economic Geology from the Technical University of Clausthal. He focused his
thesis on the Geology and Gold Mineralization of the Nolan Area in the Brooks
Range, Alaska. Dr. Eden also holds a Doctorate Degree in Exploration Geology
with an emphasis in GIS applications in mineral exploration from the University
of Technology Aachen. He has received two internationally recognized research
awards for his academic achievements.

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.

FAMILY RELATIONSHIPS

Mr. Anselmo and Mr. McCulloch, each of whom is one of our
directors, are cousins. There are no other family relationships among any of our
directors, executive officers, or persons nominated or chosen as our directors
or executive officers.

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 our last fiscal year.

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.. 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.

- 51 -

---



COMPLIANCE WITH SECTION 16(a) OF THE 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, 2006 all such
filing requirements applicable to its officers and directors were complied with.

|ITEM 10. | EXECUTIVE COMPENSATION.
|-------- | -----------------------

SUMMARY OF COMPENSATION

The following summary compensation table sets forth certain
compensation information for Mr. Garry L. Anselmo, our chief executive officer,
for each of our last three completed fiscal years. No other executive officer
received a total annual salary and bonus exceeding $100,000 during any of our
last three fiscal years.

SUMMARY COMPENSATION TABLEANNUAL COMPENSATION
    LONG TERM COMPENSATIONName
    Title
    Year
    Salary
    Bonus
    Other Annual Compen-
      sation
    AWARDS
    PAYOUTS
    All Other Compen-
      sationRestricted StockAwarded
    Options/ SARs (#)
    LTIP payouts ($)Garry L. Anselmo
    Director,
      President, Chief Executive Officer and Chief
      Financial Officer
    2006 2005 2004
    $0 $0 $0
    0 0 0
    0 0 0
    0 0 0
    0 0 8,500,000
    0 0 0
    0 0 0


OPTION/SAR GRANTS

We granted stock options to Mr. Garry L. Anselmo during our
fiscal year ended November 30, 2006, as illustrated in the following table:

- 52 -

---

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
    15,000,000
    41%
    $0.05
    January 4, 2013


Subsequent to the end of our fiscal year, we granted options to
purchase an aggregate of 17,400,000 shares to certain of our insiders on January
11, 2007 as follows. All options are fully vested and are exercisable at a price
of $0.07 per share for a six year term from the date of grant:

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    10,000,000James Dixon, Director
    2,000,000Stuart McCulloch, Director
    2,000,000John McKay, Secretary
    700,000Karsten Eden, Vice-President of Silverado Gold Mines Inc.
    700,000Warrack Willson, Vice-President of Silverado Green Fuel
      Inc.
    2,000,000


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,
2006:

AGGREGATED OPTION/SAR EXERCISES DURING THE
      LAST FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR
      VALUESName (#)
    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
    0
    $0
    0
    $0/$0


- 53 -

---

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
2006 Stock Option Plan and our 2006-II Stock Option Plan each permit the grant
of incentive stock options to our directors.

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 WITH EXECUTIVE OFFICERS

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

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
    500,000Ed 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:

- 54 -

---

NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    2,500,000James Dixon, Director
    800,000Stuart McCulloch, Director
    600,000Ed 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
    2,000,000Stuart 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


The incentive options were granted in accordance with
consistent company policy at the market price or slightly above. Since the date
of their grant the market fell significantly and has not recovered at the date
of the re-pricing. It was determined by the board that the consistently lower
market price justified a re-pricing in accordance with the long time policy of
pricing incentive options at or above the market.

|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 March
  5, 2007 by: (i) each person who is known by the Company to own beneficially
  more than five percent (5%) of any class of the Companys voting securities,
  (ii) each director of the Company, (iii) each executive officer of the Company,
  and (iv) all directors and executive officers of the Company as a group. No
  person is known to us to beneficially own more than 5% of our outstanding common
  shares, other than Mr. Garry Anselmo. Unless otherwise indicated, the shareholders
  listed possess sole voting and investment power with respect to the shares listed.

- 55 -

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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
    40,550,000(2)
    6.4%Common Shares
    James F. Dixon, Director
    9,314,484(3)
    1.5%Common Shares
    Stuart McCulloch, Director
    7,933,400(4)
    1.2%Common Shares
    John R. Mackay, Secretary
    5,100,000(5)
    0.8%Common Shares
    All Directors and Executive Officers as a
      Group (4 persons)
    62,864,884(6)
    10.0%


|(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 outstanding
        on March 5, 2007. As of March 5, 2007, there were 638,360,052 common shares
        of the Company issued and outstanding.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(2) | Consists of 4,050,000 shares held by Garry L. Anselmo, 7
      shares owned by Tri-Con Mining Ltd, and 36,500,000 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 714,484 shares held directly and indirectly
      by James F. Dixon and 8,600,000 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
      7,900,000 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

- 56 -

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|(5) | Consists of 100,000 shares held by Mr. Mackay and
      5,000,000 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 4,547,884 shares held by our directors and
      executive officers and 74,690,000 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.

|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., and 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 $75 CDN
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 $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 in the amount of $359,834 to the Tri-Con
Group as of November 30, 2006 in connection with exploration activities on the
Nolan Gold Project during fiscal 2006. At November 30, 2005, we were in arrears
$70,282 to the Tri-Con Mining Group for exploration, development and
administration services. For the years 2005 and 2006, the Tri-Con Mining Groups
services for the current fiscal year focused mainly on test mining activities 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:

| |                                             |   | 2006      |  |   | 2005    | 
| | ------------------------------------------- | - | --------- |  | - | ------- | 
| |                                             |   |           |  |   |         | 
| |                                             |   |           |  |   |         | 
| | Exploration, development and field services | $ | 3,687,946 |  | $ | 673,483 | 
| | Administrative and management services      |   | 1,093,858 |  |   | 687,510 | 
| | Research                                    |   | 129,698   |  |   | 120,293 | 

- 57 -

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| |                                                    | $ | 4,911,502 |  | $ | 1,481,286 | 
| | -------------------------------------------------- | - | --------- |  | - | --------- | 
| |                                                    |   |           |  |   |           | 
| | Amount of total charges in excess of
      Tri-Con |   |           |  |   |           | 
| | costs incurred                                     | $ | 760,324   |  | $ | 154,707   | 
| |                                                    |   |           |  |   |           | 
| | Excess amount charged as a percentage of actual    |   |           |  |   |           | 
| | costs incurred                                     |   | 15.48%    |  |   | 10.44%    | 

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 Green Fuel Inc.
    4,000,000Warrack 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
    500,000Ed 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:

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NAME
    NUMBER OF OPTIONSGarry Anselmo, President and Director
    2,500,000James Dixon, Director
    800,000Stuart McCulloch, Director
    600,000Ed 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
    2,000,000Stuart 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


- 59 -

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|ITEM 13. | EXHIBITS
|-------- | --------

|Exhibit |                                                                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                  
|3.1     | Articles of Incorporation of the Company (1)                                                                                                                                            
|3.2     | Amendment to Articles of Incorporation of the Company
      (2)                                                                                                                         
|3.3     | Altered Memorandum of the Company (3)                                                                                                                                                   
|3.4     | Amendment to Articles of Incorporation of the Company
      (7)                                                                                                                         
|4.1     | Share certificate representing common shares of the
      capital of the Company (1)                                                                                                    
|10.1    | Agreement for Conditional Purchase and Sale of Mining
      Property between the Company and Roger C. Burggraf dated October 6, 1978 
      Grant Mine Property (1)                    
|10.2    | Agreement for Conditional Purchase and Sale of Mining
      Property between the Company and Paul Barelka, Donald May and Mark
      Thoennes dated May 12, 1979  St. Paul Property (1)
|10.3    | Lease of Mining Claims with Option to Purchase between
      the Company and Alaska Mining Company, Inc. dated February 3, 1995 
      Hammond Property (4)                            
|10.4    | Change of Control Agreement between the Company and Garry
      L. Anselmo dated May, 1995(6)                                                                                           
|10.5    | 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   | Form of Warrant Exercise Agreement between the Company
      and certain of the selling security holders (8)                                                                            
|10.13   | Consultant Agreement between the Company and CEOcast,
      Inc. dated April 21, 2004 (8)                                                                                               
|10.14   | Subscription Agreement between the Company and Christoph
      Bruning dated May 10, 2004 (8)                                                                                           
|10.15   | Consultant Agreement between the Company and Smith
      Conciglia Consulting, Inc. dated May 16, 2004 (8)                                                                              
|10.16   | Form of Delay Agreement between the Company and certain
      of the Selling Shareholders.(8)                                                                                           

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|10.17 | 2006 Stock Option
        Plan (10)                                                                                                                              
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.18 | 2006-II Stock Option Plan (11)                                                                                                                                   
|14.1  | Code of Ethics
        (9)                                                                                                                                       
|31.1  | Certification
        of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                               
|31.2  | Certification
        of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                               
|32.1  | Certification
        of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.2  | Certification
        of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

|(1)  | Filed as an exhibit to the Companys Registration
      Statement on Form 10 filed initially on May 11, 1984, as
amended.
|---- | -------------------------------------------------------------------------------------------------------------------------
|(2)  | Filed as an exhibit to the Companys Quarterly Report on
      Form 10-Q filed on July 15, 1997.                         
|(3)  | Filed as an exhibit to the Companys Current Report on
      Form 8-K filed on September 11, 2002.                       
|(4)  | Filed as an exhibit to the Companys Annual Report on
      Form 10-K for the 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 Current Report on
      Form 8-K filed on June 13, 2003.                            
|(8)  | Filed as an exhibit to the Companys Registration
      Statement on Form SB-2 filed on May 19, 2004.                    
|(9)  | Filed as an exhibit to the Companys Quarterly Report on
      Form 10-QSB filed on July 15, 2004.                       
|(10) | Filed as an exhibit to the Companys Registration
      Statement on Form S-8 filed on April 11, 2006.                   
|(11) | Filed as an exhibit to the Companys Registration
      Statement on Form S-8 filed on March 31, 2006.                   

|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

The following table sets forth information regarding the amount
billed to us by our independent auditor, Berkovits, Lago & Company, LLP for
each of our last two fiscal years:

Fiscal years ended November 302006
    2005Audit Fees:
    $40,000
    $35,000Audit Related Fees:
    $34,900
    $16,811Tax Fees:
    NIL
    NILAll Other Fees:
    NIL
    NILTotal:
    $74,900
    $51,811


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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.                    
|-------------------- | ---------------------------------------------
|                     |                                              
|                     |                                              
|                     |                                              
|Date: March 15, 2007 | By: /s/ Garry L. Anselmo                     
|                     | Garry L. Anselmo,                            
|                     | President, Chief Executive Officer (Principal
|                     | Executive Officer), and Chief Financial      
|                     | Officer (Principal Accounting Officer)       

In accordance with the 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.

|Date: March 15, 2007 | By: /s/ Garry L. Anselmo                     
|-------------------- | ---------------------------------------------
|                     | Garry L. Anselmo,                            
|                     | President, Chief Executive Officer (Principal
|                     | Executive Officer), and Chief Financial      
|                     | Officer (Principal Accounting Officer), and  
|                     | Director                                     
|                     |                                              
|                     |                                              
|Date: March 15, 2007 | By: /s/ James F. Dixon                       
|                     | James F. Dixon,                              
|                     | Director                                     
|                     |                                              
|                     |                                              
|                     |                                              
|Date: March 15, 2007 | By: /s/ Stuart McCulloch                     
|                     | Stuart McCulloch,                            
|                     | Director                                     

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