AGREEMENT


This  Agreement  made and  effective  this first day of  January,  1997,  by and
between TRI-CON MINING LTD.  (hereinafter "TCML") a British Columbia corporation
whose address is 505 -1111 West Georgia Street, Vancouver, B.C. V6E 4M3

                                       AND

SILVERADO MINES LTD.  (hereinafter  "SML") a British Columbia  corporation whose
address is also 505 - 1111 West Georgia Street, Vancouver, B.C. V6E 4M3.


                                   WITNESSETH:

A.   WHEREAS,  SML desires to retain TCML to serve as administrator and operator
     of mining claims situate within Canada and the United States, and

B.   WHEREAS, TCML desires to serve as administrator and operator for SML on the
     said claims,

NOW THEREFORE,  in consideration of these premises,  SML hereby appoints TCML as
administrator and operator, and TCML hereby accepts such appointment, subject to
the terms and conditions hereinafter set forth.


1.   TERM

     The term of this Agreement shall be perpetual,  unless  cancelled by thirty
days advance written notice by one party to the other.


2.   WARRANTIES AND REPRESENTATIONS

     SML  warrants  that it has the full  right  and  power to enter  into  this
     Agreement on the terms and conditions contained herein.

3.   UNDERTAKINGS BY TCML

     3.1 TCML undertakes to administer,  explore,  develop, operate, and reclaim
     the said claims in a professional and workmanlike manner. Further, at SML's
     specific written  direction,  TCML also agrees to assist SML in vending its
     claims to those prospective purchasers  specifically  identified to TCML by
     SML.

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     3.2 TCML may  construct,  maintain,  use and at its  election  remove  such
     structures,  facilities,  equipment,  roadways,  haulageways and such other
     improvements located on the said claims as it may deem necessary, useful or
     convenient in the conduct of its operations upon the said claims.

     3.3 TCML may also use and consume so much of the surface of the said claims
     as may be necessary, useful, or convenient for carrying out the purposes of
     this Agreement.

     3.4 TCML shall make available, for use in connection with the operations on
     the  said  claims,  the  knowledge  and  experience  of such  officers  and
     employees as are  reasonably  required for the proper  performance  of such
     services.

     3.5 TCML acknowledges that its operation on the said claims shall always be
     subject to general directions from SML.


4.   PAYMENTS TO TCML FOR ADMINISTRATION AND OPERATION

     4.1 TCML  shall  administer  said  claims  for a base  fee of Ten  Thousand
     Dollars ($10,000.00) per month, plus costs, below.

     4.2 TCML shall  explore,  develop,  mine,  and reclaim said claims at SML's
     cost. For the purpose of this Agreement, the term "cost" shall mean 115% of
     all  costs  incurred  by TCML  which  are  reasonably  attributable  to its
     operations on the said claims including but not limited to the following:

          a)   the cost of all full  time and part time  employees;  and cost of
               contractors;

          b)   the actual costs incurred in mobilization and demobilization;

          c)   reasonable travel and lodging expenses;

          d)   insurance premiums;

          e)   the cost of renting equipment;

          f)   the actual costs of material and supplies consumed by the work;

          g)   support  charges - a sum equal to  twenty-five  percent (25%) per
               annum on all project  acquisition,  exploration,  and development
               expenditures;  fifteen  percent  (15%)  annum  for all  operating
               expenditures;  and  fifteen  percent  (15%)  per  annum  for  all
               reclamation expenditures.  Capital purchases shall be exempt from
               additional charges.

          h)   a "stand by"  charge of 150% of (a)-(g)  when TCML is on site and
               prepared  to  perform  work,  but  unable  to  do so  for  causes
               attributable to SML;

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          i)   a charge of seventy-five  dollars  ($75.00) per hour for the time
               spent by each of TCML's officers on SML's behalf;

          j)   notwithstanding  any of the above, no TCML employee who serves as
               a director on SML's behalf shall bill SML for any of his time.

     4.3 SML  shall  make  payments  to the  account  of TCML  substantially  in
     accordance  with a budget  submitted to and accepted by SML. SML shall from
     time to time advance to TCML's account funds to cover  anticipated costs in
     conjunction  with the  requirements of the approved  budget.  TCML may draw
     from such  account the costs  incurred by it at cost plus  fifteen  percent
     (15%), and shall account monthly in writing to SML for the amounts drawn in
     sufficient  detail to enable  SML to  determine  the  correctness  thereof.
     Amounts  unpaid by SML to TCML within 30 days of the date the subject  cost
     is incurred by TCML shall be deemed as an unsecured  loan from TCML to SML,
     with interest due and payable at a rate of twelve percent (12%) per annum.

     4.4 TCML will submit to SML written  progress  reports on the operations on
     the development of the said claims.

     4.5 SML shall have the right to enter upon the said  claims and inspect the
     same at all times  with or without  notice to TCML,  at SML's sole risk and
     expense.

     4.6 Within ninety (90) days after the end of each calendar year, TCML shall
     submit an annual  cost  report to SML,  at which time SML will have  thirty
     (30) additional days to notify TCML of SML's intention to audit the report,
     at its own cost and expense.  If notice of an audit is not received by TCML
     within 30 days of  delivery  of its  report  to SML,  then the costs of the
     work,  and all  reports,  reconciliation's,  and  invoices of TCML shall be
     conclusively deemed to be true and correct.

5.   COST ADJUSTMENT

     5.1 TCML may increase its hourly rates each year  beginning  one year after
     the effective date of this agreement, by the percentage increase in the CPI
     where "CPI" means the  "Canadian  Price Index" as  published by  Statistics
     Canada.

6.   OBLIGATION AND INDEMNITY BY PARTIES

     6.1  TCML  agrees  to  comply  with  valid  and  applicable  local,  state,
     provincial  and  federal  laws and  regulations  governing  its  operations
     hereunder.

     6.2 TCML shall pay all  expenses  incurred by it in its  operations  on the
     said  claims  and  shall  allow no liens to  remain  upon the said  claims;
     provided however,  that if TCML disputes the validity or amount of any lien
     asserted against the said claims, it shall not be 

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     required to discharge  the same until the amount and validity  thereof have
     been finally determined.

     6.3 TCML shall indemnify and defend SML against any suit,  claim,  judgment
     or  demand  whatsoever  arising  out of the  negligence  of TCML,  provided
     however  that  this  provision  shall not  apply to any such  suit,  claim,
     judgment or demand caused in whole or in part by SML.

     6.4 During the term of this Agreement and any extension thereof, TCML shall
     procure and maintain  comprehensive  general liability insurance having the
     following coverage limits per occurrence:

          Property Damage Insurance:         $2,000,000.00
          Comprehensive General Liability:   $1,500,000.00

          TCML shall cause SML to be added to such policy as an additional named
     insured.


7.   TERMINATION

     7.1 TCML shall have the right to terminate  this  Agreement in its entirety
     at any  time  upon 30 days  advance  written  notice  to SML in the  manner
     provided in paragraph 12.

     7.2 Upon the date sixty (60) days after notice of  termination,  all rights
     and interest of TCML under this  Agreement  shall  terminate and TCML shall
     not be required to perform any further obligations hereunder concerning the
     said claims,  except as to  obligations,  if any, the  occurrence  of which
     precedes termination.


8.   PROTECTION OF PROPRIETARY INFORMATION

     Nothing  contained  herein is  intended  to  prevent  TCML from  performing
     services for other companies similar to those undertaken  herein;  provided
     that the  performance  of such services shall not interfere with the proper
     and efficient performance by TCML or the services to be rendered hereunder;
     provided  further  that TCML shall not make use of or divulge to others any
     trade  information  of  proprietary  nature of which it becomes  aware as a
     result of this Agreement with SML.


9.   FORCE MAJEURE

     9.1 TCML shall not be liable for failure to perform any of its  obligations
     hereunder  during  periods in which  performance  is prevented by any cause
     hereinafter called "force majeure"

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     9.2 For purpose of the Agreement, the term force majeure shall include Acts
     of God, fire, flood, undue shortage of power, strikes,  insurrection or mob
     violence, requirements or regulations of the government and other causes of
     a similar nature.

10.  DISPUTES NOT TO INTERRUPT OPERATIONS, ARBITRATION

     10.1 In the event of any dispute between parties hereto,  operations  shall
     be continued  in the same manner as prior to the dispute  until the matters
     in dispute have been finally resolved between the parties.

     10.2 The parties hereto may agree to submit any dispute  arising out of, or
     relating to, this Agreement to arbitration.

          10.2.1.  The  place of any  such  arbitration  shall be at  Vancouver,
          British Columbia.

          10.2.2.  The right to invoke  arbitration  is not in derogation of any
          other  rights  that the parties  may have to settle  disputes  through
          compromise or litigation.

11.  NOTICE

     11.1 Any notice or communication  required or permitted  hereunder shall be
     in writing and shall be  effective  when  personally  delivered or shall be
     effective when addressed:

          If to SML:

     SML Mines Ltd.
     505 - 1111 West Georgia Street
     Vancouver, B.C. V6E 4M3

          If to TCML:

     Tri-Con Mining Ltd.
     505 - 1111 West Georgia Street
     Vancouver, B.C. V6E 4M3

     and deposited, postage prepaid, certified, in the United States or Canadian
     mail.

     11.2  Either  party may,  by notice to the other as  aforesaid,  change its
     mailing address for future notice hereunder.


12.  BINDING EFFECT, ASSIGNMENT

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     12.1 If SML assigns the said claims in whole or in part to any third party,
     the provisions hereof shall inure to the benefit of and be binding upon its
     respective  successors and assigns,  but no change or division of ownership
     of the said  claims  however  accomplished,  shall  operate to enlarge  the
     obligations or diminish the rights of TCML hereunder.

     12.2 TCML shall have no right to assign  its  rights or  obligations  under
     this Agreement without the express prior written consent of SML.

13.  CONSTRUCTION: ENTIRE AGREEMENT

     13.1 The Agreement  shall be construed in  accordance  with the laws of the
     State of Alaska.

     13.2 The headings and subheadings  used herein are for convenience only and
     shall  not  be  deemed  to be a part  of  the  Agreement  for  purposes  of
     construction thereof.

     13.3 All of the agreements and understandings of the parties with reference
     to the said claims are embodied in this  Agreement,  which  supersedes  all
     prior  Agreements  or  understandings  between the parties  with  reference
     thereto.

     13.4 The compensation herein provided shall be deemed to be full payment to
     TCML for its operations hereunder.

     13.5 Should any part of this  Agreement be declared  invalid for any reason
     by a court of competent  jurisdiction such declaration shall not affect the
     balance of this Agreement.

     13.6 All dollar amounts herein are stated in Canadian currency.


IN   WITNESS  WHEREOF,  the parties have executed  this  Agreement at Vancouver,
     British Columbia, the day and year first above written.

Tri-Con Mining Ltd. by:                                 Silverado Mines Ltd. by:

Alex Homenuke                                           Garry L. Anselmo
-----------------------                                 ------------------------
Its Senior Vice President                               Its President
   

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