<PAGE>


This  exclusive  contractual  agreement,  effective  March 19, 2001, is made and
entered  into by and between, Silverado Gold Mines Ltd. and Dr. Warrack Willson,
of  Coal-Water  Fuel  Services.

Silverado  Gold  Mines  Ltd.,  (the  Company)  and  Dr.  Warrack  Willson,  (the
Executive)  agree  to  the  following:

Section  1.0  Employment:

1.1     Engagement:  The  Company will cause Silverado Gold Mines Inc. to employ
the  Executive  as  its  Vice  President  and  director  of the Fuels Technology
Division  subject  to  and in accordance with the provisions of this contractual
agreement.

1.2     Duties:  The Executive will serve as the primary developer of technology
to  produce and utilize low-rank coal-water fuels (LRCWFs), and will provide the
following  intellectual property exclusively to the Company, for the duration of
this  exclusive  contractual  agreement.

Low-rank  coal  (LRC)  conversion  and  utilization  expertise.

Technology  for  the  production  and  utilization  of  LRCWFs.

Engineering  design  and  cost information for a demonstration and/or commercial
scale  LRCWF  facility.

Knowledge of the production of LRCWFs from LRCs from around the world including,
Australia,  China,  India,  and  Indonesia.

Technical  and  business contacts in major Pacific Rim energy importing nations,
including  Japan  and  Korea.

Technical  and  business  contacts  in  developing  nations with LRCs, including
Australia, China, the Czeck Republic, India, Indonesia, Russia, and the Ukraine.

1.3     Attention  and  Effort:  The  Executive  will  devote  sufficient  time,
ability  and  attention  to the business of the Company to accomplish the duties
described  in  Section  1.2  above.

1.4     During  the  term of this exclusive contractual agreement, the Executive
will  not  disclose  to any other person, firm, corporation or government any of
his  knowledge  or  information  which  in  any  way relates to the development,
production  or utilization of LRCWF, and will not give assistance to, co-operate
with  or otherwise help any other person, firm, corporation or government in any
way  relating to the development, production or utilization of LRCWF without the
prior  written  approval  of  the  President  of  the  Company.



Exclusive Contractual Agreement          3/19/01                        Page 1

<PAGE>

Section 2.0  Compensation

2.1     Salary:  Upon  the  Company  obtaining  funding  to  build  a  LRCWF
demonstration  or commercial plant, the Executive shall be paid a base salary of
$U.S.  10,000  per month, and prior to receipt of such funding the Company shall
use  its  best  efforts  to  pay  the  executive  a  salary.

2.2     Stock  Compensation:  The  Executive  will  be issued a stock option for
1,200,000  shares of the Company which may be exercised on or after May 17, 2002
and  from  time to time at the price of $US 0.125 per share.  The Executive will
be  fully  vested in the shares acquired pursuant to the exercise of this option
and  can  sell them subject only to fully complying with the requirements of the
U.S.  "Securities  Exchange  Act" of 1934, the rules of the U.S. "Securities and
Exchange  Commission"  and  the  BC "Securities Act" and "Securities Rules" made
thereunder.

2.3     Royalty Payments:  Subject to the following proviso, in exchange for the
Executive  providing  exclusive  intellectual property concerning the production
and  utilization of LRCWFs, the Company agrees to pay a royalty equal to 1.5% of
gross  LRCWF  sales  to  the  Coal-Water Fuel Services Foundation for as long as
LRCWF  made  by the technology developed by the Executive is sold; Provided that
in  respect  of  any  agreement  or arrangement reached or entered into with the
Malaysian  Government  or  any  Malaysian  corporation or entity; whether or not
owned  or  controlled  by  the Malaysian Government the royalty payable shall be
0.5%  of  gross  LRCWF  sales.

2.4     Benefits:  During  the term of this exclusive contractual agreement, the
Executive  will  be  entitled  to  participate in all benefit programs (medical,
disability,  life  insurance,  etc.)  offered  by  the  Company.

2.5     Expenses:  During  the term of this exclusive contractual agreement, the
Executive  will  be  entitled  to  participate in all benefit programs (medical,
disability,  life  insurance,  etc.)  offered  by  the  Company.

2.6     Indemnification:  Subject to applicable laws, the Company will indemnify
and hold the Executive harmless from any and all losses, judgments or claims the
Executive  may  suffer  in  the  discharge of his duties for the Company, except
where such losses, judgements or claims arise directly or indirectly as a result
of  the  Executive's  negligent  or  improper  act  or  failure  to  act.



Exclusive Contractual Agreement          3/19/01                        Page 2

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Section 3.0  Term and Termination

3.1     Term:  The term of this contractual agreement will commence upon signing
and  will  continue  for  a  period  of  10  years, unless terminated as per the
following.

3.2     Termination:  If  within  two  years  after  signing  this  contractual
agreement  the  Company has not developed funding to build a LRCWF demonstration
or  commercial  plant, this exclusive contractual agreement may be terminated by
either  party.


                        Company:       Silverado Gold Mines Ltd.
                        --------       -------------------------

                                       By:     /s/ Garry L. Anselmo
                                               -------------------------

                                       Title:  President
                                               -------------------------

                                       Date:   March 20, 2001
                                               -------------------------

                        Executive:     Dr. Warrack Willson
                        ----------     -------------------

                                       By:     /s/ Warrack Willson
                                               -------------------------

                                       Title:  Vice President & Director
                                               -------------------------
                                               Fuels Technology Division
                                               -------------------------
                                               Silverado Gold Mines Inc.
                                               -------------------------

                                       Date:   March 19, 2001
                                               -------------------------





Exclusive Contractual Agreement          3/19/01                        Page 3