Filed by Automated Filing Services Inc. (604) 609-0244 - Silverado Gold Mines Ltd. - Exhibit 10.16







		   SILVERADO GOLD MINES LTD.
	505 - 1111 W. Georgia Street

        Vancouver, BC, V6E 4M3

        Phone: (604) 689-1535 Fax: (604) 682-3519

      

      


May 16, 2004 

 SMITH CANCIGLIA CONSULTING, INC.  

  20949 Lohengrin Court 

  Ashburn, Virgina 20147 


Dear Ms. Smith and Mr. Canciglia:


 Re: SILVERADO GOLD MINES LTD. (the “Company”)  

   - Consultant Agreement between the Company and Smith Canciglia Consulting,
  Inc.

   (“Smith Canciglia Consulting”) 

 We write to confirm the agreement (the “Agreement”)
  of the Company to retain Smith Canciglia Consulting as a consultant on the following
  terms and subject to the following conditions:

	1. 	Smith Canciglia Consulting will provide the federal
        government consulting, public affairs and public relations services to
        the Company in connection with business development issues relating to
        the Green Fuel Project, as contemplated in the letter of Smith Canciglia
        Consulting to the Company dated September 17, 2003 and as further agreed
        by the Company and Smith Canciglia Consulting from time to time (together,
        the “Consulting Services”). 

	 	 
	2. 	Smith Canciglia Consulting will provide Terri D.
        Smith and Henry R. Canciglia to perform the Consulting Services. 

	 	 
	3.	Subject to Section 4 of this Agreement, the Company
        will pay to Smith Canciglia Consulting a consultant fee of $14,540 US
        per month (the “Consultant Fee”) in consideration for Smith
        Canciglia Consulting providing the Consulting Services. The Consultant
        Fee will include a cash portion of $2,540 per month and a portion to be
        paid as contemplated by Section 4 of this Agreement. 

	 	 
	4.	In consideration for Terri D. Smith and Henry R.
        Canciglia providing the services on behalf of Smith Canciglia Consulting,
        the Company will grant options to purchase an aggregate of 960,00 common
        shares of the Company to Ms. Smith and Mr. Canciglia as follows: 





	Name of Optionee	Number of

      Options	Exercise Price	Expiry Date	Vesting

      Provisions
	Terri D. Smith	480,000	$0.075	November 15, 2004	80,000 per month,
 on the 15th day of
 each
      month,
 commencing
 May 16, 2004
	Henry R. Canciglia	480,000	$0.075	November 15, 2004	80,000 per month,
 on the 15th day of
 each
      month,
 commencing
 May 16, 2004



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	 	The Company will have the option to pay a portion of
        the monthly Consulting Fee equal to $12,000 by having Ms. Smith and Mr.
        Canciglia exercise stock options to purchase an aggregate of 160,000 shares
        at a price of $0.075 per share. Smith Canciglia Consulting agrees that
        the issue of the shares to Ms. Smith and Mr. Canciglia under the stock
        options will be treated as payment of a portion of the monthly Consulting
        Fee equal to $12,000. The payment of the exercise price of the stock options
        will be completed by cancellation of this amount of the monthly Consulting
        Fee. Ms. Smith and Mr. Canciglia agree that the options can be exercised
        in this manner without further action of Ms. Smith and Mr. Canciglia,
        provided common shares of the Company with respect to the options exercised
        are delivered to Ms. Smith and Mr. Canciglia. 

       The Consultant Shares will be issued pursuant to exemptions
        from the registration requirements of the Securities Act of 1933 (the
        “Act”) or pursuant to an effective registration statement. If
        issued pursuant to an exemption from registration, all certificates representing
        the Consultant Shares will be endorsed with a legend confirming that the
        securities have not been registered and may only be resold pursuant to
        an effective registration statement under the Act or pursuant to a further
        exemption from registration, in the form required by the Company’s
        legal counsel. 

       The Company shall grant the Subscriber “piggyback”
        registration rights and shall register the shares, at the Company’s
        expense, in connection with its next registration of securities with the
        Securities and Exchange Commission (the “SEC”). 

	 	 
	5. 	The Company will reimburse Smith Canciglia Consulting
        for reasonable out-of-pocket expenses actually and properly incurred by
        Smith Canciglia Consulting in providing the Consulting Services. Smith
        Canciglia Consulting will provide a monthly statement of any expenses
        submitted for reimbursement and will, the request of the Company, provide
        proper receipts and invoices. 

	 	 
	6. 	Except as reasonable required to perform the Consulting
        Services, Smith Canciglia Consulting agrees not to disclose to any person
        or use for its own purposes any confidential information concerning the
        business or affairs of the Company which Smith Canciglia Consulting may
        acquire in the course providing the Consulting Services. All obligations
        with respect to confidential information will survive termination. 

	 	 
	7. 	The Consulting Services will not include: 
	 	 


	 	(a) 	services in connection with the offer or sale of
        securities in a capital-raising transaction; 

	 	 	 
	 	(b) 	services that directly or indirectly promote or maintain a market for
      the securities of the Corporation including without limitation the dissemination
      of information that reasonably may be expected to sustain or raise or otherwise
      influence the price of the securities; 
	 	 	 
	 	(c) 	services comprising investor relations or shareholder
        communications; 

	 	 	 
	 	(d) 	consultation in connection with financing that involves
        any issuance of the Company’s securities, whether equity or debt.
      

	 	 	 


	8.	In providing the Consulting Services, Smith Canciglia
        Consulting will: 

	 	 


	 	(a)	 comply with all applicable federal, state, local
        and foreign statutes, laws and regulations; and 

	 	 	 
	 	(b) 	not make any misrepresentation or omit to state any
        material fact that will result in a misrepresentation regarding the business
        of the Company. 

	 	 	 


	9. 	The term of this Agreement will be for a period of
        six months commencing on the date of this Agreement and subject to earlier
        termination as provided for herein. The term of this Agreement may only
        be extended by the written agreement of the Company and Smith Canciglia
        Consulting. All Options will terminate upon termination of this Agreement.
      

	 	 
	10. 	The Company may terminate this Agreement at the Company’s
        option upon the breach by Smith Canciglia Consulting of its obligations
        pursuant to this Agreement, provided that the Company has 

      


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	 	given written notice of default to Smith Canciglia
        Consulting and Smith Canciglia Consulting has failed to remedy the default
        within 14 days of receipt of written notice from the Company. 

	 	 
	11. 	The Company may terminate this Agreement at any time
        upon written notice to Smith Canciglia Consulting of termination and payment
        to Smith Canciglia Consulting of an amount equal to one months’ Consultant
        Fee as full and final payment of any and all liquidated damages to Smith
        Canciglia Consulting arising from early termination of this Agreement.
      

	 	 
	12. 	Smith Canciglia Consulting may terminate this Agreement
        at any time upon thirty days written notice to the Company. 

	 	 
	13. 	This Agreement may not be assigned in whole or in
        part by Smith Canciglia Consulting without the prior written consent of
        the Company. 

	 	 
	14. 	This Agreement shall be governed by and construed
        in accordance with the laws of the Province of British Columbia. 



If you are in agreement with the terms and conditions of engagement,
  please execute a copy of this letter where indicated below. 

 SILVERADO GOLD MINES LTD. 

  by its authorized signatory: 


/s/ Garry L. Anselmo


 _________________________________

  Mr. Garry L. Anselmo 

  Chief Executive Officer 


Accepted and agreed effective as of the 16th day of May, 2004.


 SMITH CANCIGLIA CONSULTING, INC. 

  by its authorized signatory: 

 Per:

	 	/s/ Henry R. Canciglia 	 
	 	____________________________	 
	 	Authorized Signatory 	 
	 	 	 
	 	 	 
	 	/s/ Terri D. Smith	/s/ Henry R. Canciglia
	 	____________________________	____________________________
	 	Terri D. Smith, Individually	Henry R. Canciglia, Individually



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