Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - TransGlobe Energy Corporation - Exhibit 10.1

 Exhibit 10.1  

 TransGlobe Energy Corporation 2003 Stock Option Plan. 

 TRANSGLOBE ENERGY CORPORATION

  STOCK OPTION PLAN

  Effective as of May 29, 2003  

      The Board of Directors of TransGlobe
  Energy Corporation ("TransGlobe" or the "Corporation") has established
  a stock option plan (the "Plan") governing the issuance of stock options
  (the "Stock Options") to directors, officers and employees of the Corporation
  or subsidiaries of the Corporation and persons or corporations who provide services
  to the Corporation or its subsidiaries on an on-going basis, or have provided
  or are expected to provide a service or services of considerable value to the
  Corporation or its subsidiaries. 

      The terms and conditions of
  the Plan for issuance of Stock Options are as follows: 

	1.    Purposes

      The principal purposes of the Plan are:

          

	 	(a)
   	to retain and attract qualified directors,
        officers, employees and service providers which the Corporation and its
        subsidiaries require;

         

	 	(b)
   	to promote a proprietary interest in
        the Corporation and its subsidiaries;

         

	 	(c)
   	to provide an incentive element in compensation;
        and

         

	 	(d)
   	to promote the profitability of the
        Corporation and its subsidiaries.

         

	2.    Shares subject to
        Plan.

            Subject to adjustment
        under the provisions of Section 13 of the Plan, the number of common shares
        of the Corporation ("Common Shares") reserved from time to time
        for issuance to Eligible Optionees (as hereinafter defined) pursuant to
        Stock Options under the Plan subject to the receipt of the approval of
        the principal stock exchange on which the Common Shares are listed (the
        "Exchange") and the approval of the shareholders of the Corporation,
        shall be as set out in the attached Schedule "A". In addition,
        unless otherwise approved by the Exchange and the shareholders of the
        Corporation, the number of Common Shares reserved for issuance upon the
        exercise of Stock Options shall not at any time exceed 10% of the aggregate
        number of issued and outstanding Common Shares of the Corporation ("Total
        Common Shares") and:

          

	 	(a)
   	no single officer, employee, or director
        of TransGlobe will hold options for more than 5% of the issued and outstanding
        Common Shares;

         

	 	(b)
   	the aggregate number of Common Shares
        to be issued upon the exercise of options granted under the Plan to Consultants
        from time to time will not exceed 2% of the issued and outstanding Common
        Shares; and

         

	 	(c)	no single Consultant will be granted
        options for more than 1 % per year of the issued and outstanding Common
        Shares.

     If any option granted under the
  Plan expires, terminates or is cancelled without having been exercised in full,
  the number of Common Shares unpurchased as to which such option was not exercised
  will be available for future grants within the limits set forth in Schedule
  "A" attached.

     No fractional Common Shares will be issued under
  this Plan.

3.    Eligibility

      Stock Options shall be granted only to persons,
  firms or corporations ("Eligible Optionees"):

	 	(a)
   	who are employees (full-time or part-time),
        officers or directors of the Corporation or its subsidiaries, or who are
        providing services to the Corporation or its subsidiaries on an on-going
        basis, or have provided or are expected to provide a service or services
        of considerable value to the Corporation or its subsidiaries; or

          

	 	(b)
   	subject to applicable laws, a person
        investing in (including lending money to) TransGlobe who is considered
        by The Toronto Stock Exchange to be an insider or an associate of an insider
        or otherwise not acting at arm's length to TransGlobe and thus not entitled
        to receive warrants which would otherwise be granted by TransGlobe in
        connection with such investment in TransGlobe ("Investor"); and

          

	 	(c)
   	in the case of (a) or (b) above, who
        the Board of Directors of the Corporation determines should receive Stock
        Options.

          

	     Stock
        Options may also be granted to corporations which are controlled by an
        Eligible Optionee. Unless the context otherwise requires, the term Eligible
        Optionee as used herein, shall include any such corporation.

      4.    Granting of Stock Options

            The Board of Directors
        of the Corporation may from time to time grant Stock Options to Eligible
        Optionees. At the time a Stock Option is granted, the Board of Directors
        shall determine the number of Common Shares of the Corporation purchasable
        under the Stock Option, the date when the Stock Option is to become effective
        and, subject to the other provisions of this Plan, all other terms and
        conditions of the Stock Option. An Eligible Optionee may hold more than
        one Stock Option at any time; however, no one Eligible Optionee can receive
        Stock Options entitling the Eligible Optionee to purchase more than 5%
        of the outstanding Common Shares of the Corporation, calculated on an
        undiluted basis. Any Stock Options granted to a corporation referred to
        in Section 3 hereof shall be included in the calculation of the Stock
        Options held by an Eligible Optionee.

       5.    Exercise Price

            The exercise price of
        each Stock Option shall be determined in the discretion of the Board of
        Directors of the Corporation at the time of the granting of the Stock
        Option, provided that the exercise price shall not be lower than the "Market
        Price". "Market Price" shall mean the closing price of the Common
        Shares on the Exchange on the day immediately prior to the date the Stock
        Option is granted or, if there are no trades of Common Shares of the Corporation
        on the Exchange on such day, the average of the bid price and ask price
        of the Common Shares on the day immediately prior to the date the Stock
        Option is granted; provided that in the event the Common Shares are not
        listed on the Exchange but are listed on another stock exchange or stock
        exchanges, the foregoing references to the Toronto Stock Exchange shall
        be deemed to be references to such other stock exchange, or if more than
        one, to such one as shall be designated by the Board of Directors of the
        Corporation and to the extent that the Common Shares of the Corporation
        are not listed on any exchange, the Market Price shall be such price as
        is determined by the Board of Directors, in good faith.

       6.    Term and Conditions or Options

            The following general
        provisions shall apply to all Stock Options granted by the Corporation
        (subject to such additional limitations as may be determined by the Board
        and set forth in the definitive option agreement between the Corporation
        and the Eligible Optionee):

          

	 	(a)
   	The latest date on which an option may
        be exercised will be the tenth anniversary of the date the option was
        granted.

         

	 	(b)
   	Except in the case of options granted
        to Investors as such, 50% of the options granted to each optionee under
        the Plan will become vested and exercisable on the six-month anniversary
        of the grant date, or at such other time as may be established by the
        Board at the time of the grant, and the balance on the first anniversary
        of the grant date or such other time or times as determined by the Board
        at the time of grant.

      

 

	 	(c)
   	Any exercise of an option must be in
        writing, signed by the proper person and delivered or mailed to TransGlobe,
        accompanied by any documents required by the Board and payment in full
        as provided below for the number of Common Shares for which the option
        is exercised.

         

	 	(d)
   	An optionee will have no rights as a
        shareholder of TransGlobe with respect to any Common Shares covered by
        any option until such time as and to the extent only that such option
        has been exercised.

         

	 	(e)
   	If any optionee ceases to be eligible
        for a grant of options under this plan for any reason (a "Termination"),
        except the death of an optionee or by reason of retirement pursuant to
        an established retirement policy of the Board and except in the case of
        options granted to Investors as such, all options granted to the optionee
        under the Plan and then held by the optionee will, to the extent such
        options were exercisable immediately prior to Termination, continue to
        be exercisable by the optionee for a period of 30 days following Termination
        or until the expiration date of the option if earlier.

         

	 	(f)
   	If Termination is by reason of retirement
        pursuant to an established retirement policy of the Board, all options
        held by the retiring optionee will become vested and exercisable, to the
        extent not already vested and exercisable, immediately prior to retirement,
        and they continue to be exercisable until their original expiration date.

         

	 	(g)
   	Except in the case of options granted
        to Investors as such, in the event of the death of an optionee all options
        granted to the optionee under the Plan and held by the optionee immediately
        before death will, to the extent such options were exercisable at that
        time, continue to be exercisable by the legal representative of the optionee
        for a period of 6 months following the death of the optionee or until
        the expiration date of the option if earlier. After such time, the options
        will terminate.

         

	 	(h)
   	The Corporation's retirement policy
        for directors is that if a director either resigns or agrees not to be
        re-nominated by management for election at the next annual general meeting,
        then so long as the director has served as director of the Corporation
        or of one of its subsidiaries for at least two years, then such director's
        Stock Options shall not terminate thirty days following the time such
        director ceases to be a director but, rather, shall continue until the
        earlier of the expiration date of the option and one year following the
        time such director ceases to be a director. 

          

	 In addition, but limiting
        the generality of the foregoing or the discretion of the Board, the Board
        of Directors may determine:

          

	 	(a)
   	that a Stock Option is exercisable only
        during the term of employment of the Eligible Optionee receiving it or
        during such term and for a limited period of time after termination of
        employment;

         

	 	(b)
   	that a Stock Option can be exercisable
        for a period of time or for its remaining term after the death, disability
        or incapacity of an Eligible Optionee;

         

	 	(c)
   	that only a portion of a Stock Option
        is exercisable in a specified period;

         

	 	(d)
   	that the unexercised portion of a Stock
        Option is "cumulative" so that any portion of a Stock Option exercisable
        (but not exercised) in a specified period may be exercised in subsequent
        periods until the Stock Option terminates; or

         

	 	(e)	that a Stock Option may provide for
        early exercise and/or termination or other adjustment in the event of
        a death of a person;

and other appropriate terms in other circumstances, such as
  if the Corporation shall resolve to sell all or substantially all of its assets,
  to liquidate or dissolve, or to merge, amalgamate, consolidate or be absorbed
  with or into any other corporation, if a take-over bid is made for Common Shares
  of the Corporation, or if any change of control of the Corporation occurs, subject
  to the provisions of Section 12 with respect to Unsolicited Offers (as hereinafter
  defined). 

	7.    Additional Provisions
      Concerning U.S. Optionees
  
	 	(a)
   	Options granted to an Employee
        subject to personal income tax under the United States Internal Revenue
        Code (the "Code"), (such Employee referred to in this Section as
        a "U.S. Employee") will be Incentive Stock Options as that term
        is defined in the Code.

         

	 	(b)
   	Options granted to an optionee
        who is subject to personal income tax under the Code who is not an Employee
        will not be Incentive Stock Options, and any written agreement with such
        an optionee for a grant of options under the Plan will state that the
        options granted thereunder are Non-Qualifying Stock Options for U. S.
        income tax purposes.

         

	 	(c)
   	In addition to the terms
        and conditions of options granted under the Plan listed in Section 6 above,
        options granted to a U.S, Employee will be subject to the following terms
        and conditions:

         

	 	 	(i)
   	options will be designated
        in the written option agreement between the U.S. Employee and TransGlobe
        as Incentive Stock Options; and

         

	 	 	(ii)
   	if the U.S. Employee is
        directly or indirectly the beneficial owner of 10% or more of the combined
        voting power of all classes of shares in the capital of TransGlobe or
        a Subsidiary at the time an option is granted to the U.S. Employee, the
        exercise price of such option will be equal to at least 110% of the Market
        Price of TransGlobe's Common Shares.

         

	 	(d)
   	If a U.S. Employee is granted
        options under the Plan, the written option agreement with the U.S. Employee
        will contain acknowledgements by the U.S. Employee that:

         

	 	 	(i)
   	notwithstanding a designation
        of options granted to a U.S. Employee as Incentive Stock Options, to the
        extent that the aggregate Market Price of the Common Shares subject to
        options which are exercisable for the first time by any U.S. Employee
        during any calendar year exceeds US $100,000, such excess options will
        not be treated as Incentive Stock Options; and

         

	 	 	(ii)
   	in order for options granted
        under the Plan to be treated as Incentive Stock Options:

         

	 	 	 	(A)
   	Common Shares purchased on the exercise
        of an option must not be sold or otherwise disposed of within 2 years
        from the date the option was granted, or within 1 year from the date the
        option was exercised, and

         

	 	 	 	(B)
   	the U.S. Employee must maintain his
        status as a U.S. Employee at all times during the period beginning on
        the date the option is granted and ending on the date 30 days before the
        date the option is exercised.

         

	 	(e)
   	The acknowledgement of the
        U. S. Employee in (d)(ii)B above does not confer upon the U.S. Employee
        any right with respect to continuation of his employment relationship
        with TransGlobe, nor will it interfere in any way with TransGlobe's right
        to terminate his employment relationship at any time, with or without
        cause.

8.    Non-Assignability

      Stock Options shall not be assignable
  or transferable by the Eligible Optionees, except for a limited right of assignment
  to allow the exercise of Stock Options by an Eligible Optionee's legal representative
  in the event of death or incapacity, subject to the terms upon which the Stock
  Option is granted.

 9.    Payment of Exercise Price 

     Except as provided in Section
  10, all Common Shares issued pursuant to the exercise of a Stock Option shall
  be paid for in full by cash, bank draft or money order at the time of exercise
  of the Stock Option and prior to the issue of the shares. All Common Shares
  of the Corporation issued in accordance with the foregoing shall be issued as
  fully paid and non-assessable Common Shares.

 

	10.    Surrender of Stock Options
      in Lieu of Exercise
            Where the Common Shares
        are listed and posted for trading on the Toronto Stock Exchange, the Board
        of Directors may from time to time in its sole discretion, permit Stock
        Options to be surrendered, unexercised to the Corporation in consideration
        of the receipt by the holder of such Stock Options of an amount (the "Settlement
        Amount") equal to the excess, if any, of the aggregate fair market
        value of the shares (based on the Market Price (as hereinafter defined)
        of the Common Shares on the Toronto Stock Exchange on the trading day
        immediately preceding the Surrender Date as herein defined) able to be
        purchased pursuant to the vested and exercisable portion of such Stock
        Options on the date of surrender (the "Surrender Date"), over the
        aggregate Exercise Price for those Common Shares pursuant to those Stock
        Options. The Settlement Amount is payable in cash, Common Shares or a
        combination thereof, as the Board of Directors may from time to time in
        its discretion determine. For greater certainty, those Common Shares underlying
        the unexercised Stock Options that are the subject of retirement in consideration
        for a Settlement Amount, are deemed to be included in the definition of
        Total Common Shares for which Stock Options may be granted under the Plan.

          

	11.    Non-Exercise
            If any Stock Option granted
        pursuant to the Plan is not exercised for any reason whatsoever, the shares
        reserved and authorized for issuance pursuant to such Stock Option shall
        revert to the Plan and shall be available for other Stock Options, however,
        at no time shall there by outstanding Stock Options exceeding in the aggregate
        the number of Common Shares of the Corporation reserved for issuance pursuant
        to Stock Options under this Plan.

         

	12.   Change of Control
            Notwithstanding the terms
        of this Plan, where an Unsolicited Offer for the Common Shares is made,
        all unexercised and unvested outstanding Stock Options granted under the
        Plan shall vest and become immediately exercisable in respect of any and
        all Common Shares for which the holder of Stock Options has not exercised
        the Stock Options (notwithstanding that an agreement relating to the grant
        of Stock Options states that those Stock Options are exercisable only
        during a later period or year) 

            For the purposes hereof,
        an "Unsolicited Offer" means an Offer in respect of which neither the
        Board of Directors of the Corporation nor management of the Corporation
        solicited, sought out, or otherwise arranged for the offeror party to
        make such Offer. For the purposes hereof, "Offer" means an offer made
        generally to the holders of Common Shares in one or more jurisdictions
        to acquire, directly or indirectly, the Common Shares and which is in
        the nature of a "takeover bid" as defined in the Securities Act (Alberta)
        and, where the Common Shares are listed and posted for trading on a stock
        exchange, not exempt from the formal bid requirements of the Securities
        Act (Alberta). Any Stock Option remaining unexercised following the
        earlier of the withdrawal of such Unsolicited Offer and the expiry of
        such Unsolicited Offer in accordance with its terms again becomes subject
        to the original terms of the agreement relating to the grant of Stock
        Options as if the Unsolicited Offer had not been made.

         

	13.    Adjustment in Certain Circumstances
          In the event:

          

	 	(a)
   	of any change in the Common Shares of
        the Corporation through subdivision, consolidation, reclassification,
        amalgamation, merger or otherwise; or

         

	 	(b)
   	of any stock dividend to holders of
        Common Shares of the Corporation (other than such stock dividends issued
        at the option of shareholders of the Corporation in lieu of substantially
        equivalent cash dividends); or

         

	 	(c)	that any rights are granted to holders
        of Common Shares to purchase Common Shares of the Corporation at prices
        substantially below fair market value; or

	 	 	 
	 	(d)	that as a result of any recapitalization, merger, consolidation
      or otherwise the Common Shares of the Corporation are converted into or
      exchangeable for any other shares;

 

	then in any such case the
        Board of Directors of the Corporation may make such adjustment in the
        Plan and in the Stock Options granted under the Plan as the Board of Directors
        of the Corporation may in its sole discretion deem appropriate to prevent
        substantial dilution or enlargement of the rights granted to, or available
        for, holders of Stock Options, and such adjustments may be included in
        the Stock Options.

          

	14.    Expenses

            All expenses in connection with the Plan
        shall be borne by the Corporation.

          

	15.    Compliance
        with Laws

            The Corporation shall
        not be obliged to issue any shares upon exercise of Stock Options if the
        issue would violate any law or regulation or any rule of any governmental
        authority or stock exchange. The Corporation shall not be required to
        issue, register or qualify for resale any shares issuable upon exercise
        of Stock Options pursuant to the provisions of a prospectus or similar
        document, provided that the Corporation shall notify The Toronto Stock
        Exchange or any other stock exchange on which the shares of the Corporation
        are listed and any other appropriate regulatory bodies in Canada of the
        existence of the Plan and the issuance and exercise of Stock Options.

            Transactions under the
        plan are intended to comply with all relevant provisions of law, including,
        without limitation, the United States Securities Act of 1933 and the regulations
        thereunder, all applicable conditions of Rule 16b-3 or its successors
        under Section 16 of the United States Securities Exchange Act of 1934,
        the Securities Act and the regulations thereunder of the province in which
        TransGlobe is resident and the provinces in which optionees may reside,
        and the requirements of The Toronto Stock Exchange, the Nasdaq Stock Market,
        Inc. ("NASDAQ"), and any other stock exchange or market upon which the
        Common Shares may then be listed or quoted (together, the "Applicable
        Laws"). To the extent any provision of the Plan or action by the Board
        fails to so comply, it will be deemed null and void, to the extent permitted
        by law and deemed advisable by the Board.

            TransGlobe will not be
        obligated to issue and deliver any Common Shares pursuant to the exercise
        of any option until, in the opinion of TransGlobe's counsel, all Applicable
        Laws have been complied with. Without limiting the generality of the foregoing,
        TransGlobe may require from the person exercising the option such investment
        representation, undertaking or agreement, if any, as counsel for TransGlobe
        may consider necessary in order to comply with the Applicable Laws.

          

	16.    Form
        of Stock Option Agreement

            All Stock Options shall
        be issued by the Corporation in a form which meets the general requirements
        and conditions set forth in this Plan and the requirements of the Exchange
        or such other exchange on which the shares of the Corporation are listed
        from time to time.

          

	17.   Amendments
        and Termination of Plan

            The Corporation shall
        retain the right to amend from time to time or to terminate the terms
        and conditions of the Plan by resolution of the Board of Directors of
        the Corporation. Any amendments shall be subject to the prior consent
        of any applicable regulatory bodies, including any stock exchange on which
        the Corporation's shares are listed. Amendments and termination shall
        take effect only with respect to Stock Options issued thereafter, provided
        that they may apply to any Stock Options previously issued with the mutual
        consent of the Corporation and the Eligible Optionees holding such Stock
        Options.

          

	18.   Administration of the
        Plan and Regulation

            The Plan will be administered by the Board
        of Directors of TransGlobe (the "Board"). The Board may delegate
        the administration of the Plan to a committee, in which case all references
        to the "Board" hereunder will refer to the committee, except only the
        Board of Directors may allot shares and specify the price at which they
        are to be issued. The Board will have authority, consistent with the Plan:

          

	 	(a)
   	to issue options priced in accordance with the formula set
      forth in this Plan;
 

 

	 	(b)
   	to prescribe the form of certificate
        evidencing grants of options to Canadian optionees and the form of agreement
        evidencing grants of options to US optionees and the form of certificate
        evidencing grants of options to Investors (as defined hereafter) as such
        (which may be in the form of a warrant) and any other instruments required
        under the Plan and to change such forms from time to time;

          

	 	(c)
   	to adopt, amend and rescind rules and
        regulations for the administration of the Plan, provided however, that
        except as specified in Section 13, no amendment which would increase the
        maximum number of Common Shares for which options may be granted will
        be made by the Board without the approval of shareholders and regulatory
        authorities under Applicable Laws; and

          

	 	(d)	to interpret and administer the Plan
        and to decide all questions and settle all controversies that may arise
        in connection with the Plan, all of which decisions of the Board will
        be final and conclusive.

 19.    Tax Consequences of Plan 

      Notwithstanding Section 7, TransGlobe
  does not assume responsibility for the income or other tax consequences for
  optionees or persons eligible under the Plan and they are advised to consult
  with their own tax advisors. 

20.    Applicable Law 

      This Plan shall be governed
  by and construed in accordance with the laws in force in the Province of Alberta.

21.    Stock Exchange 

      To the extent applicable, the
  issuance of any shares of the Corporation pursuant to Stock Options issued pursuant
  to this Plan is subject to approval of the Plan by the Toronto Stock Exchange
  or other stock exchange upon which the Corporation's Common Shares are listed,
  and the Plan shall be subject to the ongoing requirements of such exchange.

 SCHEDULE "A"  

 The maximum number of Common Shares reserved for issuance
  under the Plan (and any prior plans) is revised from time to time to increase
  the maximum number of Common Shares reserved for issuance, as Common Shares
  are issued on exercise of outstanding options, and, effective May 29, 2003,
  the maximum number of Common Shares reserved for issuance under the Plan is
  an aggregate of 7,103,580 Common Shares.Filed by Automated Filing Services Inc. (604) 609-0244 - Silverado Gold Mines Ltd. - Exhibit 10.1

 CONSULTANT AGREEMENT

 This Consultant Agreement (the "Agreement") is made and entered
  into effective as of the 1st day of August, 2003 (the "Effective Date"), between
  SILVERADO GOLD MINES LTD., a British Columbia company, (the "Company")
  and RANDALL ABBOTT, of 3200 21st Street, Suite 300, Bakersfield, California
  93301 (the “Consultant”). 

WHEREAS: 

 A.        The Company is engaged in the
  business of the exploration and development of mineral resource properties and
  the development of an industrial fuel alternative to oil. 

 B.         The Company desires to
  retain the Consultant to provide consultant services to the Company on the terms
  and subject to the conditions of this Agreement. 

 C.         The Consultant has agreed
  to provide consultant services to the Company on the terms and subject to the
  conditions of this Agreement. 

THIS AGREEMENT WITNESSES THAT in consideration of the premises and mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to
be legally bound hereby, agree as follows:

	1.                           DEFINITIONS

       1.1       The following
        terms used in this Agreement shall have the meaning specified below unless
        the context clearly indicates the contrary:

         

	 	(a)
   	"Consultant Shares" shall mean
        the shares of the Company’s common stock issuable to the Consultant
        pursuant to Section 5.1;

         

	 	(b)
   	"Board" shall mean the Board
        of Directors of the Company;

         

	 	(c)
   	"Term" shall mean the term of
        this Agreement beginning on the Effective Date and ending on the close
        of business on the effective date of the termination of this Agreement.

 2.                
            ENGAGEMENT
  AS A CONSULTANT  

 2.1       The Company hereby
  engages the Consultant as a consultant to provide the services of the Consultant
  in accordance with the terms and conditions of this Agreement and the Consultant
  hereby accepts such engagement. 

 3.                           TERM
  OF THIS AGREEMENT  

 3.1                       The
  term of this Agreement shall become effective and begin as of the Effective
  Date, and shall continue until the close of business on the date which is two
  (2) years from the Effective Date of this Agreement, unless this Agreement is
  earlier terminated in accordance with the terms of this Agreement. 

2

	4.                           CONSULTANT
        SERVICES

       4.1                       The
        Consultant agrees to perform the following services and undertake the
        following responsibilities and duties to the Company to be provided by
        the Consultant to the Company as consulting services (the "Consulting
        Services"):

         

	 	(a)
   	Corporate Planning and Business Development

       
	 	•	The Consultant will assist the Company
        with developing business strategies for the development of the Company’s
        alternate fuel technology.

         

	 	• 	The Consultant will liaise with the
        United States Department of Energy in connection with development and
        financing the Company’s alternate fuel technology.

         

	 	• 	The Consultant will assist the Company
        in the identification of available government grants and financial assistance
        for the Company’s alternate fuel technology and assist in the preparation
        of applications to applicable government agencies, including the Department
        of Energy, for grants and other financial assistance to develop the Company’s
        alternate fuel technology.

         

	 	(b)
   	reporting to the President of Company;

	 	(c)
   	performing such other duties
        and observing such instructions as may be reasonably assigned from time
        to time by the President of the Company, provided such duties are within
        the scope of the Company’s business and services to be provided by
        the Consultant.

          

	4.2                       The
        Consultant shall devote his full time, attention and energies to the business
        affairs of the Company as may be reasonably necessary for the provision
        of the Consulting Services, provided, however, the Consultant may engage
        in reasonable investment and other personal activities that do not interfere
        with the Consultant's obligations hereunder.

       4.3                       In
        providing the Consulting Services, the Consultant will:

          

      

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

         

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

         

	 	(c)
   	not disclose, release or
        publish any information regarding the Company without the prior written
        consent of the Company.

          

	4.4                      The
      Consultant will at all times be an independent contractor and the Consultant
      will not be deemed to be an employee of the Company.
   

3

	4.5                        The
        Consulting Services provided under this Agreement shall 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 providing investor relations
        or shareholder communications;

         

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

         

	5.                           CONSULTANT
        FEE

       5.1                       During
        the term of this Agreement and in consideration for the provision of the
        Consulting Services, the Company will issue to the Consultant an aggregate
        maximum of 400,000 common shares of the Company on the following basis,
        if the Consulting Services are provided for the full term of this Agreement:

	Number of Common Shares	Date of Issue
	50,000	August 1, 2003
	50,000	November 1, 2003
	50,000	February 1, 2004
	50,000	May 1, 2004
	50,000	August 1, 2004
	50,000	November 1, 2004
	50,000	February 1, 2005
	50,000	May 1, 2005
	400,000	TOTAL

 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. 

 Additionally the Company will grant to the Consultant the
  option to purchase 600,000 additional shares of the Company as follows:

	- 	Options to purchase 200,000 shares at an exercise price
        of $0.20 to vest on October 31, 2003; 

 4

	-	Options to purchase 200,000 shares at an exercise price of $0.30 to vest
      on April 30, 2004; 
	- 	Options to purchase 200,000 shares at an exercise price
        of $0.40 to vest on October 31, 2004;

 All options will be granted pursuant to the Company’s
  2003 Stock Option Plan and will be subject to the Company’s 2003 Stock
  Option Plan. All options will expire after a two year period from the Effective
  Date of this Agreement. All options will vest on the vesting date above, provided
  that no options will vest subsequent to termination of this Agreement for any
  reason. No option will be exercisable until vested. All vested options will
  terminate automatically on the 30th day following termination of this Agreement
  by the Company for any reason. 

	6.                            REIMBURSEMENT
        OF EXPENSES

       6.1                       The
        Company will pay to the Consultant the reasonable travel and promotional
        expenses and other specific expenses incurred by the Consultant in provision
        of the Consulting Services, provided the Consultant has obtained the prior
        written approval of the Company.

          

	7.                            TERMINATION

       7.1                       The
        Company may terminate this Agreement at any time upon the occurrence of
        any of the following events of default (each an “Event of Default”):

          

	 	(a)
   	the Consultant’s commission of an act of fraud, theft
      or embezzlement or other similar willful misconduct;

       
	 	(b)
   	the neglect or breach by the Consultant of his material obligations
      or agreements under this Agreement; or

       
	 	(c)
   	the Consultant’s refusal to follow lawful directives
      of the President of the Company,

        

 provided that notice of the Event of Default has been delivered
  to the Consultant and provided the Consultant has failed to remedy the default
  within seven days of the date of delivery of notice of the Event of Default,
  if the default is of such a nature that it is capable of remedy. 

 7.2                       The
  Company may at its option terminate this Agreement in the absence of an Event
  of Default by delivering three months’ notice of termination to the Consultant.

 7.3                       The
  Consultant may terminate this Agreement at any time, provided that thirty days
  prior written notice of termination has been delivered to the Company. 

5

 7.4                       On
  termination of this Agreement for any reason, all rights and obligations of
  each party that are expressly stated to survive termination or continue after
  termination will survive termination and continue in full force and effect as
  contemplated in this Agreement. 

 7.5                       Upon
  termination, the Consultant will not be entitled to receive any additional Consultant
  Shares, other than those Consultant Shares issuable in respect of services provided
  up to the date of termination. 

 8.                           PROPRIETARY
  INFORMATION  

 8.1                      The
  Consultant will not at any time, whether during or after the termination of
  this Agreement for any reason, reveal to any person or entity any of the trade
  secrets or confidential information concerning the organization, business or
  finances of the Company or of any third party which the Company is under an
  obligation to keep confidential, except as may be required in the ordinary course
  of performing the Consultant Services to the Company, and the Consultant shall
  keep secret such trade secrets and confidential information and shall not use
  or attempt to use any such secrets or information in any manner which is designed
  to injure or cause loss to the Company. Trade secrets or confidential information
  shall include, but not be limited to, the Company's financial statements and
  projections, expansion proposals, business plans and details of its business
  relationships with banks, lenders and other parties not otherwise publicly available.

 9.                          RELIEF
   

 9.1                      The
  Consultant hereby expressly acknowledges that any breach or threatened breach
  by the Consultant of any of the terms set forth in Section 8 of this Agreement
  may result in significant and continuing injury to the Company, the monetary
  value of which would be impossible to establish, and any such breach or threatened
  breach will provide the Company with any and all rights and remedies to which
  it may be entitled under the law, including but not limited to injunctive relief
  or other equitable remedies. 

 10.                    INDEMNIFICATION
   

 10.1                The
  Consultant will indemnify and defend and hold the Company harmless against any
  claims, actions, suits, proceedings, investigations, losses, expenses, demands,
  obligations, liabilities, judgments, fines, fees, costs and expenses (including
  costs and reasonable attorney fees) and any amounts paid in settlements in any
  of the foregoing which arise or result from or are related to any breach or
  failure of the Consultant to perform any of its covenants and agreements set
  forth in this Agreement. The indemnification provisions of this paragraph shall
  survive the termination and expiration of this Agreement.  

 11.                    PARTIES
  BENEFITED; ASSIGNMENTS  

 11.1                This
  Agreement shall be binding upon, and inure to the benefit of, the Consultant,
  his heirs and his personal representative or representatives, and upon the Company
  and its successors and assigns. Neither this Agreement nor any rights or obligations
  hereunder may be assigned by the Consultant. 

6

 12.                    NOTICES
   

 12.1                Any
  notice required or permitted by this Agreement shall be in writing, sent by
  registered or certified mail, return receipt requested, or by overnight courier,
  addressed to the Board and the Company at its then principal office, or to the
  Consultant at the address set forth in the preamble, as the case may be, or
  to such other address or addresses as any party hereto may from time to time
  specify in writing for the purpose in a notice given to the other parties in
  compliance with this Section 12. Notices shall be deemed given when delivered.

 13.                   GOVERNING
  LAW  

 13.1                This
  Agreement shall be governed by and construed in accordance with the laws of
  the State of Nevada and each party hereto adjourns to the jurisdiction of the
  courts of the State of Nevada. 

 14.                    REPRESENTATIONS
  AND WARRANTIES  

 14.1                The
  Consultant represents and warrants to the Company that (a) the Consultant is
  under no contractual or other restriction which is inconsistent with the execution
  of this Agreement, the performance of his duties hereunder or other rights of
  Company hereunder, and (b) the Consultant is under no physical or mental disability
  that would hinder the performance of his duties under this Agreement. 

 15.                    MISCELLANEOUS
   

 15.1                This
  Agreement contains the entire agreement of the parties relating to the subject
  matter hereof. 

 15.2                This
  Agreement supersedes any prior written or oral agreements or understandings
  between the parties relating to the subject matter hereof. 

 15.3                No
  modification or amendment of this Agreement shall be valid unless in writing
  and signed by or on behalf of the parties hereto. 

 15.4                A
  waiver of the breach of any term or condition of this Agreement shall not be
  deemed to constitute a waiver of any subsequent breach of the same or any other
  term or condition. 

 15.5                This
  Agreement is intended to be performed in accordance with, and only to the extent
  permitted by, all applicable laws, ordinances, rules and regulations. If any
  provision of this Agreement, or the application thereof to any person or circumstance,
  shall, for any reason and to any extent, be held invalid or unenforceable, such
  invalidity and unenforceability shall not affect the remaining provisions hereof
  and the application of such provisions to other persons or circumstances, all
  of which shall be enforced to the greatest extent permitted by law. 

7

 15.6                The
  headings in this Agreement are inserted for convenience of reference only and
  shall not be a part of or control or affect the meaning of any provision hereof.

 15.7                The
  Consultant may assign the benefit of this Agreement to a private corporation
  controlled by the Consultant, provided that such assignment will not relieve
  the Consultant from his obligations to the Company arising under this Agreement.

 15.8                This
  Agreement replaces and supercedes all other consultant and employment agreements
  between the Company and the Consultant and any amendments hereto. 

 15.9                The
  Consultant acknowledges and agrees that Cane O’Neill Taylor, LLC has acted
  solely as legal counsel for the Company and that the Consultant has been recommended
  to obtain independent legal advice prior to execution of this Agreement. 

IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first written above.

SILVERADO GOLD MINES LTD. 

  by its authorized signatory: 

	/s/ Garry L. Anselmo  	 	 
	

	 	 
	Signature of Authorized Signatory 	 	 
	 	 	 
	GARRY L. ANSELMO 	 	 
	

	 	 
	Name of Authorized Signatory 	 	 
	 	 	 
	PRESIDENT	 	 
	

	 	 
	Position of Authorized Signatory 	 	 
	 	 	 
	 	 	 
	SIGNED, SEALED AND DELIVERED	 	 
	BY RANDALL ABBOTT	 	 
	in the presence of: 	 	 
	 	 	 
	/s/ Sheryl R. Daniel 	 	/s/ Randall Abbott 
	

	 	

	Signature of Witness 	 	RANDALL ABBOTT 
	 	 	 
	9108 Thurber Lane 	 	 
	

	 	 
	Address of Witness 	 	 
	 	 	 
	Bksf, CA 93311

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