UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: May 31, 2010

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: 000-12132

SILVERADO GOLD MINES LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED 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 1820,
Vancouver, British Columbia, Canada	V6E 4M3
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number: (800) 665-4646

Former name, former address, and former fiscal year, if changed since last report: N/A

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [ ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [ X ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,928,296, 846 common shares, no par value, outstanding as of July 13, 2010.

1

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES
(An Exploration Stage Company)

INDEX

Quarterly Period Ended May 31, 2010

Page

PART I	FINANCIAL INFORMATION
	ITEM 1	FINANCIAL STATEMENTS	3
		Consolidated Balance Sheets as of May 31, 2010 (unaudited) and November 30, 2009 (audited)	3
		Consolidated Statements of Operations and Other Comprehensive Loss for the three months and six months ended May 31, 2010 and 2009, and for the period from December 1, 2001 (Recommencement of Exploration Stage) through May 31, 2010 (unaudited)	4
		Consolidated Statements of Cash Flows for the six months ended May 31, 2010 and 2009, and for the period from December 1, 2001 (Recommencement of Exploration Stage) through May 31, 2010 (unaudited)	5
		Notes to the Consolidated Financial Statements as of May 31, 2010 (unaudited)	6-31
	ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32-43
	ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
	ITEM 4	CONTROLS AND PROCEDURES	45
PART II	OTHER INFORMATION
	ITEM 1	LEGAL PROCEEDINGS	46
	ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	46
	ITEM 3	DEFAULTS UPON SENIOR SECURITIES	46
	ITEM 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	46
	ITEM 5	OTHER INFORMATION	46
	ITEM 6	EXHIBITS	47-48
SIGNATURES			49

2

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Stated In United States Dollars)

		May 31, 2010			November 30, 2009
		(Unaudited)			(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$	34,298		$	-
Gold inventory		6,316			6,316
Prepaid and other receivables		83,796			738,473
Total Current Assets		124,410			744,789
Mineral rights		1,478,601			1,398,601
Property, plant and equipment, net		905,206			1,002,009
TOTAL ASSETS	$	2,508,217		$	3,145,399
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	$	1,183,167		$	882,768
Due to related parties		1,001,884			1,064,046
Promissory note		50,000			-
Convertible debt instruments		178,603			69,760
Total Current Liabilities		2,413,654			2,016,574
Asset retirement obligation		553,917			540,407
Mineral claims royalty payable		550,000			470,000
Total Liabilities		3,517,571			3,026,981
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock
Authorized:               unlimited common shares with no par value
Issued and outstanding:               1,811,952,777 common shares (2009: 1,577,667,073)		101,936,928			100,883,269
Additional paid-in capital		1,217,991			1,206,124
Subscriptions received		80,950			100,000
Accumulated deficit during exploration stage		(104,245,223	)		(102,070,975	)
Total Stockholders' (Deficit) Equity		(1,009,354	)		118,418
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	2,508,217		$	3,145,399

The accompanying notes are an integral part of these consolidated financial statements
3

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

(UNAUDITED)

(Stated In United States Dollars)

														Period Since
														Recommencement of
														Exploration Stage from
		Three Months Ended May 31,						Six Months Ended May 31,						December 1, 2001 to
		2010			2009			2010			2009			May 31 2010
General and administrative expenses
Accounting and auditing	$	11,707		$	28,453		$	18,590		$	36,943		$	853,712
Advertising, promotion and travel		3,371			10,607			15,422			22,739			3,026,025
Consulting fees		298,361			911,414			861,528			1,650,057			11,393,216
Depreciation, accretion and impairment		54,813			59,349			110,314			130,334			2,899,561
Exploration expenses		193,537			180,323			272,514			291,708			15,842,829
Financing activities		362			-			362			-			389,865
Legal and other professional fees		44,871			59,006			236,690			157,607			1,802,837
Management services		22,431			199,179			68,848			430,873			6,467,835
Office expenses		157,781			84,395			233,391			169,818			5,183,329
Related party charges in excess of costs incurred		32,743			144,406			40,156			291,180			4,951,244
Reporting and investor relations		72,942			106,125			130,981			168,941			1,474,332
Research		-			-			-			-			1,064,735
Transfer agent and filing fees		12,571			12,151			30,323			59,484			410,154
Write-off of mineral claim expenditures		-			-			-			-			1,159,529
Write-down of property, plant and equipment		-			-			-			-			329,679
Total expenses		905,490			1,795,438			2,019,119			3,409,684			57,248,882
Loss from operations		(905,490	)		(1,795,438	)		(2,019,119	)		(3,409,684	)		(57,248,882	)
Gold income earned during the exploration stage
Gold sale proceeds earned during the exploration stage		-			-			-			52,450			3,714,310
Cost of gold sold		-			-			-			(43,790	)		(3,250,373	)
Gold inventory addition from gold extraction		-			-			-			-			3,248,056
Total gold income earned during the exploration stage		-			-			-			8,660			3,711,993
Other income (expenses)
Interest and other income		44			19			77			64			278,067
Interest expenses on capital lease obligations		-			-			-			-			(333,221	)
Financing costs on convertible debentures		(7,147	)		2,800			(20,710	)		-			(728,193	)
Other interest expenses and bank charges		(82,661	)		(5,226	)		(89,638	)		(7,098	)		(161,847	)
Commitment fees		-			(960,000	)		-			(960,000	)		(960,000	)
Loss on disposal of property, plant and equipment		-			(173,921	)		-			(173,921	)		(279,529	)
Forgiveness of convertible debentures and accrued interests		-			260,827			-			260,827			260,827
Total other expenses		(89,764	)		(875,501	)		(110,271	)		(880,128	)		(1,923,896	)
Net loss before cumulative effect of accounting change		(995,254	)		(2,670,939	)		(2,129,390	)		(4,281,152	)		(55,460,785	)
Cumulative effect of accounting change		-			-			-			-			(99,481	)
Net loss		(995,254	)		(2,670,939	)		(2,129,390	)		(4,281,152	)		(55,560,266	)
Other comprehensive income (loss)
(Loss) / Gain on foreign exchange		(41,817	)		(72,747	)		(44,858	)		(23,088	)		219,987
Net comprehensive loss for the period	$	(1,037,071	)	$	(2,743,686	)	$	(2,174,248	)	$	(4,304,240	)	$	(55,340,279	)
Net loss per share	$	(0.001	)	$	(0.003	)	$	(0.001	)	$	(0.004	)
Basic and diluted weighted average number of common shares outstanding		1,698,496,790			1,194,429,237			1,679,604,824			1,102,804,863

The accompanying notes are an integral part of these consolidated financial statements
4

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Stated In United States Dollars)

								Period Since
								Recommencement of
								Exploration Stage from
		Six Months Ended May 31,						December 1, 2001 to
		2010			2009			May 31, 2010
CASH AND CASH EQUIVALENTS PROVIDED BY (USED IN):
Operating activities:
Net comprehensive loss for the period	$	(2,174,248	)	$	(4,304,240	)	$	(55,340,279	)
Adjustments to reconcile net comprehensive loss to net cash used in operating activities:
Cumulative effect of accounting change		-			-			99,481
Depreciation, amortization, accretion and impairment		110,314			130,334			2,899,561
Loss on disposal of property, plant and equipment		-			173,921			279,529
Stock-based compensation included in management fees		-			-			3,375,644
Stock issued for debenture		-			-			217,687
Non-cash consulting and other expenses resulting from share issuance		514,134			1,330,132			6,400,172
Non-cash prepaid consulting fees expensed during the period		679,530			333,500			1,013,030
Non-cash commitment fees resulting from share issuance		61,100			960,000			1,021,100
Non-cash financing expense		-			-			252,003
Financing costs accrued or incurred on convertible debentures		20,710			-			518,756
Forgiveness of convertible debentures and accrued interests		-			(260,827	)		(260,827	)
Write-off of mineral claim expenditures		-			-			1,159,529
Write-down of property, plant and equipment		-			-			329,679
Changes in non-cash operating assets and liabilities:
Gold inventory		-			43,790			2,317
Prepaid and other receivables		(3,855	)		5,673			(22,588	)
Accounts payable and accrued liabilities		300,398			159,404			686,260
Asset retirement obligation		-			-			(2,336	)
Net cash used in operating activities		(491,917	)		(1,428,313	)		(37,371,282	)
Investing activities:
Investment in mineral properties		-			-			(1,245,101	)
Purchase of property, plant and equipment		-			(2,001	)		(3,079,696	)
Proceeds from sale of property, plant and equipment, net		-			222,509			825,299
Net cash provided by (used in) investing activities		-			220,508			(3,499,498	)
Financing activities:
Advances (to) from related party		(62,162	)		429,715			710,572
Repayment of loans payable		-			-			(110,728	)
Repayment of capital lease obligation		-			-			(1,131,607	)
Convertible debentures, net		120,000			-			195,000
Promissory note		50,000			-			50,000
Share subscriptions received		80,950			250,000			80,950
Common stock issued for cash (net of share issue costs)		337,427			507,000			41,093,798
Net cash provided by financing activities		526,215			1,186,715			40,887,985
Increase (Decrease) in cash and cash equivalents		34,298			(21,090	)		17,205
Cash and cash equivalents, at beginning of the period		-			50,991			17,093
Cash and cash equivalents, at end of the period	$	34,298		$	29,901		$	34,298
Supplemental Cash Flow Information (Note 14)

The accompanying notes are an integral part of these consolidated financial statements
5

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 1 – Nature and Continuance of Operations

Silverado Gold Mines Ltd. (“Silverado” or the “Company”) was incorporated under the laws of British Columbia, Canada in June 1963. The Company is engaged in the exploration of mineral properties in the State of Alaska, through its wholly-owned subsidiary, Silverado Gold Mines Inc. (incorporated under the laws of the State of Alaska, U.S.A. on May 29, 1981) and in the research and development of low-rank coal-water fuel as a replacement fuel for oil fired boilers and utility generators through its other wholly-owned subsidiary, Silverado Green Fuel, Inc. (incorporated under the laws of the State of Alaska, U.S.A. on August 14, 2006).

The accompanying interim consolidated financial statements have been prepared assuming the Company will continue as a going concern, which implies that the Company would continue to realize its assets and discharge its liabilities in the normal course of business. The Company lacks sufficient working capital, has receiving losses and its operations continue to be funded primarily from sales of its stock and the sale of gold extracted during exploration activities. The ability of the Company to continue as a going concern, including completion of the acquisition, exploration and development of its mineral properties and completion of the research and development of its low-rank coal-water fuel project is dependent on the Company’s ability to obtain the necessary financing from sales of its stock and debt financings. The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies

These interim consolidated financial statements are prepared in conformity with United States of America generally accepted accounting principles (“GAAP”). The application of Canadian generally accepted accounting principles to these financial statements would not result in material measurement or disclosure differences.

The unaudited interim consolidated financial statements do not include all information and footnote disclosures required under GAAP. In management’s opinion, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of the financial position as of May 31, 2010, and the results of operations and cash flows for all periods presented, have been included. Readers of these financial statements should note that interim results for the periods presented are not necessarily indicative of the results that can be expected for the entire fiscal year as a whole.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Silverado’s Annual Report on Form 10-K, for the fiscal year ended November 30, 2009.

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

The consolidated financial statements include the accounts of Silverado Gold Mines Ltd. and its wholly-owned subsidiaries Silverado Gold Mines Inc. and Silverado Green Fuel Inc. All significant inter-company transactions have been eliminated.

6

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (Continued)

a) Basis of Consolidation (Continued)

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 the U.S. dollar at the rates of exchange in effect at the consolidated balance sheet date. Non-monetary assets and liabilities are translated at the rate in effect at the time at which the transactions took place. Revenue and expense transactions are translated at the average rate of exchange for the period. Foreign exchange gains and losses are included in the determination of results from operations for the periods as other comprehensive gains and losses.

b) Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Accounting Standards Codification (“ASC”) 105, “Generally Accepted Accounting Principles”, which establishes the FASB ASC as the sole source of authoritative GAAP. All existing accounting standards are superseded as described in FASB ASC No. 168, aside from those issued by the SEC. All other accounting literature not included in the Codification is non-authoritative. In accordance with the ASC, references to previously issued accounting standards have been replaced by ASC references. Subsequent revisions to GAAP will be incorporated into the ASC through Accounting Standards Updates (“ASU”). Pursuant to this codification, the Company has updated references to GAAP in its financial statements.

c) Exploration Stage Company

The Company has not generated revenues since recommencement of the exploration stage from December 1, 2001, and is considered to be in the development stage, as defined in FASB ASC 915-10-05. However, the Securities and Exchange Commission’s Industry 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 FASB ASC 915-10-05, if applicable. Accordingly, the Company has been referred to as an exploration stage company, not a development stage company. Accumulated results of operations and cash flows are presented from December 1, 2001, the date the Company re-entered the exploration stage.

d) 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.

7

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (Continued)

e) Basic and Diluted Loss Per Share

Basic loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding during the period. 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) Fair Value of Financial Instruments

FASB ASC 820, “Fair Value Measurements and Disclosures”, defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value, as required by Topic 820 of the FASB ASC, must maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The carrying value of gold inventory, receivables, accounts payable and accrued liabilities, mineral claims royalty payable and payable to related party approximate fair value because of the short-term maturity of these instruments. The carrying amounts reported in the balance sheets for convertible debentures approximate their fair values as of the date of issuance. 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.

g) Convertible Debt Instruments

The Company separately accounts for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on our non-convertible borrowing cost at the issuance date. Accordingly, the Company has recorded the liability components of the convertible debentures at fair value as of the date of issuance based on effective interest rate and amortized the resulting discount as an increase to interest expense over the expected life of the debt. The excess proceeds received over the fair value of the debt at the date of issuance are attributed to the conversion feature of the convertible debentures and included in additional paid-in capital on the consolidated balance sheets. The Company will account for any embedded conversion features, if there are any, in accordance with ASC 470-20, “Debt With Conversion and Other Options”.

h) Gold Inventory

The Company values its gold inventories at the lower of cost or market. Since the Company is still in the exploration stage, by definition, the Company’s direct and absorbed costs would exceed the market value of any gold recovery. Therefore, the Company values gold inventory additions from gold extraction at the spot price as of the date of the addition to the gold inventory, and records the costs of gold inventory sold on a first-in first-out basis. Gold sale proceeds and cost of gold sold are recorded as other income earned during the exploration stage.

8

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (Continued)

i) Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes”. FASB ASC 740 prescribes the use of the liability method thereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized.

FASB ASC 740-10 also clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognizing, measurement and classification of amounts relating to uncertain tax positions, accounting for and disclosure of interest and penalties, accounting in interim periods, disclosures and transition relating to the adoption of the new accounting standard.

j) Mineral Rights Payments and Exploration Costs

Pursuant to EITF 04-02, “Whether Mineral Rights are Tangible or Intangible Assets and Related Issues”, the Company has modified its accounting policy in 2008 with respect to mineral claim payments, retroactively effective to June 1, 2004, to capitalize the direct costs to acquire or lease mineral properties and mineral rights as tangible assets. The direct costs include the costs of signature (lease) bonuses, options to purchase or lease properties, and brokers’ and legal fees. If the acquired mineral rights relate to unproven properties, the Company does not amortize the capitalized mineral costs, but evaluates the capitalized mineral costs periodically for impairment. The Company expenses all costs related to the exploration of mineral claims in which it had secured exploration rights prior to establishment of proven and probable reserves.

When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property are capitalized. Capitalized costs related to such property will be amortized using the units-of-production method over the estimated life of the probable reserve.

k) Asset Retirement Obligation

The Company adopted FASB ASC 410-20, “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.

FASB ASC 410-20 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.

9

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (Continued)

l) 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, 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 differ from these estimates or assumptions.

m) Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and they comprise cash on hand, deposits held with banks and other highly liquid investments. Highly liquid investments are readily convertible to cash and generally have maturities of three months or less from the time acquired. The Company places its cash and cash equivalents with high quality financial institutions which the Company believes limits credit risks.

n) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided on a straight line basis as follows:

Mining equipment	10 years
Auto and trucks	5 years
Computer equipment	3 years
Computer software	1 year
Leasehold improvements	5 – 7 years
Furniture and fittings	10 years

o) Concentration of Credit Risk and Foreign Exchange Rate Risk

Financial instruments which potentially subject the Company to concentrations of credit risk and foreign exchange rate risk consist principally of cash in banks. The Company deposits its cash in high credit quality financial institutions which the Company believes reduces these risks.

p) Revenue Recognition

Proceeds from the sale of gold recoveries from test mining are recorded as other income earned during the exploration stage, retroactively effective from the period since recommencement of exploration stage from December 1, 2001.

q) Long Lived Asset Impairment

In accordance with FASB ASC 360-10, “Impairment or Disposal of Long-Lived Assets”, long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

10

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (Continued)

r) Accounting for Stock-based Compensation

The Company follows FASB ASC 718, “Compensation – Stock Compensation”, requiring equity awards granted under its stock option plan to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award. Prior to December 1, 2006, the Company accounted for awards granted under its stock option plans utilizing the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), and related interpretations, and provided the required pro forma disclosures prescribed by SFAS 123, “Accounting for Stock-Based Compensation”, as amended. Under the existing stock option plans, all options vest entirely on the grant date. Therefore, there were no partially vested options outstanding as of the FASB ASC 718 adoption date.

s) Research Expenditures

Research expenditures are expensed in the year incurred.

t) Reclassifications

Certain prior years’ comparative figures have been reclassified to conform to the financial statement presentation adopted for this year.

u) Recent Accounting Pronouncements

FASB ASU 2010-17 Revenue Recognition – Milestone Method (Topic 605) (“ASU 2010-17”). This Update provides guidance on defining a milestone under Topic 605 and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. Consideration that is contingent on achievement of a milestone in its entirety may be recognized as revenue in the period in which the milestone is achieved only if the milestone is judged to meet certain criteria to be considered substantive. Milestones should be considered substantive in their entirety and may not be bifurcated. An arrangement may contain both substantive and nonsubstantive milestones that should be evaluated individually. The amendments in this Update are effective on a retrospective or prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. The Company is currently evaluating the early adoption option and does not anticipate that the adoption would have a material impact on the consolidated financial statements.

FASB ASU 2009-13 Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). ASU 2009-13 allows the allocation of consideration in multiple deliverable arrangements to be more reflective of the transaction’s economics and may result in earlier revenue recognition. The new guidance is effective for fiscal years beginning after June 15, 2010 and may be applied retrospectively or prospectively for new or materially modified arrangements. In addition, early adoption is permitted. The Company is currently evaluating the early adoption option and does not anticipate that the adoption would have a material impact on the consolidated financial statements.

The Company has evaluated all other recently issued pronouncements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

11

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 3 – Gold Inventory

The Company’s test production in past years has yielded gold dust and gold nuggets. Gold dust has yielded sales prices equivalent to the spot gold price. Gold nuggets, however, are considered to be gem or jewelry items, which in the industry sell at a higher price than the spot price. They are valued according to weight, purity, character, and relative flatness (wearing quality). Historically, the Company’s gold nuggets have sold at prices above the spot gold price.

There were no changes in gold inventory during the six months ended May 31, 2010. For the six months ended May 31, 2009, the Company sold 58.15 troy ounces of gold for net proceeds of $52,450, which were recorded as other income earned during the exploration stage. In addition, the Company wrote off 8.45 troy ounces gold inventory for the inventory shrinkage during the period ended May 31, 2009, the value of which is $5,556 recorded as cost of gold sold. The following is a summary of gold inventory changes during the six months ended May 31, 2010 and during the fiscal year ended November 30, 2009:

				Weighted
	Troy Ounces			Average price		Value
Balance as of November 30, 2008	76		$	657.50	$	50,106
Cost of gold sold	(66	)		657.50		(43,790	)
Balance as of November 30, 2009	10			657.50		6,316
Cost of gold sold	-			-		-
Balance as of May 31, 2010	10		$	657.50	$	6,316

Note 4 – Prepaid and Other Receivables

Prepaid and other receivables consist of:

		May 31, 2010		November 30, 2009
Prepaid consulting and other fees resulting from share issuance	$	58,333	$	608,640
Shares issued for attorney retainer		-		108,225
Total prepaid expenses sesulting from share issuance		58,333		716,865
Insurance deposits, GST refund and others		25,463		21,608
Total	$	83,796	$	738,473

During the six months ended May 31, 2010, the Company issued an aggregate of 104,327,983 shares of the Company’s common stock for consulting and other service fees, valued at the fair market price at the dates of the agreements or at the dates of shares issued in accordance with the agreements, for total consideration of $596,233, of which $20,998 was recorded as prepaid expenses based on the terms of the agreements. The Company expensed $20,998 of these prepaid expenses during the six months ended May 31, 2010.

During the fiscal year ended November 30, 2009, the Company issued an aggregate of 218,319,102 shares of the Company’s common stock for consulting and other service fees, valued at the fair market price at the dates of the agreements or at the dates of shares issued, for total consideration of $3,158,697, of which $716,865 was recorded as prepaid expenses. The Company expensed $658,532 of these prepaid expenses during the six months ended May 31, 2010, and the balance of $58,333 remains in prepaid expenses at May 31, 2010.

12

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 5 – Mineral Properties and Mineral Rights

The Company holds interests in four groups of mineral properties, Nolan, Ester Dome, Hammond and Eagle Creek, in Alaska, U.S.A. All of these properties are in the exploration stage and have no proven reserves as of May 31, 2010. The Nolan property has a probable reserve; however, a more extensive feasibility study is required to ascertain if such probable reserve can be classified as a proven reserve.

Pursuant to EITF 04-02, “Whether Mineral Rights are Tangible or Intangible Assets and Related Issues”, the Company, retroactively effective to June 1, 2004, has capitalized the direct costs to acquire or lease mineral properties and mineral rights as tangible assets. The direct costs include the costs of signature (lease) bonuses, options to purchase or lease properties, and brokers’ and legal fees. Since the Company has no proven reserves on its properties as of May 31, 2010, the Company does not amortize the capitalized mineral costs, but evaluates the capitalized mineral costs periodically for impairment in accordance with EITF 04-02 and has not recognized any impairment. A summary of such capitalized direct costs for the six months ended May 31, 2010 and for the fiscal year ended November 30, 2009 is as follows:

Capitalized Mineral Rights:		Nolan		Ester Dome		Hammond		Eagle Creek		Total
		(a)		(b)		(c)		(d)
Balance as of November 30, 2008	$	658,319	$	31,722	$	437,500	$	70,050	$	1,197,591
Additions during the year:
Claim fees paid during the year		85,540		8,980		8,400		13,090		116,010
Royalty payment		-		-		-		5,000		5,000
Accrued royalty payment		-		-		80,000		-		80,000
Balance as of November 30, 2009		743,859		40,702		525,900		88,140		1,398,601
Additions during the period:
Accrued royalty payment		-		-		80,000		-		80,000
Balance as of May 31, 2010	$	743,859	$	40,702	$	605,900	$	88,140	$	1,478,601

a) Nolan Gold Project, Wiseman Mining District, Alaska

The Nolan Gold Project consists of 5 contiguous claim groups covering approximately 6 square miles, 8 miles west of Wiseman and 175 miles north of Fairbanks, Alaska. In addition, The Clara Creek and Marion Creek claim groups are located approximately 1.5 and 3 miles north of Coldfoot, Alaska, and are situated near the Dalton Highway. Both Clara Creek and Marion Creeks are left limit tributaries to the Middle Fork of the Koyukuk River. In total, the Company owns a 100% interest in 204 federal placer mining claims and 407 federal lode claims in the Nolan Gold Project. The specific claim groups at this site are as follows:

i)	Nolan Placer: This claim group consists of 148 unpatented federal placer claims.
ii)	Thompson’s Pup: This claim group consists of 6 unpatented federal placer claims and is subject to a royalty of 3% of net profits on 80% of production.
iii)	Dionne (Mary’s Bench): This claim group consists of 15 unpatented federal placer claims.
iv)	Smith Creek: This claim group consists of 28 unpatented federal placer claims.
v)	Marion Creek and Clara Creek: This claim group consists of 2 unpatented federal placer mining claims located on Marion Creek and 5 unpatented federal placer mining claims located on Clara Creek.
vi)	Nolan Lode: this claim group consists of 407 unpatented federal lode claims. The lode claims overlie much of the placer properties extend beyond them.

13

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 5 – Mineral Properties and Mineral Rights (Continued)

During the fiscal year ended November 30, 2009, the Company paid claim maintenance and holding fees of $85,540 to the Bureau of Land Management (“BLM”). The Company currently is in a transitional phase between exploration and development on this property. The preliminary feasibility study, effective January 1, 2009 and amended on June 1, 2009 to reflect additional data, supported a probable mineral reserve of antimony and gold underlying the southwestern portion of the Solomon Shear Zone, an area referred to by the Company as Workman’s Bench.

b) 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)	Grant Mine: This property consists of 26 state mineral claims subject to payments of 15% of net profits until $2,000,000 has been paid and 3% of net profits thereafter. The mill has remained inactive since February 1989 and the plant and equipment cost was written down to zero on our accounting records. During fiscal 2009, the work on Grant Mine was limited to assessment work.
ii)	May (St. Paul)/Barelka: This gold property consists of 22 state mineral claims subject to payments of 15% of net profits until $2,000,000 has been paid and 3% of net profits thereafter.
iii)	Dobb’s: This property consists of 1 unpatented Federal mineral claim and 4 State mineral claims subject to payments of 15% of net profits until $1,500,000 has been paid and 3% of net profits thereafter.

The Company has maintained claim rental payments and continued with assessment work for this property. During the fiscal year ended November 30, 2009, the Company paid state mining claim fees of $8,840 to the State of Alaska Department of Natural Resources and federal mining claim fees of $140 to BLM.

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 has leased this property from Alaska Mining Company, Inc. (“Alminco”) since December 14, 1994 and 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 of May 31, 2010, the capitalized mineral rights of $605,900 (November 30, 2009: $525,900) for the Hammond property includes royalty accruals totalling $550,000 (November 30, 2009: $470,000) that are unpaid, and are included in mineral claims payable on the accompanying consolidated balance sheets. During the six months ended May 31, 2010, the Company accrued $80,000 in payable royalties. During the fiscal year ended November 30, 2009, the Company paid $8,400 in federal claim fees to BLM.

d) Eagle Creek Property, Fairbanks Mining District, Alaska

This property consists of 77 state mineral claims. All claims are contiguous and are located in the Fairbanks North Star Borough. The Company owns a 50% interest and has an option to purchase a full 100% interest in the property for $400,000, towards which $43,000 remains to be paid. A payment in the amount of $5,000 is due on August 1^st of each year until the remaining $43,000 is paid. Such yearly payment is required to keep the option in good standing. Ownership of the claims is in the name of the Company’s subsidiary, Silverado Gold Mines Inc. During the fiscal year ended November 30, 2009, the Company paid the required $5,000 option payment for the year and paid $13,090 in state mining claim fees.

14

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 6 – Property, Plant and Equipment

Property, plant and equipment primarily include capital expenditure associated with the Company’s Vancouver office, and mining equipment and camp facilities at the Nolan Gold Project in Alaska. In accordance with FASB ASC 360-10, “Impairment or Disposal of Long-Lived Assets”, the Company recorded an impairment, as of November 30, 2009, of $12,254 against Nolan mining equipment. Depreciation expenses for the six months ended May 31, 2010 was $96,804 (2009: $116,902).

A summary of the Company’s property, plant and equipment for the six months ended as of May 31, 2010 is as follows:

				May 31, 2010
				Accumulated
				Depreciation and		Net Book
		Cost		Amortization		Value
Offices
Office leasehold improvements	$	597,557	$	235,434	$	362,123
Computer equipment and software		137,346		131,080		6,266
Furniture and fittings		394,358		390,355		4,003
Mining Project
Nolan gold project buildings		63,000		63,000		-
Leasehold improvements		48,123		26,468		21,655
Nolan mining equipment		1,017,987		542,909		475,078
Auto and trucks		19,193		7,357		11,836
Capital assets in construction		24,245		-		24,245
	$	2,301,809	$	1,396,603	$	905,206

A summary of the Company’s property, plant and equipment for the fiscal year ended as of November 30, 2009 is as follows:

				November 30, 2009
				Accumulated
				Depreciation and		Net Book
		Cost		Amortization		Value
Offices
Office leasehold improvements	$	597,557	$	192,832	$	404,725
Computer equipment and software		137,346		123,232		14,114
Furniture and fittings		394,358		390,075		4,283
Mining Project
Nolan gold project buildings		63,000		63,000		-
Leasehold improvements		48,123		21,655		26,468
Nolan mining equipment		1,017,987		503,568		514,419
Auto and trucks		19,193		5,438		13,755
Capital assets in construction		24,245		-		24,245
	$	2,301,809	$	1,299,800	$	1,002,009

15

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 7 – Promissory Note

In February 2010, the Company received $50,000 from an investor and issued a promissory note dated as of March 1, 2010. The unpaid principal balance of the note bears interest at a rate equal to twelve percent (12%) per annum if repaid by the Company within ninety (90) days from the date of the note, or eighteen percent (18%) per annum if repaid at any time thereafter. The note matures on September 1, 2010. The Company accrued interest of $1,500 during the six months ended May 31, 2010.

Note 8 – Convertible Debt Instruments

a) Convertible Notes Issued in Fiscal Year 2010

i)	On January 22, 2010, the Company entered into a Note Purchase Agreement (the “Agreement”) with St. George Investments, LLC (“St. George”). Pursuant to the terms of the Agreement, the Company issued and sold a convertible promissory note, dated January 22, 2010 (the “Note”) to St. George for the purchase price of $80,000 with a maturity date of March 15, 2010. An origination fee of $5,000 was paid by the Company to St. George from the proceeds of the sale of the Note and $4,000 of issuance costs was added to the principal balance of the note pursuant to the Agreement. The Company failed to repay the Note on March 15, 2010. On May 12, 2010, $20,000 of the Note was converted into 8,333,333 shares of the Company’s common stock. The remaining outstanding principal of $64,000 is in default. The Company and St. George are renegotiating the terms of the Agreement.
	The Note provides that interest on the unpaid principal balance of the Note shall not accrue unless a trigger event, as set forth therein, occurs. The Note provides St. George with the option, at any time prior to payment in full by the Company, to convert the outstanding amount into shares of the Company’s common stock. The number of common shares to be issued upon conversion shall be determined by dividing the outstanding amount by 70% of the average of the three lowest closing bid prices for the Company’s common stock for the twenty trading days immediately preceding the date of the conversion notice.
	The Company separately accounts for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on our non-convertible borrowing cost at the issuance date. The present value of a non-convertible note of $84,000 at the issuance date would be valued at $83,056 using the effective interest rate of 8.25%. Accordingly, the Company recorded $66,944 of the liability components of the convertible note as of the date of issuance and the excess proceeds of $8,056 received over the fair value of the debt at the date of issuance were attributed to the conversion feature of the convertible note and accordingly has been included in additional paid-in capital on the consolidated balance sheets. During the six months ended May 31, 2010, the Company amortized the resulting discount of $17,056 as an increase to financing cost expense which increased the carrying value to $64,000 at May 31, 2010.
ii)	On April 28, 2010, the Company entered into a Secured Convertible Note Agreement (the "Note Agreement") with Bodie Investment Group, Inc. Pursuant to the terms of the Note Agreement, the Company sold and issued a convertible note in the sum of $50,000 with a maturity date of April 28, 2011. An origination fee of $5,000 was paid by the Company to the Note holder from the proceeds of the sale of the Note. The Note bears no interest and is to be paid in full on the maturity date, unless previously paid or converted into the Company’s common stock. The Note holder has the right to convert any unpaid principal portion, at a conversion price per share equal to the lower of $0.003 or 70% of the average of the three lowest closing bid prices of the Company’s common stock for the 20 trading days preceding a conversion date.
	The Company issued 13,000,000 shares of the Company’s common stock to the Note holder as compensation costs. Such shares were valued at $61,100 using the closing price of the Company’s common stock on April 27, 2009 and were recorded as financing costs.

16

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 8 – Convertible Debt Instruments (Continued)

The Company separately accounts for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on our non-convertible borrowing cost at the issuance date. The present value of a non-convertible note of $50,000 at the issuance date would be valued at $46,189 using the effective interest rate of 8.25% . Accordingly, the Company recorded $41,189 of the liability components of the convertible note as of the date of issuance and the excess proceeds of $8,811 received over the fair value of the debt at the date of issuance were attributed to the conversion feature of the convertible note and accordingly has been included in additional paid-in capital on the consolidated balance sheets. During the six months ended May 31, 2010, the Company recorded amortization of the resulting discount of $797 as an increase to financing cost expense, and will amortize the remaining discount of $8,014 over the expected life of the debt. At May 31, 2010, the carrying value of the Note was $41,987.

b) Convertible Note Issued in Fiscal Year 2009

On October 30, 2009, the Company sold and issued a convertible note in the sum of $75,000 with a maturity date of October 30, 2010. The note bears no interest and is to be paid in full on the maturity date, unless previously paid or converted into the Company’s common stock. The Note holder has the right from March 1, 2010 to convert any unpaid principal portion, at a conversion price per share equal to 70% of the average of the three lowest closing bid prices of the Company’s common stock for the 20 trading days preceding a conversion date.

The Company issued 5,000,000 shares of the Company’s common stock to the Note holder as compensation and issuance costs reimbursement. Such shares were valued at $80,000 using the closing price of the Company’s common stock on October 29, 2009 and were recorded as financing costs. The Company also paid $7,500 cash to a third party as a finder’s fee on this note.

The present value of a non-convertible note at the issuance date would be valued at $69,284 using the effective interest rate of 8.25% . Accordingly, the Company recorded $69,284 of the liability components of the convertible note as of the date of issuance and the excess proceeds of $5,716 received over the fair value of the debt at the date of issuance were attributed to the conversion feature of the convertible note and accordingly has been included in additional paid-in capital on the consolidated balance sheets. The Company amortized the resulting discount of $476 as an increase to financing cost expenses during the fiscal year ended November 30, 2009 and $2,856 as an increase to interest expenses during the six months ended May 31, 2010, and will amortize the remaining discount of $2,384 over the expected life of the debt. At May 31, 2010, the carrying value of the Note was $72,616.

Note 9 – Asset Retirement Obligations

Asset retirement obligations relate to the closure and reclamation of the Grant Mill Tailings Pond and the Mill complex, 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 Company has no assets legally restricted for purposes of settling asset retirement obligations. A summary of assets retirement obligation for the six months ended May 31, 2010 and the fiscal year ended November 30, 2009 is as follows:

		Grant			Nolan
		Mine			Project			Total
Balance, November 30, 2008	$	364,651		$	172,607		$	537,258
Accretion expense		18,233			8,630			26,863
Liabilities settled		(14,000	)		(4,258	)		(18,258	)
Reclamation bond refunded		-			(5,456	)		(5,456	)
Balance, November 30, 2009		368,884			171,523			540,407
Accretion expense		9,222			4,288			13,510
Balance, May 31, 2010	$	378,106		$	175,811		$	553,917

17

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 9 – Asset Retirement Obligations (Continued)

Grant Mine

The Grant Mine is not an active mine and related assets were written off as impaired effective December 1, 2001. The retirement obligations associated with the Grant Mine involves the decommissioning of the Grant Mill Tailings Pond and the Mill complex that was built in the early 1980s and no longer used after 1989.

The Company has retained a geotechnical and environmental consulting firm to assist with a preliminary report for the closure of the tailings pond. The preliminary report is part of the closure plan, and further reclamation work involves another closure phase that needs permits and/or approval by the State of Alaska regulatory agencies.

The Company believes that the estimated fair value of the cost of reclamation at this time will approximate the accrued obligations plus 5% accretion expense per annum until reclaimed. During the six months ended May 31, 2010, the Company recorded $9,222 accretion expense. During the fiscal year ended November 30, 2009, the Company recorded $18,233 accretion expense, paid $1,511 to the State of Alaska regulatory agencies and spent another $12,489 on the Grant Mine closure.

Nolan Gold Project

The retirement obligations associated with the Nolan mineral properties are associated with the reclamation of disturbed land resulting from normal operations and are not the result of improper operations of an asset such as environmental remediation liabilities. The Nolan mineral properties are on Federal mining claims and thus are under the active supervision of the Bureau of Land Management.

The Company was bonded for 48.5 acres before the start of 2008 and 27.5 acres were reclaimed at Nolan Creek in 2008. During the fiscal year ended November 30, 2009, the Company received refunds of $5,456 from the reclamation bond deposited for these reclaimed 27.5 acres. As of May 31, 2010 and November 30, 2009, the Company is obligated to reclaim 21 acres at Nolan Creek. These 21 acres are areas essential for the Company’s operations and consist of the camp area, equipment storage area, processing area, explosives storage area, and the portal area, as well as the roads and core storage area.

The Company believes that the remaining accrued obligations plus 5% accretion expense per annum until the remaining 21 acres are reclaimed is sufficient to cover the cost of reclamation. During the six months ended May 31, 2010, the Company recorded $4,288 accretion expense. During the fiscal year ended November 30, 2009, the Company recorded $8,630 accretion expense and spent $4,258 on reclamation at Nolan properties.

Note 10 – Related Party Transactions

(a) Service Agreements

The Company has had related party transactions with Tri-Con Mining Ltd., Tri-Con Mining Inc. and Tri-Con Mining Alaska Inc. (collectively, the “Tri-Con Group”), all of which are controlled by a director and officer of the Company.

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 contracts dated January 1, 1997, Tri-Con Group has billed the Company cost plus 25% for exploration and cost plus 15% for development and mining. The term “cost” means out-of-pocket or actual cost incurred by Tri-Con Group plus 15% 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. In addition, per the terms of the agreements, the Company paid a base administration fee of CDN $10,000 per month to Tri-Con Mining Ltd. and US $10,000 per month to Tri-Con Mining Inc., respectively.

18

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 10 – Related Party Transactions (Continued)

(a) Service Agreements (Continued)

During the six months ended May 31, 2010, the Tri-Con Group’s services focused mainly on corporate planning; mining, drilling and engineering planning and preparation for production on the Company’s Nolan property; and administration services. During the period ended May 31, 2010, there were nominal exploration activities due to the Company’s cash flow constraints and consequently the Tri-Con Group waived the US $10,000 monthly fee for the six months ended May 31, 2010, and the CDN $10,000 monthly fee for the three months ended February 28, 2010 for a total of US $88,511. As of May 31, 2010, Silverado owed $1,001,884 (November 30, 2009: $1,064,046) to the Tri-Con Group for exploration and administration services performed on behalf of Silverado. The following is a summary of Tri-Con Group charges for the six months ended May 31, 2010 and 2009:

		Six Months Ended
		May 31, 2010		May 31, 2009
Exploration Services	$	-	$	669,179
Administration and management services		115,210		353,440
	$	115,210	$	1,022,619
Amount of total charges in excess of the Cost	$	40,156	$	291,180
Percentage of excess of the Cost charged over total amount billed		35.16%		28.5%

During the six months ended May 31, 2010, Tri-Con Group billed the Company CDN $ 9,375 (2009: CDN $35,325) plus 15% office overhead as the Cost plus markups for services performed on behalf of Silverado by a Tri-Con Group employee who is related to a director and chief executive officer of the Company.

(b) Consulting Agreement

Effective April 1, 2009, a consulting agreement was signed between the Company and a private company controlled by a former director of the Company who resigned on April 20, 2010. Pursuant to the agreement, the Company agreed to pay the private company CDN $7,500 plus GST per month for corporate planning, business development and investor relations services, as requested by the Company. During the six months ended May 31, 2010, the Company was billed CDN $45,000 plus GST by the private company controlled by the former director pursuant to the terms of the consulting agreement. During fiscal year 2009, the Company paid $64,644 (CDN $74,793, including GST) to the private company, and the Company also issued a total of 6,555,000 shares of its common stock to the former director for payment of an additional $57,029 owed to the private company under the consulting agreement. During the six months ended May 31, 2010, the Company issued a total of 7,735,248 shares of its common stock to the former director for payment of an additional $37,305 owed to the private company under the consulting agreement.

Note 11 – Common Stock

The authorized common stock of the Company consists of an unlimited number of common shares, without par value. The following is a summary of the Company’s issuances of common stock during the six months ended May 31, 2010:

19

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

	Number of			Common
	Common			Stock -			Shares to be
	Shares			Amount			Issued
Balance, November 30, 2009	1,577,667,073		$	100,883,269		$	100,000
Shares Issued:
For Private Placements
December 31, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant) cancelled	(1,000,000	)		(10,000	)		-
January 04, 2010 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	1,500,000			15,000			(15,000	)
January 04, 2010 @ $0.0035 per unit (1 unit = 1 share and 1 warrant)	25,785,715			90,250			(35,000	)
January 26, 2010 @ $0.01 per unit (1 unit = 1 share and 1/2 warrant)	5,000,000			50,000			(50,000	)
January 26, 2010 @ $0.0035 per unit (1 unit = 1 share and 1 warrant)	5,714,286			20,000			-
March 24, 2010 @ $0.0035 per share (1 unit = 1 share and 1 warrant)	32,376,337			113,317			-
April 8, 2010 @ $0.0035 per share (1 unit = 1 share and 1 warrant)	3,300,000			11,550			-
May 26, 2010 @ $0.0035 per share (1 unit = 1 share and 1 warrant)	930,500			3,257			-
	73,606,838			293,374			(100,000	)
For Warrants
March 05, 2010 @ $0.003 per share	10,000,000			30,000			-
March 17, 2010 @ $0.003 per share	20,500,000			61,500			-
April 8, 2010 @ $0.003 per share	14,017,550			42,053			-
April 14, 2010 @ $0.003 per share	1,000,000			3,000			-
April 30, 2010 @ $0.003 per share	1,000,000			3,000			-
May 13, 2010 @ $0.003 per share	500,000			1,500			-
May 25, 2010 @ $0.003 per share	1,000,000			3,000			-
	48,017,550			144,053			-
For Consulting Fees
December 15, 2009 @ $0.007 per share	3,000,000			21,000			-
January 11, 2010 @ $0.00777838 per share	1,238,750			9,635			-
January 11, 2010 @ $0.008 per share	2,196,875			17,575			-
January 15, 2010 @ $0.007 per share	8,000,000			56,000			-
January 26, 2010 @ $0.0073 per share	5,000,000			36,500			-
January 29, 2010 @ $0.0073 per share	4,123,987			30,105			-
February 12, 2010 @ $0.0058 per share	1,759,724			10,206			-
April 21, 2010 @ $0.0049 per share	6,021,024			30,105			-
April 23, 2010 @ $0.0049 per share	30,000,000			147,000			-
	61,340,360			358,127			-
For Investor Relation and Shareholder Communication Services
December 17, 2009 @ $0.00888 per share	1,718,325			15,259			-
February 12, 2010 @ $0.0058 per share	2,664,310			15,453			-
	4,382,635			30,712			-
For Legal, Financing and Other Service Fees
January 26, 2010 @ $0.0076 per share	7,000,000			53,200			-
March 18, 2010 @ $0.0058 per share	5,474,757			31,753			-
April 16, 2010 @ $0.0049 per share	7,436,709			36,440			-
April 28, 2010 @ $0.0049 per share	2,467,392			11,350			-
April 28, 2010 @ $0.0047 per share	13,000,000			61,100			-
May 27, 2010 @ $0.0042 per share	3,226,130			13,550			-
	38,604,988			207,393			-
For Conversion of Debenture
May 12, 2010 @ $0.0024 per share	8,333,333			20,000			-
	8,333,333			20,000			-
Other stockholders' equity
Share Subscriptions Received for Private Placements	-			-			66,250
Share Subscriptions Received for Warrants Exercise	-			-			14,700
	-			-			80,950
Balance, May 31, 2010	1,811,952,777		$	101,936,928		$	80,950

20

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 11 – Common Stock (Continued)

The following is a summary of the Company’s issuances of common stock for the fiscal year ended November 30, 2009:

	Number of		Common
	Common		Stock -		Shares to be
	Shares		Amount		Issued
Balance, November 30, 2008	977,437,101	$	94,718,072	$	-
Shares Issued:
For Private Placements
December 31, 2008 @ $0.00383 per share	18,260,870		70,000		-
February 25, 2009 @ $0.004 per share	19,250,000		77,000		-
March 27, 2009 @ $0.0025 per share	38,000,000		95,000		-
May 06, 2009 @ $0.01 per share	25,000,000		250,000		-
May 14, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	3,000,000		30,000		-
May 15, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	1,000,000		10,000		-
June 02, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	500,000		5,000		-
June 03, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	2,000,000		20,000		-
June 12, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	4,900,000		49,000		-
June 12, 2009 @ $0.01 per unit (1 unit = 1 share and 1/2 warrant)	10,000,000		100,000		-
June 16, 2009 @ $0.01 per share	9,500,000		95,000		-
June 22, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	1,500,000		15,000		-
July 03, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	1,000,000		10,000		-
July 03, 2009 @ $0.01 per share (1 unit = 1 share and 1/2 warrant)	9,000,000		90,000		-
July 22, 2009 @ $0.01 per share	13,500,000		135,000		-
July 27, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	4,000,000		40,000		-
August 12, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	2,000,000		20,000		-
August 17, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	2,500,000		25,000		-
August 27, 2009 @ $0.01 per unit (1 unit = 1 share and 1/2 warrant)	23,500,000		235,000		-
August 27, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	1,000,000		10,000		-
August 28, 2009 @ $0.01 per share	5,000,000		50,000		-
August 28, 2009 @ $0.01 per unit (1 unit = 1 share and 1/2 warrant)	2,000,000		20,000		-
September 18, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	2,000,000		20,000		-
September 29, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	20,000,000		200,000		-
September 29, 2009 @ $0.01 per unit (1 unit = 1 share and 1/2 warrant)	12,500,000		125,000		-
October 06, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	4,500,000		45,000		-
November 03, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	5,000,000		50,000		-
November 09, 2009 @ $0.005 per share	40,000,000		200,000		-
November 18, 2009 @ $0.01 per unit (1 unit = 1 share and 1 warrant)	1,500,000		15,000		-
	281,910,870		2,106,000		-
For Consulting Fees and Other Expenses
January 28, 2009 @ $0.0125 per share	1,000,000		12,500		-
January 29, 2009 @ $0.0125 per share	25,000,000		312,500		-
January 29, 2009 @ $0.03 per share	25,000,000		750,000		-
February 12, 2009 @ $0.0085 per share	6,000,000		51,000		-
February 12, 2009 @ $0.01 per share	2,000,000		20,000		-
February 13, 2009 @ $0.0087 per share	15,000,000		130,500		-
February 13, 2009 @ $0.00333 per share	3,109,800		10,356		-
March 27, 2009 @ $0.0125 per share	20,000,000		250,000		-
March 27, 2009 @ $0.0125 per share	9,000,000		112,500		-
April 13, 2009 @ $0.013 per share	15,000,000		195,000		-
June 03, 2009 @ $0.012 per share	30,000,000		360,000		-
August 18, 2009 @ $0.018 per share	5,000,000		90,000		-
August 21, 2009 @ $0.014 per share	20,000,000		280,000		-
October 29, 2009 @ $0.0154 per share	3,500,000		53,900		-

21

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 11 – Common Stock (Continued)

	Number of		Common
	Common		Stock -			Shares to be
	Shares		Amount			Issued
November 03, 2009 @ $0.018 per share	5,000,000		90,000			-
November 18, 2009 @ $0.0148 per share	5,000,000		74,000			-
November 23, 2009 @ $0.0118 per share	4,000,000		47,200			-
	193,609,800		2,839,456			-
For Investor Relation and Shareholder Communication Services
February 13, 2009 @ $0.0051 per share	6,555,000		33,431			-
March 27, 2009 @ $0.00644 per share	2,112,069		13,602			-
May 15, 2009 @ $0.0122 per share	357,965		4,367			-
June 03, 2009 @ $0.01063 per share	505,927		5,378			-
July 03, 2009 @ $0.01504 per share	376,430		5,662			-
July 31, 2009 @ $0.01478 per share	353,379		5,223			-
August 27, 2009 @ $0.016965 per share	342,343		5,808			-
October 06, 2009 @ $0.0175 per share	333,618		5,838			-
October 20, 2009 @ $0.01733 per share	345,493		5,987			-
November 24, 2009 @ $0.01392 per share	427,078		5,945			-
	11,709,302		91,241			-
For Commitment, Legal and Financing Fees
May 06, 2009 @ $0.0096 per share	100,000,000		960,000			-
October 20, 2009 @ $0.0185 per share	8,000,000		148,000			-
November 04, 2009 @ $0.016 per share	5,000,000		80,000			-
	113,000,000		1,188,000			-
Share Subscriptions Received	-		-			100,000
Share Issue Costs	-		(59,500	)		-
Balance, November 30, 2009	1,577,667,073	$	100,883,269		$	100,000

a) Private Placements

For the six months ended May 31, 2010

During the six months ended May 31, 2010, the Company completed a private placement resulting in the issuance of 1,500,000 units at $0.01 per unit. Each unit consisted of one share of common stock and one common stock purchase warrant exercisable for a number of additional shares of common stock equal to the number of units purchased, at a per share exercise price of $0.02 within the one year period commencing from the date of the subscription agreement. The Company received gross proceeds of $15,000 from such private placement. In December 2009, a subscription agreement related to 1,000,000 units at $0.01 per unit was cancelled and issued units were returned and cancelled accordingly.

During the six months ended May 31, 2010, the Company completed a private placement resulting in the issuance of 5,000,000 units at $0.01 per unit. Each unit consisted of one share of common stock and one half-warrant, with a full warrant (consisting of two half-warrants) being exercisable for one share of common stock at a per share exercise price of $0.02 within the one year period commencing from the date of the subscription agreement. The Company received proceeds of $50,000 from such private placement.

22

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 11 – Common Stock (Continued)

a) Private Placements (Continued)

During the six months ended May 31, 2010, the Company also completed private placements resulting in the issuance of an aggregate of 68,106,838 units at $0.0035 per unit. Each unit consisted of one share of common stock and one common stock purchase warrant exercisable for a number of additional shares of common stock equal to the number of units purchased, at a per share exercise price of $0.01 within the one year period commencing from the date of the subscription agreement. The Company received gross proceeds of $238,374 from such private placements.

For the fiscal year ended November 30, 2009

During the fiscal year ended November 30, 2009, the Company completed private placements resulting in the issuance of an aggregate of 18,260,870 common shares at $0.0038 per share, 19,250,000 common shares at $0.004 per share, 38,000,000 common shares at $0.0025 per share, 40,000,000 common shares at $0.005 per share and 18,500,000 common shares at $0.01 per share. The Company received aggregate gross proceeds of $627,000 from such private placements and paid related commission fees of $20,000 which was recorded as a reduction of common stock.

In addition, during the fiscal year ended November 30, 2009, the Company completed private placements resulting in the issuance of 34,500,000 common shares at a price of $0.01 per share. These private placements generated gross proceeds of $345,000 from the sale of shares related to the Equity Line of Credit Agreement (see Note 11(c), below). In accordance with the Equity Line of Credit Agreement, the Company paid commission fees of $34,500 which was recorded as a reduction of common stock.

During the fiscal year ended November 30, 2009, the Company completed private placements resulting in the issuance of an aggregate of 56,400,000 units at $0.01 per unit. Each unit consisted of one share of common stock and one common stock purchase warrant exercisable for a number of additional shares of common stock equal to the number of units purchased, at a per share exercise price of $0.02 within the one year period commencing from the date of the subscription agreement. The Company received gross proceeds of $564,000 from such private placements and paid commission fees of $5,000 which was recorded as a reduction of common stock. Subsequent to November 30, 2009, a subscription agreement related to 1,000,000 units was cancelled and issued units were returned and cancelled accordingly.

During the fiscal year ended November 30, 2009, the Company also completed private placements resulting in the issuance of an aggregate of 57,000,000 units at $0.01 per unit. Each unit consisted of one share of common stock and one half-warrant, with a full warrant (consisting of two half-warrants) being exercisable for one share of common stock at a per share exercise price of $0.02 within the one year period commencing from the date of the subscription agreement. The Company received proceeds of $570,000 from such private placements.

23

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 11 – Common Stock (Continued)

a) Private Placements (Continued)

As of November 30, 2009, the Company received $65,000 for the sale of an aggregate of 6,500,000 common shares and 4,000,000 common stock purchase warrants. Each common stock purchase warrant is exercisable for an additional share of common stock at a per share exercise price of $0.02 within the one year period commencing from the date of the subscription agreement. The Company also received $35,000 for the sale of an aggregate of 10,000,000 units at a price of $0.0035 per unit. Each unit consisted of one share of common stock and one common stock purchase warrant exercisable at a per share exercise price of $0.01 for the purchase of one share of common stock within the one year period commencing from the subscription agreement. These private placements were not completed as of November 30, 2009, as shares had not been issued as of such date, but the purchase price received has been reflected as subscriptions received in stockholders’ equity in the accompanying balance sheet. The Company completed such private placements during the six months ended May 31, 2010.

b) Common Stock Issued under Equity Compensation Plans

A summary of common stock issued under equity compensation plans (See Note 12(a) – Equity Compensation Plans, below) for the six months ended May 31, 2010 and the fiscal year ended November 30, 2009 is as follows:

	May 31, 2010			November 30, 2009
	Number of		Value of	Number of		Value of
	Shares		Shares	Shares		Shares
Shares issued for consulting fees:
Recorded as consulting fees	60,034,964	$	348,794	152,109,362	$	2,230,816
Recorded as prepaid expenses	1,305,396		9,333	41,500,438		608,640
Subtotal:	61,340,360		358,127	193,609,800		2,839,456
Shares issued for legal and other fees:
Recorded as legal and other fees	25,604,988		146,294	2,150,000		39,775
Recorded as prepaid expenses	-		-	5,850,000		108,225
Subtotal:	25,604,988		146,294	8,000,000		148,000
Shares issued for investor relations and
shareholders communication services
Recorded as investor relations fees	2,718,027		19,047	11,709,302		91,241
Recorded as prepaid expenses	1,664,608		11,665	-		-
Subtotal:	4,382,635		30,712	11,709,302		91,241
Total shares issued under equity compensation plans	91,327,983	$	535,133	213,319,102	$	3,078,697

For the six months ended May 31, 2010

Pursuant to several agreements for corporate planning, business development and strategies, legal services and media solutions services, the Company issued an aggregate of 91,327,983 shares of the Company’s unrestricted free trading common stock during the six months ended May 31, 2010, valued at the fair market price at the dates of agreements or at the dates of shares issued, for total consideration of $535,133. These shares were issued under the Company’s Equity Compensation Plans (See Note 12(a) – Equity Compensation Plans, below).

24

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 11 – Common Stock (Continued)

b) Common Stock Issued under Equity Compensation Plans (Continued)

For the fiscal year ended November 30, 2009

During the fiscal year ended November 30, 2009, the Company entered into several agreements for corporate planning, business development and strategies, legal services and media solutions services. Pursuant to these agreements, the Company issued an aggregate of 188,609,800 shares of the Company’s unrestricted free trading common stock and 5,000,000 shares of the Company’s restricted common stock, valued at the fair market price at the dates of agreements, for total consideration of $2,839,456. Of this amount $2,230,816 was recorded as consulting fees and $608,640 was recorded as prepaid expenses. These shares were issued under the Company’s Equity Compensation Plans. $550,307 of such prepaid consulting fees was expensed during the six months ended May 31, 2010.

In addition, during the fiscal year ended November 30, 2009, the Company entered into consulting agreements for investor relations and shareholder communication services. Pursuant to these agreements, the Company issued an aggregate of 11,709,302 shares of the Company’s unrestricted free trading common stock for total consideration of $91,241 which was recorded as reporting and investor relations expenses. The Company also issued 8,000,000 shares of the Company’s unrestricted free trading common stock to an attorney as retainer. Such shares were valued at the fair market price at the date of the engagement agreement, for total consideration of $148,000, of which $108,225 was recorded as prepaid expenses and $39,775 was recorded as legal fees. Such prepaid legal fees were expensed during the six months ended May 31, 2010.

c) Common Stock Issued as Commitment Fee under Equity Line of Credit

On May 6, 2009, the Company entered into an Equity Line of Credit Agreement with an accredited investor pursuant to which the Company could have sold to the investor, if certain conditions were met, up to $100,000,000 in shares of its common stock over the term of the agreement, unless earlier terminated.

Upon execution, the Company issued to the investor 100,000,000 shares of the Company’s common stock as payment of a commitment fee, with such shares valued at the fair market price at the date of issuance ($0.0096 per share on May 6, 2009). Such shares were deemed fully earned as of the date of the agreement and therefore the fair market value of such shares ($960,000) was included in consolidated statements of operations and other comprehensive loss for the fiscal year ended November 30, 2009. As of November 30, 2009, the Company raised $345,000 from the investor pursuant to the sale of an aggregate of 34,500,000 common shares at a price of $0.01 per share and paid related commission fees of $34,500 (See Note 11(a) – Private Placements, above).

On December 16, 2009, the Company terminated the Equity Line of Credit Agreement in connection with its efforts to secure alternate sources for capital.

d) Common Stock Issued as Financing Expenses

In April 2010, the Company issued 13,000,000 shares of the Company’s common stock to a convertible note holder as compensation costs. Such shares were valued at $61,100 using the market closing price one day before the convertible note issuance date and recorded as financing expenses (See Note 8(a) – Convertible Note Issued in Fiscal Year 2010, above).

In November 2009, the Company issued 5,000,000 shares of the Company’s common stock to a convertible note holder as compensation and issuance costs reimbursement. Such shares were valued at $80,000 using the market closing price one day before the convertible note issuance date and recorded as financing expenses (See Note 8(b) –Convertible Note Issued in Fiscal Year 2009, above).

25

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 12 –Equity Compensation Plans, Stock Options and Common Stock Purchase Warrants

a) Equity Compensation Plans and Stock Options

Equity Compensation Plans

On January 29, 2009, the Company adopted the 2009 Equity Compensation Plan (the “2009 Plan”) to encourage certain directors, officers, employees, and consultants of the Company to acquire and hold stock in the Company as an added incentive to remain with the Company, to increase their efforts in promoting the interests of the Company and to enable the Company to attract and retain capable individuals. The number of shares issued under the Plan may not exceed 130,000,000 in aggregate. On January 29, 2009, the Company filed a registration statement on Form S-8 to register all 130,000,000 of such shares. These shares were granted to several consultants during the fiscal year ended November 30, 2009.

On June 1, 2009, the Company adopted the 2009-II Equity Compensation Plan (the “2009-II Plan”) to encourage certain directors, officers, employees, and consultants of the Company to acquire and hold stock in the Company as an added incentive to remain with the Company, to increase their efforts in promoting the interests of the Company and to enable the Company to attract and retain capable individuals. The number of shares issued under the 2009-II Plan may not exceed 80,000,000 in aggregate. On June 1, 2009, the Company filed a registration statement on Form S-8 to register all 80,000,000 of such shares. These shares were granted to several consultants during the fiscal year ended November 30, 2009.

On December 11, 2009, the Company adopted the 2009-III Equity Compensation Plan (the “2009-III Plan”) to encourage certain directors, officers, employees, and consultants of the Company to acquire and hold stock in the Company as an added incentive to remain with the Company and to increase their efforts in promoting the interests of the Company and to enable the Company to attract and retain capable individuals. The number of shares issued under the 2009-III Plan may not exceed 120,000,000 in aggregate. On December 16, 2009, the Company filed a registration statement on Form S-8 to register all 120,000,000 of such shares. During the six months ended May 31, 2010, the Company issued an aggregate of 91,327,983 shares of the Company’s common stock under the 2009-III Company’s Equity Compensation Plans in payment of consulting and other services. Such shares were valued at the fair market price on the effective dates of the consulting agreements or based on share price terms in the agreements.

During the fiscal year ended November 30, 2009, the Company issued an aggregate of 213,319,102 shares of the Company’s common stock under the Company’s Equity Compensation Plans in payment of consulting and other services. Such shares were valued at the fair market price on the effective dates of the consulting agreements or based on share price terms in the agreements.

A summary of common stock issued under equity compensation plans during the six months ended May 31, 2010 and the fiscal year ended November 30, 2009 is disclosed in Note 11(b) – Common Stock Issued under Equity Compensation Plans, above.

26

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 12 – Equity Compensation Plans, Stock Options and Common Stock Purchase Warrants (Continued)

a) Equity Compensation Plans and Stock Options (Continued)

Stock Options

There were no stock options granted and valued during the six months ended May 31, 2010 and the fiscal year ended November 30, 2009. A summary of the change in outstanding and exercisable stock options for the six months ended May 31, 2010 and the fiscal year ended November 30, 2009 is as follows:

					Weighted
	Outstanding and			Weighted	Average
	Exercisable			Average	Remaining
	Options			Exercise Price	Contractual Life
Balance, November 30, 2008	70,400,000		$	0.056	3.47 years
Options cancelled or expired	(22,200,000	)		0.055
Balance, November 30, 2009	48,200,000			0.056	2.72 years
Options cancelled or expired	-			-
Balance, May 31, 2010	48,200,000		$	0.056	2.22 years

The balance of outstanding and exercisable common stock options as at May 31, 2010 is as follows:

Number of Options			Remaining
Outstanding and		Exercise	Contractual Life
Exercisable		Price	(Years)
2,600,000	$	0.05	0.61
1,500,000	$	0.05	1.08
7,500,000	$	0.05	1.11
22,300,000	$	0.05	2.60
14,300,000	$	0.07	2.62
48,200,000

Fair Value Determination

There were no stock options granted during the six months ended May 31, 2010 and the fiscal year ended November 30, 2009. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options when the options are granted. 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. Management believes that the annualized weekly average of volatility is the best measure of expected 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, 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.

27

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 12 – Equity Compensation Plans, Stock Options and Common Stock Purchase Warrants (Continued)

b) Common Stock Purchase Warrants

During the six months ended May 31, 2010, 1,000,000 of the Company’s outstanding common stock purchase warrants, exercisable at a per share exercise price of $0.02, was cancelled and 2,000,000 of the Company’s outstanding common stock purchase warrants, exercisable at a per share exercise price of $0.02, expired . The Company issued 72,106,838 common stock purchase warrants upon the completion of private placements during the six months ended May 31, 2010. 4,500,000 of such issued common stock purchase warrants are exercisable at a per share exercise price of $0.02 and 67,606,838 of such issued common stock purchase warrants are exercisable at a per share exercise price of $0.01, within the one year period commencing from the date of the subscription agreement. Each common stock purchase warrant issued during the period is exercisable for one share of common stock. There was no value assigned to these warrants when they were issued.

During the fiscal year ended November 30, 2009, 40,349,230 of the Company’s outstanding common stock purchase warrants expired and 84,900,000 common stock purchase warrants were granted by the Company upon the completion of private placements as of November 30, 2009. Each common stock purchase warrant granted during the period is exercisable for one share of common stock at a per share exercise price of $0.02 within the one year period commencing from the date of the subscription agreement. There was no value assigned to these warrants when they were granted.

During the six month period ended May 31, 2010, the Company reduced the exercise price of 31,400,000 of its common stock purchase warrants from $0.02 to $0.003 per common share and 19,517,550 of its common stock purchase warrants from $0.01 to $0.003 per common share.

The common stock purchase warrants referenced above were issued upon the completion of private placements. There was no value assigned to these warrants when they were granted. The exercise price reduction incentivized the holders to exercise the warrants, which assisted the Company in meeting its working capital requirements. The Company received less proceeds from these exercised warrants due to the price reductions, but the Company believes these warrants would have been left to expire had the Company not effected the exercise price reductions. A summary of the change in common stock purchase warrants during the six months ended May 31, 2010 and the fiscal year ended November 30, 2009 is as follows:

					Weighted
				Weighted	Average
	Outstanding			Average	Remaining
	Warrants			Excercise Price	Contractual Life
Balance, November 30, 2008	40,349,230		$	0.070	0.17 years
Warrants issued	84,900,000			0.020
Warrants expired	(40,349,230	)		0.070
Balance, November 30, 2009	84,900,000			0.020	0.72 years
Warrants issued	72,106,838			0.011
Warrants exercised	(48,017,550	)		0.003
Warrants cancelled or expired	(3,000,000	)		0.020
Warrants price reduced	48,017,550			0.003
Warrants price reduced	(48,017,550	)		0.016
Balance, May 31, 2010	105,989,288		$	0.012	0.23 years

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SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 12 – Equity Compensation Plans, Stock Options and Common Stock Purchase Warrants (Continued)

b) Common Stock Purchase Warrants (Continued)

The balance of outstanding and exercisable common stock purchase warrants as of May 31, 2010 is as follows:

			Remaining
Number of Warrants			Contractual Life
Outstanding		Exercise Price	(Years)
54,000,000	$	0.020	0.01 - 0.63
48,089,288	$	0.010	0.60 - 0.99
3,900,000	$	0.003	0.01
105,989,288

Note 13 – Segment Disclosures

The Company operates in one reportable segment, located in United States, being the acquisition and exploration of mineral properties. The Company’s development of low-rank coal-water fuel, located in United States, is in its initial stages and is not a reportable segment. Segmented information has been compiled based on the geographic regions that the Company and its subsidiaries registered and performed exploration and administration activities. Assets by geographical segment as of the fiscal quarter ended May 31, 2010 and the fiscal year ended November 30, 2009 is as follows:

As of May 31, 2010		Canada		United States		Total
Current assets	$	101,570	$	22,840	$	124,410
Mineral rights		-		1,478,601		1,478,601
Property, plant and equipment, net		372,392		532,814		905,206
Total assets, as of May 31, 2010	$	473,962	$	2,034,255	$	2,508,217
As of November 30, 2009		Canada		United States		Total
Current assets	$	720,088	$	24,701	$	744,789
Mineral rights		-		1,398,601		1,398,601
Property, plant and equipment, net		423,121		578,888		1,002,009
Total assets, as of November 30, 2009	$	1,143,209	$	2,002,190	$	3,145,399

Loss by geographical segment for the six months ended May 31, 2010 and 2009 is as follows:

For the Six Months Ended May 31, 2010		Canada		United States		Total
Total comprehensive loss	$	1,781,292	$	392,956	$	2,174,248
For the Six Months Ended May 31, 2009		Canada		United States		Total
Total comprehensive loss	$	2,921,948	$	1,382,292	$	4,304,240
For the Three Months Ended May 31, 2010		Canada		United States		Total
Total comprehensive loss	$	819,133	$	217,938	$	1,037,071
For the Three Months Ended May 31, 2009		Canada		United States		Total
Total comprehensive loss	$	1,761,065	$	982,621	$	2,743,686

29

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 14 – Supplemental Cash Flow Information

Investing and financing activities that do not have a direct impact on current cash flows are excluded from the cash flow statements. A summary of non-cash transactions and other cash information for the six months ended May 31, 2010 and 2009 is as follow:

		Six Months Ended May 31,
		2010		2009
Changes in non-cash financing and investing activities:
Common stock issued for consulting fees and other expenses	$	514,134	$	1,330,132
Common stock issued for prepaid consulting and other service fees	$	20,998	$	1,525,624
Common shares issued for subscriptions received	$	100,000	$	-
Conversion feature on convertible debenture	$	11,867	$	-
Mineral claims royalty payable changes at period-end for mineral rights	$	80,000	$	80,000
Other cash flow information:
Interest paid	$	85,289	$	4,173

Note 15 – Commitments and Contingencies

a) Severance Agreement with Director

The Company has entered into a severance agreement with a director and chief executive officer of the Company. The agreement provides for severance arrangements where a change of control of the Company occurs, as defined, and the director is terminated. The compensation payable to the director aggregates $4,000,000 plus the amount of annual bonuses and other benefits that he would have received in the eighteen months following termination.

b) Indemnity Agreements with Directors

The Company entered into Indemnity Agreements (“Agreements”) dated December 23, 2009, with each of its directors and executives, Garry L. Anselmo, Stuart McCulloch, Donald G. Balletto, Robert M. Dynes, and John Mackay (collectively, the “Executives”). These agreements supersede all prior agreements whether oral or written. Pursuant to the terms of the Agreements, the Company granted a general indemnification to the Executives against all claims and costs that arise out of the scope or performance of duties as a director or executive officer of the Company. The Agreements are conclusively deemed to commence on, and be effective as of, the day upon which the Executive first became or becomes a director or officer of the Company and survive and remain in full force and effect after the Executive ceases to be a director or officer of the Company and after the termination of the Executive’s employment with the Company.

30

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

as of May 31, 2010 (Unaudited)

(Stated in United States Dollars)

Note 15 – Commitments and Contingencies (Continued)

c) Office Lease

The Company entered into a seven year office lease agreement expiring in July 2014 for its Vancouver office when obliged to vacate its previous lease location at the expiry of the lease. The Company’s future minimum lease payments under this lease are as follows:

Fiscal year ending November 30, 2010	$	61,841
Fiscal year ending November 30, 2011		123,682
Fiscal year ending November 30, 2012		125,268
Fiscal year ending November 30, 2013		128,439
Fiscal year ending November 30, 2014		85,626
	$	524,856

Note 16 – Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were made available for issuance. Below are the reportable events.

(a)	On June 1, 2010, the Company issued 2,000,000 shares of common stock upon the exercise of share purchase warrants at reduced exercise prices of $0.003 per common share, and on June 4, 2010, the Company issued 5,500,000 shares of common stock upon the exercise of share purchase warrants at reduced exercise prices of $0.00233 per common share. The Company received proceeds of $18,815 from common stock purchase warrant exercises.
(b)	On June 3, 2010, the Company adopted the 2010-I Equity Compensation Plan (the “2010-I Plan”) to encourage certain directors, officers, employees, and consultants of the Company to acquire and hold stock in the Company as an added incentive to remain with the Company and to increase their efforts in promoting the interests of the Company and to enable the Company to attract and retain capable individuals. The number of shares issued under the 2010-I Plan may not exceed 180,000,000 in aggregate. On June 9, 2010, the Company filed a registration statement on Form S-8 to register all 180,000,000 of such shares.
(c)	On June 14, 2010, the Company issued 7,788,162 shares of the Company’s restricted common stock upon conversion of $17,500 under a convertible note at a conversion price of $0.002247 per common share.
(d)	On June 15, 2010, the Company completed private placements resulting in the issuance of an aggregate of 30,946,667 units at $0.003 per unit. Each unit consisted of one share of common stock and one common stock purchase warrant exercisable for a number of additional shares of common stock equal to the number of units purchased, at a per share exercise price of $0.01 within the one year period commencing from the date of the subscription agreement. The Company received proceeds of $92,840 from such private placements.
(e)	On June 15, 2010, the Company sold and issued a convertible note in the sum of $75,000 with a maturity date of June 15, 2011. The note bears no interest and is to be paid in full on the maturity date, unless previously paid or converted into the Company’s common stock. The Note holder has the right to convert any unpaid principal portion, at a conversion price per share equal to the lower of $0.003 or 70% of the average of the three lowest closing bid prices of the Company’s common stock for the 20 trading days preceding a conversion date. The Company issued 20,000,000 shares of the Company’s common stock to the Note holder as compensation costs.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the operating results and financial position of Silverado Gold Mines Ltd. (“Silverado” or the “Company”) for the six months ended May 31, 2010. It should be read in conjunction with the Company’s audited consolidated financial statements and footnotes for the fiscal year ended November 30, 2009 and the interim unaudited consolidated financial statements for the six-month period ended May 31, 2010.

All financial information in this Management’s Discussion and Analysis (“MD&A”) is expressed and prepared in conformity with US generally accepted accounting principles. All references are in US dollar, the Company’s reporting currency, unless otherwise noted. Some numbers in this MD&A have been rounded to the nearest thousand for discussion purposes.

Certain forward-looking statements are discussed in this MD&A with respect to the Company’s activities and future financial results, which are made based upon management’s current expectations and beliefs. There can be no assurance that future developments affecting the Company will be those anticipated by management.

FORWARD-LOOKING STATEMENTS

The information in this Quarterly Report on Form 10-Q 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 Silverado’s 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 gold recovery activities and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and gold recovery 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", "seek", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or ”target", 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 Silverado files with the Securities Exchange Commission (the “SEC”). These factors may cause actual results to differ materially from any forward-looking statement. Management disclaims 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.

OVERVIEW

The Company 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 is involved with the development of a new environmentally friendly low-rank coal-water fuel (“LRCWF”) technology through its other wholly-owned subsidiary, Silverado Green Fuel, Inc.

The Company has committed over three decades of work to the exploration, development and test mining of gold properties throughout North America. In the mid-1980s, the Company decided to focus 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, the Company’s primary focus is the exploration and development of our Nolan Gold and Antimony Project located 175 miles north of Fairbanks, Alaska. We are also continuing with exploration activities on our Hammond Gold Property, located approximately three miles northeast of our Nolan Property, and on our Eagle Creek Gold and Antimony Property and Ester Dome Gold Project, which are both located in the Fairbanks Mining District.

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The Company has also been working on the development of LRCWF, a non-toxic liquid fuel product derived from sub-bituminous and lignite coal. In its finished form, the fuel would be a non-toxic, non-hazardous environmentally friendly strategic (liquid) fuel. The Company is currently having a $150,000 study conducted on the chemical and physical characteristics of Mississippi Red Hills Lignite Coal at the Mineral Industry Research Laboratory at the University of Alaska (Fairbanks) and expects results by late 2010. Results of the tests as well as capital availability and an increase in oil prices would all have to be present and sufficient for Silverado Green Fuel Inc. to reconsider construction of its LRCWF project.

SUMMARY OF MINERAL EXPLORATION PROGRAM AND PLAN OF OPERATION

The Company holds interests in the following four groups of mineral properties in Alaska, U.S.A.:

1) Nolan property;

2) Hammond Property (Slisco Bench);

3) Eagle Creek Property; and

4) Ester Dome Property.

All of these properties are in the exploration stage and have no proven reserves as of May 31, 2010, with the exception of the Nolan property, which has a probable reserve but requires a more extensive feasibility study to ascertain if such probable reserve can be classified as a proven reserve.

The following disclosures incorporate the results of technical reports prepared during 2008 and 2009 by the QP, in accordance with the requirements of Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Investors may view the NI 43-101 reports at the Company’s website at www.silverado.com. The NI 43-101 reports provide disclosure regarding Silverado’s Alaska properties in accordance with NI 43-101. U.S. Investors are cautioned that the United States Securities and Exchange Commission does not recognize the terms “indicated resources” and “inferred resources”.

Based on the completion of a preliminary feasibility study by an independent and AIPG Certified Professional Geologist (the “QP”), our Nolan Gold and Antimony Lode Project has disclosed an economically viable mineral reserve. The preliminary feasibility study, entitled “Update of Mineral Resource and Reserve Estimates and Preliminary Feasibility Study, Workman’s Bench Antimony-Gold Lode Deposit, Nolan Creek, Wiseman B-1 Quadrangle, Koyukuk Mining District, Northern Alaska”, dated January 1, 2009 and amended June 1, 2009 (the “Technical Report”), concluded that the resource estimates disclosed by the Company on November 17, 2008 could be reclassified as a probable reserve. The Technical Report can also be found at the Company’s website at www.silverado.com.

Likewise, the 2009 lode exploration program (core drilling) at Nolan did not change the probable mineral reserve estimates, but there was a significant increase in the estimated indicated lode mineral resources at both Workman’s and Pringle Bench. The new resource estimates were disclosed to the public on January 7, 2010. Refer to the Silverado 2009 10-K report which can be found on SEDAR and EDGAR for the updated Nolan Gold and Antimony Project resource estimates. The mineral resource estimates for the Nolan Gold and Antimony project are also listed on the Company website at www.silverado.com, under NEWS – Released on January 7, 2010.

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Overall mineral exploration performance during the six month period ended May 31, 2010 and management’s plan of operations for each property are discussed below.

1. NOLAN GOLD AND ANTIMONY PROPERTY

The Company owns a 100 percent interest in numerous mining claims on the Nolan Creek Project. As of May 31, 2010, the Company’s Nolan Gold Project consist of 204 unpatented, federal placer mining claims covering approximately 4,080 acres in three non-contiguous groups, and 407 unpatented federal lode mining claims covering approximately 8,140 acres in one large contiguous group. Many of the 407 lode mining claims are superimposed over the placer mining claims.

The majority of the properties comprising our Nolan Gold Project are adjacent to or within the Nolan Creek Valley, located approximately 8 miles northwest of the small town of Wiseman, and 175 air miles north of Fairbanks, Alaska in the southern foothills of the Brooks Range. Centrally located in the historic Koyukuk Mining District, Nolan Creek is a southerly flowing tributary to Wiseman Creek which flows southeasterly into the Middle Fork of the Koyukuk River. An all weather road connects the Nolan Creek Camp with the Dalton Highway and is suitable year-round for semi-tractors loaded with fuel and equipment. Air transportation is available by several commercial carriers from Fairbanks to the 4,500 ft long, state maintained Coldfoot Airport. The community of Coldfoot Alaska is about 15 miles south-southeast of Nolan, and has Alaska’s northernmost gas station, grocery, and public lodging.

All of the Nolan Gold Project properties are on federal land and located within the Wiseman B-1 Quadrangle. All of the mineral claims, with the exception noted below, are in the SE ¼, Township 31 North, Range 12 West, the NE ¼, Township 30 North, Range 12 West, and SW ¼, Township 31 North, Range 11 West, Fairbanks Meridian.

In addition to the Nolan Creek properties, Silverado also has two smaller placer claim groups on Clara Creek and Marion Creek, located 1.5 and 3 miles north respectively of the town of Coldfoot, Alaska, situated near the Dalton Highway.

Under Silverado’s ownership since 1982, a total of 23,153 ounces of placer gold was recovered from channel and bench deposits in the Nolan Valley through 2006. The largest nugget recovered to date weighed 41.35 ounces and was valued at US$16,000 by weight. It sold for US$50,000. Most nuggets recovered at Nolan Valley are suitable for jewelry.

Placer deposits at Nolan Creek can be found in frozen gravel beds (ancient channel deposits) some of which can be mined year round. Test mining can be carried out by underground methods during the coldest winter months, and by surface methods most of the year. In the summer months when the gravel has thawed, snow melt water is available for gold recovery by hydraulic sluicing. The sluicing process uses only gravity and water within a closed circuit, ensuring that there is zero discharge to the environment. Lands disturbed by mining are fully reclaimed. The Company operates under 11 combined federal and state permits.

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The Company currently is in a transitional phase between exploration and development on this property. The preliminary hardrock feasibility study, effective January 1, 2009 and amended on June 1, 2009 to reflect additional data, supported a probable mineral reserve of antimony and gold underlying the southwestern portion of the Solomon Shear Zone, an area referred to by the Company as Workman’s Bench. The study by the Company’s QP concluded that the Nolan Gold and Antimony Project in the Workman’s Bench area are economically viable. The results of the January 2009 preliminary feasibility study and the reserve estimates are disclosed in the Company’s Annual Report on Form 10-KSB filed on March 16, 2009 and the Company’s website: www.silverado.com.

The measured reserve estimates on Workman’s Bench, on which the pre-feasibility study was based, did not change in the amended June 1, 2009 Technical Report. Also, the current probable reserves at Workman’s Bench did not change following the 2009 exploration program at the Nolan Creek property. The current mineral resource estimates from the Workman’s Bench and Pringle Bench lode prospects were determined by the Company QP following the 2009 drill program, and the estimates were disclosed to the public on January 7, 2009. Resources were increased substantially after the 2009 drilling and January 7, 2010 report analysis. Investors need to be cautioned that the new resource estimates are not reserves and have not demonstrated economic viability. The current resource estimates for the Nolan Gold and Antimony Project are listed below:

General Note Regarding Estimates

The following information should be considered in connection with our estimates below, which we are disclosing in accordance with applicable SEC standards and regulations:

• Assumed Prices of US $900/oz for gold and US $2.75/lb for antimony.
• Process Recovery Rates of 85% for antimony and 90% for gold (as provided by Hazen Research from work done on an underground bulk sample from the D tunnel of the Workman’s Bench A vein and using gravity and water recovery systems only).
• Estimated Operating Costs of US $375/ton, based on operation of a 92 ton per day underground mine.

A cutoff grade of 4% antimony was used in our analysis. A 4% cutoff grade should be regarded as 4% antimony equivalent. No cutoff grade was used for gold, as antimony was the primary commodity being examined, and none of the resource polygons contained less than 0.05 oz/ton gold.

Total Probable Lode Mineral Reserves, Nolan Creek Area effective January, 1 2009

Cautionary Note to Investors concerning estimates of Probable Reserve

Readers are cautioned that the following estimates are under the category of a probable reserve and they are not a proven reserve, which requires a higher degree of feasibility study. These values are based off of a preliminary feasibility study, which is not the same as a legal feasibility study.

Silverado’s Probable Lode Mineral Reserves, Nolan Creek Area

Reserve Category	Cut-Off Grade (% Sb)	Quantity (tons)	Grade (% Sb)	Metal (ton Sb)	Grade (oz/ton Au)	Metal (oz Au)
Probable	4.0	42,412	28.00	11,880	0.408	17,300

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Notes:

• The effective date of these resources is January 1, 2009
• Rounding may result in some discrepancies.
• No processing recovery factors have been applied to these resource figures.
• The unit ton refers to short tons.
• Cut-off grade is 4.0% Sb ‘equivalent’, which the combined values of gold plus antimony expressed in terms of antimony alone.
• Effective date of the estimate is January 1. 2009. The 2009 drill program was not involved with the current reserve block and as such did not affect the grade or tonnage listed.

Total Indicated Lode Mineral Resources, Nolan Creek Area effective January 7, 2010

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.

The following table summarizes the indicated mineral resources for the Workman’s Bench gold and antimony deposit as a result of the 2009 investigation. The 2009 exploration program focused on the ‘A Zone’ in an area vertically above the current mineral reserve block and was not previously drilled or investigated prior to 2009. The effective date of these resources is January 7, 2010.

Silverado’s Indicated Lode Mineral Resources, Nolan Creek Property

Resource Category	Vein-Fault Ore Zone	Cut-off (% Sb)	Quantity (short tons)	Grade (% Sb)	Metal (ton Sb)	Grade (oz/ton Au)	Metal (oz Au)
Indicated	A Zone	4.0	11,394	20.00	2,278.4	0.244	2,777.0
Indicated	B Zone	4.0	645	20.51	132.3	0.099	64.1
Indicated	A and B Combined	4.0	12,039	20.02	2,410.7	0.236	2,841.1

Notes:
-	Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
-	Rounding may result in some discrepancies.
-	No processing recovery factors have been applied to these resource figures.
-	The unit ton refers to short tons.
-	Cut-off grade is 4.0% Sb ‘equivalent’, which refers to the combined values of gold plus antimony expressed in terms of antimony alone.

Mineral Resources that are not mineral reserves do not have demonstrated economic viability.

Total Inferred Lode Mineral Resources, Nolan Creek Area effective January 7, 2010

Cautionary Note to U.S. Investors concerning estimates of Inferred Resources

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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.

The following table summarizes the inferred mineral resources for the gold and antimony deposit, effective January 7, 2010.

Resource Category	Deposit	Cut-off (% Sb)	Quantity (short tons)	Grade (% Sb)	Metal (ton Sb)	Grade (oz/ton Au)	Metal (oz Au)
Inferred	Pringle	4.0	12,817	19.61	2,513.8	0.499	6,390.4
Inferred	Workman’s	4.0	21,389	12.11	2,590.6	0.272	5,816.6
Inferred	Pringle + Workman’s	4.0	34,206	14.92	5,104.4	0.357	12,207. 0

Notes:
-	Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
-	Rounding may result in some discrepancies.
-	No processing recovery factors have been applied to these resource figures.
-	The unit ton refers to short tons.
-	Cut-off grade is 4.0% Sb ‘equivalent’, which refers to the combined values of gold plus antimony expressed in terms of antimony alone.

Mineral Resources that are not mineral reserves do not have demonstrated economic viability.

Plan of Operations:

The plan of operations for the Nolan Gold Project for the remainder of the 2010 fiscal year is the advancement toward the development and mining stage of our Nolan Gold and Antimony Project, especially along the southwestern end of the Solomon Shear Zone in the Workman’s Bench, Pringle and Hillside Areas. The Company is in a transitional phase between exploration and development. The recent preliminary feasibility study effective January 1, 2009, supported a mineral reserve of antimony and gold underlying the southwestern portion of the Solomon Shear Zone, an area referred to by the Company as Workman’s Bench. The 2008 feasibility study by Bundtzen concluded that the Nolan Gold and Antimony Project in the Workman’s Bench area is economically viable.

Our plan of operations involves collecting a 1,000 cu yd bulk sample of the stibnite-gold vein material from the mineralized zones referred to as the ‘A’ Zone and possibly ‘B’ and West Zones. The bulk sample will be for larger scale milling and processing tests, and a more accurate mineralogical determination of the gold, especially what the Company has termed ‘nugget effect’ of the gold found in the massive stibnite veins. The Company believes that the grade of gold will increase upon the extraction of the larger scale bulk sample due to the ‘nugget effect’ which is not represented during the drilling effort. The successful extraction of a 1,000 cu yd sample will give a better indication of the special and physical relationships between the gold and the antimony. The bulk sample is also necessary for additional verification of the purity of the antimony content in the stibnite and whether or not at depth there is a potential for zonation of increased deleterious metals that could contaminate the antimony ore.

Also, the plan of operations for 2010 involves performing a variety of characterization studies in preparation for the development stage and for permitting requirements necessary for the future production of the antimony-gold deposit underlying the Workman’s Bench. These studies include but are not limited to additional hydrologic studies proximal to our planned underground workings, environmental baseline studies of the flora and fauna and the baseline chemical and physical parameters of the creek water, and acid-base accounting (ABA) studies of the ore-hosting rock determining an appropriate, effective and safe disposal of acid mine waste rock.

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Much of the work planned for 2010 is season-dependent. During the summer months we plan to use our diamond core drill for infill drilling for additional reserve estimates and structural interpretation. We plan to drill a minimum of 30 shallow (200 to 500 ft) NQ diamond core drill holes, as well 30 deeper holes (> 500 ft) into the Solomon Shear Zone. Also, many of the formerly mentioned characterization studies will be continued through the summer months. Depending on available capital, we plan the procurement of necessary facility and system upgrades, as well as the acquisition of necessary equipment and the construction of a pilot mill facility. Currently we have a fully functioning all-season enclosed 23 man camp with three functioning offices with computers and internet access. The camp has a STW treatment plant for sewage and graywater treatment. The camp site also has a large mechanics shop for working on heavy equipment such as backhoes and bulldozers. The camp also has multiple ADEC approved containments with tanks capable of storing 30,000 gallons of diesel fuel, and a peripheral explosives storage area.

Considering the studies last fall and this spring of core drilled in 2009 on Pringle Bench disclosing continual antimony and more significantly the discovery in drill core of high grade drill core assays (+1 to +6 oz gold) along with the continued encountering of wide sections of quartz carbonate stock work veins surrounding the main vein with widths of up to 60 feet showing native gold and stibnite (antimony sulfide); the Company has determined it could accomplish its metallurgical work on both the Pringle and SW Workman’s Bench areas by taking a split of the large HQ2 diamond drill core and creating bulk samples from select zones as identified geologic core by logging and the work performed on these bulk samples would suffice for metallurgical information rather than samples taken directly from underground. This is possible due largely to the continuity of the mineralized vein from one hole to another and to the competency of the country rock around the main vein and between veins in the area of the mineralized quartz carbonate stockwork.

Readers and investors need to take caution, in that much of the work planned in 2010 is contingent upon available funding and the success and speed of the permitting process.

The proposed drilling program for 2010 will be aimed at lode gold and antimony exploration. Lode drilling will focus on Pringle Bench, Workman’s Bench and the Hillside Prospect along the Solomon’s Shear trend, and is 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. Since the Project is advancing into the development stage, exploration drilling will not be conducted in the Fortress area which is part of a gold bearing east-west trending deformation zone.

Based on the new 2010 drill data, Company and contract geologists along with the Company QP have confirmed that the gold and antimony mineralized zones correlate with the surface geochemistry and geophysical data that extends northeast past Pringle Bench along the strike through an area referred to as the Hillside Lode Prospect. The Company has stated previously that the Hillside Area was thought to be the source of the placer gold mined from the gravel benches located along the left limit of Nolan Creek between Smith and Archibald Creeks. The Hillside Lode Prospect is located uphill of the gold-rich gravel benches mined by Silverado as recent as 2006.

In addition to the drill program, the Company has been aggressively seeking permits and also compiling various studies by numerous contractors to meet application requirements for ongoing permits. In order for the project to advance to the development stage at Nolan, the permitting process involves various characterization studies. Some of these studies are seasonally dependent and some require time periods that can delay the permitting process. The baseline water quality sampling which began in June of 2008, was halted due to freezing temperatures during October of 2008, and was continued in early June of 2009. The last baseline water sample for 2009 was collected in late September, and the sampling is continuing

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On May 14, 2010 the United States Army Corps of Engineers issued a five year permit from that date. The permit allows the Company to conduct Hard Rock Exploration to include diamond core drilling at the Nolan Creek Mine.

The access road into the Nolan Creek camp as well as the 26 man camp facility received construction upgrades in 2009 in preparation for the 1,000 cubic yard bulk ore sample that the Company has been permitted to sample. Essential to the bulk sample program and future development is the environmental baseline and characterization studies that include Acid Rock Drainage studies also known as acid-base accounting, as well as the water quality baseline sampling. Samples of the ore and wall rock gangue from various core intercepts and also wall rock from the ‘A’ zone were submitted by the QP to analytical labs for determination of acid generating potential. The Company’s QP has directed a third party engineering firm to conduct various geotechnical studies of the wall rock and ore rock.

The Company, as per the QP, is still seeking a calcareous rock unit that is accessible for extraction on the Nolan property. Permits for the extraction of the calcareous rock will not be applied for until the Company has verified that such a rock unit is accessible. The extraction of a calcareous rock could be used as a buffering liner for temporary storage of waste rock that may have acid generating potential.

During the next three months, Silverado will continue to implement the recommendations of the preliminary feasibility study that was completed by the Company QP, Thomas K. Bundtzen. The QP will determine additional resource estimates and these estimates will be disclosed to the public as soon as they are completed by the QP. The QP will also oversee geotechnical studies as well as the acid rock characterization study. The Company will continue upgrades to the infrastructure at Nolan. The company plans to construct additional access trails for drilling into the Hillside Zone and will perform additional surveying for planning and design purposes. The Company will continue with aggressive permitting and will seek additional capital needed for the procurement of a pilot mill and equipment that will be used during the extraction and processing of the permitted 1,000 cubic yard bulk sample of gold and antimony ore.

During the next three months, Silverado plans to initiate lode development in the Workman’s Bench area as follows:

1.	Continued aggressive permitting.
2.	Begin the 2010 diamond core drill program which will utilize a minimum of two mobile drill rigs. Depending on access to the more remote drill sites, the Company plans on drilling a minimum of 30,000 feet of NQ2 or larger diameter core from the Solomon Shear Zone at Nolan.
3.	Baseline characterization studies for permitting purposes.
4.	Acid and Base Accounting (ABA) for potential acid drainage issues.
5.	Procurement of equipment and infrastructure upgrades needed for the underground extraction of a 1,000 cubic yard bulk sample.
6.	Development of additional road infrastructure along the northern extension of the Solomon Shear Zone (Hillside Prospect) that has not been drilled by a diamond core drill to date.
7.	Possible underground extraction of a bulk sample of antimony and gold ore for additional processing studies and assays.

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We will be seeking to raise up to approximately $50,000,000 to continue our exploration and permitting, while continuing and beginning mining development activities on the Nolan Gold Project. The actual amount that we spend on these projects will depend on the actual amount of funds that we are able to raise. We are presently seeking to obtain sufficient financing to enable us to proceed with these plans.

2. HAMMOND PROPERTY

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.

The Company leases 24 federal placer mining claims and 36 federal lode mining claims from Alaska Mining Company, Inc. (“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.

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 a prospect for additional discoveries. This project will require additional funding. 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.

3. EAGLE CREEK PROPERTY

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. There has been no legal survey on the claims. Ownership of the claims is in the name of Silverado Gold Mines Inc. There is an "option to purchase" agreement with Arley Taylor (i.e., now with his descendants), to purchase a 100% interest in the property for $400,000, of which $43,000 remains to be paid. The amount of $5,000 per year is required to be paid to keep the agreement in good standing and applies to the buyout price. The original option agreement with Arley 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). We have continued to make option payments on the Eagle Creek property based on the agreement, and as a result, all of our mineral claims and options are in good standing.

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. The Number One Vein on this property was the lode quartz gold structure that was historically mined commercially for antimony.

Historically, Eagle Creek was Alaska’s second largest antimony producer. In the late 1980s, Silverado built a 100 ton per day (TPD) gravity plant and processed the old mine dumps, successfully selling all antimony produced. In addition to the high-grade gold bearing quartz veins found on Silverado’s large Eagle Creek property, the Company, in 2006, identified what appeared to be a gold mineralized pluton which is a granitic or igneous rock located on the claims above the placer gold Treasure Creek portion of the property. This may lead to the development of a gold deposit, and may make ideal feedstock for the Kinross Fort Knox mill nearby.

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Annual assessment work will be carried out 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 and the Number One Vein system.

No funding has been advocated for the 2010 work plan. Whereas historic commercially viable mining took place on the Number One (or "Scrafford") Vein, and whereas Silverado has successfully drilled and hit significant widths of high-grade or massive stibnite (antimony sulfide) and significant widths with good gold grades, it has nonetheless yet to complete a definitive drilling program sufficient to indicate reserves, and therefore there is no assurance that a commercially viable economic mineral deposit exists on the property.

4. ESTER DOME PROPERTY

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 Gold Mines Inc. is the registered owner of all claims. The total area of all claims equals approximately 2.5 square miles and all claims are valid. There has been no legal survey on the claims.

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.

Reclamation work to complete the closure of the Grant Mill Tailings Pond is in the permitting stages. The earthwork construction required to close the tailings pond requires permits issued by the Alaska Department of Environmental Conservation. The Company has commissioned a third party environmental and engineering firm to assist with the permitting process. A cost analysis of the tailings pond closure is under review by the Company and by a third party environmental and geotechnical engineering firm. The pond is filled to capacity, and will be capped and decommissioned after final approval of the tailings pond closure plan is received from State of Alaska regulatory agencies. There will be limited field work on the property during the summer of 2010, which will consist of small scale surveys and minor geochemical studies.

Due to the current price of gold, the Company is considering whether to increase exploration efforts on the property. Currently, however, the Company is primarily focused on the continued exploration and future development of the Nolan Gold and Antimony Project in northern Alaska.

LIQUIDITY AND CAPITAL RESOURCES

Our current ratio (current assets divided by current liabilities) as of May 31, 2010 was 0.05 as compared to 0.37 as of November 30, 2009. This ratio is commonly used as a measure of a company’s liquidity. We look at actual dollars in analyzing our liquidity. Since the Company’s cash inflow has been generated mainly from sales of shares of the Company’s common stock, gold sale proceeds earned during the exploration stage, debentures and loans, it will be very difficult for the Company to meet the current and anticipated obligations without raising additional capital. If we are not able to raise adequate capital and to do so in a timely manner, we will not be able to fully implement our business plan or sustain ongoing operations.

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As of May 31, 2010, the Company had a working capital deficit of $2,289,000 as compared to a working capital deficit of $1,272,000 as of November 30, 2009. The Company had $34,298 cash on hand as of May 31, 2010 as compared to no cash and cash equivalents on hand as of November 30, 2009. The Company’s total assets for such periods were $2,508,000 (November 30, 2009: $3,145,000) and the total current assets were $124,000 (November 30, 2009: $745,000).

As of May 31, 2010, the Company’s current assets consist of $34,298 (November 30, 2009: $Nil) in cash, $6,316 (November 30, 2009: $6,316) in gold inventory and $83,796 (November 30, 2009: $738,473) in prepaid and other receivables. Included in prepaid and other receivables were non-cash prepaid consulting and other fees of $58,333 (November 30, 2009: $716,865) paid through issuances of the Company’s common stock under the Company’s equity compensation plans.

The majority of the Company’s assets are long-term or non-cash in nature and thus considered being of lower liquidity.

The Company’s mineral rights were valued at $1,479,000 as of May 31, 2010 as compared to $1,399,000 as of November 30, 2009, an increase of $80,000 or 6%. The increase in the value of our mineral rights this past six months is directly attributable to $80,000 in an accrued royalty payment. The net book value of our fixed assets was $905,000 as of May 31, 2010 as compared to $1,002,000 as of November 30, 2009, a decrease of approximately $97,000 or 10%. The decrease in the net book value of our fixed assets was due to depreciation.

The current liabilities as of May 31, 2010 totaled $2,414,000 as compared to $2,017,000 as of November 30, 2009, an increase of approximately $397,000 or 20%. Included in current liabilities are $1,002,000 (November 30, 2009: $1,064,000) due to related parties, which has been classified as financing activities in the Company’s cash flow statements, and $1,183,000 (November 30, 2009: $883,000) of accounts payable and accrued liabilities.

The Company has not yet generated revenues since recommencement of the exploration stage on December 1, 2001 and our cash was primarily generated from the sale of our securities. During the six months ended May 31, 2010, the Company raised $337,427 of net proceeds through completed private placements and received $80,950 through uncompleted private placement subscriptions and warrants exercise. During the fiscal year ended November 30, 2009, the Company raised $2,047,000 of net proceeds through completed private placements and received $100,000 through uncompleted private placement subscriptions. In addition, the Company received $237,000 as a result of mining equipment disposals and $52,000 as a result of gold inventory sales during the fiscal year ended November 30, 2009.

During the six months ended May 31, 2010, the Company spent $286,000 (2009: $305,000) on the mineral exploration program. In addition, the Company has spent $1,733,000 (2009: $3,105,000) on other operating activities. The Company has been reviewing its budgets for its current business needs and its further exploration and early stage production at its Nolan Creek property in Alaska. Our plan of mining operations in Alaska anticipates that we will need to raise and expend approximately $10,560,000 during fiscal year 2010. We will also need to raise and spend approximately $3,000,000 on general and administrative costs during fiscal year 2010.

The Company expects to continue to be funded primarily from equity financings and will continue the current process of seeking to arrange financing of those operational budgets, exploration and near term production to meet the requirements of the work program. The ability of the Company to complete the exploration and development of its mineral properties is dependent on the Company’s ability to obtain the necessary financing.

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There is no assurance that we will be able to raise the financing necessary to enable us to implement our business plan.

SEGMENT INFORMATION

The Company operates in one reportable segment, located in United States, being the acquisition and exploration of mineral properties. The Company’s development of low-rank coal-water fuel, located in United States, is in its initial stages and is not a reportable segment. Segmented information has been compiled based on the geographic regions that the Company and its subsidiaries registered and performed exploration and administration activities. A summary of financial information by geographical areas is disclosed in footnote 13 of the Company’s interim consolidated financial statements for the fiscal quarter ended May 31, 2010 (Item 1, above).

RESULTS OF OPERATIONS – Six months ended May 31, 2010 and 2009

The Company has not generated revenues since recommencement of the exploration stage from December 1, 2001 to May 31, 2010. For the six months ended May 31, 2010, we reported a net loss of $2,174,000, or $0.001 per share, compared to a net loss of $4,304,000, or $0.004 per share for the same period ended May 31, 2009, a decrease of approximately 49%.

The major decreases in six months ended May 31, 2010, as compared to the same period in 2009, were the Company’s exploration expenses by $19,000, its related party charges in excess of cost by $251,000, management service fees by $362,000, consulting fees by $788,000, and transfer agent and filing fees by $29,000. These decreases were mainly due to cash limitations and the development of a restructuring plan that the Company is working on to fund its exploration and development activities.

The major increases included in the net loss for six months ended May 31, 2010, as compared to the same period in 2009, were increases of $79,000 for legal and other professional fees and $104,000 for interest expenses. Such increases were mainly due to cash constraints and the increased legal and other profession requirements related to the Company’s efforts relating to restructuring, equity financing, development and expansion.

RESULTS OF OPERATIONS – Three months ended May 31, 2010 and 2009

The Company has not generated revenues since recommencement of the exploration stage from December 1, 2001 to May 31, 2010. For the three months ended May 31, 2010, we reported a net loss of $1,037,000, or $0.001 per share, compared to a net loss of $2,744,000, or $0.003 per share for the same period ended May 31, 2009, a decrease of approximately 62%.

The major decreases in three months ended May 31, 2010, as compared to the same period in 2009, were the Company’s related party charges in excess of cost by $111,000, management service fees by $177,000, consulting fees by $613,000, and reporting and investor relations by $33,000. These decreases were mainly due to cash limitations and the development of a restructuring plan that the Company is working on to fund its exploration and development activities.

The major increases included in the net loss for three months ended May 31, 2010, as compared to the same period in 2009, were increases of $13,000 for exploration expenses, $74,000 for office expenses and $88,000 for interest expenses. Such increases were mainly due to the increased requirements related to the Company’s efforts relating to restructuring, equity financing, development and expansion.

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RELATED PARTY TRANSACTIONS

The details of related party transactions are disclosed in footnote 10 of the Company’s interim unaudited consolidated financial statements for the fiscal quarter ended May 31, 2010 (Item 1, above).

CRITICAL ACCOUNTING POLICIES

The details of our critical accounting policies are disclosed in footnote 2 of the Company’s interim unaudited consolidated financial statements for the fiscal quarter ended May 31, 2010 (Item 1, above).

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.

INFLATION

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, Silverado is not required to provide the information required by this Item.

ITEM 4. 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 and our internal control over financial reporting as of May 31, 2010. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer Garry L. Anselmo and our Chief Financial Officer Donald Balletto. Based upon that evaluation, it was concluded that our disclosure controls and procedures and our internal control over financial reporting are effective to ensure, among other things, that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated, recorded, processed, communicated, and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our 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:

a)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;
b)	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 are being made only in accordance with authorizations of our management and directors; and
c)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

During the six months ended May 31, 2010, there were no changes that had a material effect on, or are reasonably likely to affect, our internal control over financial reporting.

It should be noted that an internal control system, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the controls system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. In addition, this evaluation was made in light of the fact the Company has no operation revenues and limited cash on hand.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to, and its property is not the subject of, any material pending legal proceeding, in either case other than ordinary routine litigation incidental to the business. The Company also is not aware of any proceeding that a governmental authority is contemplating.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company has not sold any unregistered securities during the period covered by this report other than those previously reported on a Current Report on Form 8-K filed with the Securities and Exchange Commission.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is not currently in material default of indebtedness that exceeds 5% of the total assets of the Company and its consolidated subsidiaries.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

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	Amendment to Change of Control Agreement between the Company and Garry L. Anselmo (6)
10.6	Operating Agreement between the Company and Tri-Con Mining Ltd. Dated January 1, 1997 (5)
10.7	Operating Agreement between the Company and Tri-Con Mining Inc. dated January 1, 1997 (6)
10.8	Operating Agreement between the Company and Tri-Con Mining Alaska Inc. dated January 1, 1997 (6)
10.9	Form of Warrant Exercise Agreement between the Company and certain of the selling security holders (8)
10.10	Form of Delay Agreement between the Company and certain of the Selling Shareholders (8)
10.11	2006 Stock Option Plan (10)
10.12	2006-II Stock Option Plan (11)
10.13	2007 Stock Option Plan (12)
10.14	Shared Well Agreement between the Company and Sukakpak, Inc., dated May 17, 2007 (14)
10.15	2007-1 Equity Compensation Plan (13)
10.16	Lease Agreement between the Company and TA Properties (Canada) Ltd., dated March 30, 2007 (15)
10.17	Indemnity Agreements between the Company and Garry L. Anselmo, Stuart C. McCulloch, and James F. Dixon, each dated October 27, 2008 (16)
10.18	Indemnity Agreements between the Company and Garry L. Anselmo, Stuart C. McCulloch, Donald G. Balletto, Robert M. Dynes and John Mackay, each dated December 23, 2009 (17)
10.19	2009 Equity Compensation Plan (18)
10.20	2009-II Equity Compensation Plan (19)
10.21	Equity Line of Credit Agreement between the Company and Ashborne Finance Ltd. (20)
10.22	Consulting Agreement between the Company and 1315781 Ontario Inc. (21)
10.23	Note Purchase Agreement between the Company and St. George Investments, LLC. (22)
10.24	2009-III Equity Compensation Plan (23)
10.25	2010-I Equity Compensation Plan (24)
14.1	Code of Ethics (9)
31.1 *	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
31.2 *	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
32.1 *	Certification of Principal 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 Principal 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 fiscal year ended November 30, 1995.
(5)	Filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 1996.
(6)	Filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the fiscal 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.

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(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.
(12)	Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on February 20, 2007.
(13)	Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on September 7, 2007.
(14)	Filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the fiscal year ended November 30, 2007.
(15)	Filed as an exhibit to the Company’s Quarterly Report on Form 10-QSB filed on July 15, 2008.
(16)	Filed as exhibits to the Company’s Current Report on Form 8-K filed on October 29, 2008.
(17)	Filed as exhibits to the Company’s Current Report on Form 8-K filed on December 23, 2009.
(18)	Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on January 29, 2009.
(19)	Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on June 1, 2009.
(20)	Filed as an exhibit to the Company’s Current Report on Form 8-K filed on May 12, 2009.
(21)	Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q filed on October 15, 2009.
(22)	Filed as an exhibit to the Company’s Current Report on Form 8-K filed on January 28, 2010.
(23)	Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on December 16, 2009.
(24)	Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on June 9, 2010.

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SILVERADO GOLD MINES LTD.
DATE: July 15, 2010	/s/ Garry L. Anselmo
	Garry L. Anselmo
	President, Chief Executive Officer (Principal
	Executive Officer)
DATE: July 15, 2010	/s/ Donald Balletto
	Donald Balletto
	Chief Financial Officer
	(Principal Financial Officer)

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