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: August 31, 2011

[ ] 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.)

5455 152^ndStreet, Suite 308
Surrey, British Columbia, Canada	V3S 5A5
(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] 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: 2,914,377,244 common shares, no par value, outstanding as of October 4, 2011.

SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES

(An Exploration Stage Company)

INDEX

Quarterly Period Ended August 31, 2011

Item 1.	Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
PART II – OTHER INFORMATION		40
Item 1.	Legal Proceedings	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Removed and Reserved	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
SIGNATURES		43

	Page
FINANCIAL STATEMENTS

Consolidated Balance Sheets as of August 31, 2011 (unaudited) and November 30, 2010	5

Consolidated Statements of Operations for the three months and nine months ended August 31, 2011 and 2010, and for the period from December 1, 2001 (Recommencement of Exploration Stage) through August 31, 2011 (unaudited)	6

Consolidated Statements of Cash Flows for the nine months ended August 31, 2011 and 2010, and for the period from December 1, 2001 (Recommencement of Exploration Stage) through August 31, 2010 (unaudited)	7

Notes to the Consolidated Financial Statements as of August 31, 2011 (unaudited)	8-28

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited consolidated financial statements for the three and nine month periods ended August 31, 2011 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Stated In United States Dollars)

	August 31,		November 30,
	2011		2010
	$		$
	(unaudited)
ASSETS
Current Assets
Cash	501		66,267
Gold inventory (Note 3)	–		6,316
Prepaid expenses and other receivables (Note 4)	136,494		316,393
Total Current Assets	136,995		388,976
Restricted Cash Equivalent (Note 5)	9,189		–
Mineral Properties and Rights (Note 6)	1,759,522		1,600,442
Property and Equipment (Note 7)	541,074		494,416
Total Assets	2,446,780		2,483,834

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Cheques written in excess of cash balance	6,970		–
Accounts payable and accrued liabilities	1,150,264		915,819
Due to related parties (Note 12)	680,463		871,744
Tenant inducement (Note 8)	11,685		–
Promissory notes (Note 9)	365,000		62,327
Convertible debt, net of unamortized discount of $125,058 (Note 10)	224,942		10,620
Mineral claims royalty payable (Note 6(c))	610,000		550,000
Total Current Liabilities	3,049,324		2,410,510
Tenant Inducement (Note 8)	55,238		–
Asset Retirement Obligation (Note 11)	586,205		565,016
Total Liabilities	3,690,767		2,975,526
Commitments and Contingencies (Notes 1 and 17)
Subsequent Events (Note 21)
Stockholders’ Deficit
Common Stock, unlimited shares authorized, no par value; 2,921,377,244 shares issued and outstanding (November 30, 2010 - 2,441,343,879 shares ) (Note 13)	105,584,639		103,999,508
Additional Paid-in Capital	1,368,584		1,397,805
Shares To Be Issued (Note 13)	251,671		207,716
Deficit Accumulated During the Exploration Stage	(108,448,881	)	(106,096,721	)
Total Shareholders’ Deficit	(1,243,987	)	(491,692	)
Total Liabilities and Stockholders’ Deficit	2,446,780		2,483,834

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

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(Stated In United States Dollars)

	Accumulated From
	December 1, 2001
	(Date of
	Recommencement of
	Exploration Stage)		Three Months Ended				Nine Months Ended
	to August 31,		August 31,				August 31,
	2011		2011		2010		2011		2010
	$		$		$		$		$
					(Restated –				(Restated –
					Note 22)				Note 22)

Revenue	–		–		–		–		–

Expenses

Accounting and auditing	1,025,571		20,860		29,492		129,530		48,082
Advertising, promotion and travel	3,031,234		1,318		221		4,890		15,643
Consulting fees	13,070,326		1,035		262,222		1,033,417		1,123,750
Depreciation	3,022,986		30,029		53,328		78,976		163,642
Exploration expenses	16,234,598		38,895		74,405		211,752		346,919
Amortization of debt issuance costs	321,078		6		2,763		1,775		6,825
Foreign exchange (gain) loss	(394,276	)	(7,635	)	(28,171	)	(2,243	)	16,687
Legal and other professional fees	1,956,492		17,959		33,964		91,162		270,654
Management services (Note 12)	6,649,872		30,122		42,993		106,626		111,841
Office expenses	5,577,782		68,635		83,450		245,367		316,841
Related party charges in excess of cost incurred (Note 12)	4,939,770		1,532		(23,108	)	7,744		17,048
Reporting and investor relations	1,643,591		28,791		34,252		85,679		165,233
Research	1,064,735		–		–		–		–
Transfer agent and filing fees	480,375		7,697		20,234		39,371		50,557
Impairment of mineral claim expenditures	1,159,529		–		–		–
Impairment of property and equipment	329,679		–		–		–		–
Impairment of leasehold improvements	340,821		–		–		–		–

Total Operating Expenses	60,454,163		239,244		586,045		2,034,046		2,653,722

Operating Loss	(60,454,163	)	(239,244	)	(586,045	)	(2,034,046	)	(2,653,722	)

Gold income earned during the exploration stage

Gold sale proceeds earned during the exploration stage	3,731,722		17,412		–		17,412		–
Cost of gold sold	(3,256,823	)	(6,450	)	–		(6,450	)	–
Gold inventory addition from gold extraction	3,248,056		–		–		–		–

Total Gold Income Earned During the Exploration Stage	3,722,955		10,962		–		10,962		–

Other Income (Expense)

Interest and other income	278,104		10		–		37		77
Interest expenses on capital lease obligations	(333,221	)	–		–		–		–
Accretion of discount on convertible debt and promissory notes	(1,429,389	)	(154,682	)	(68,895	)	(312,511	)	(163,516	)
Other interest expenses and bank charges	(158,387	)	(16,257	)	(10,742	)	(29,746	)	(39,280	)
Penalty on convertible debt	(75,000	)	–		(75,000	)	–		(75,000	)
Commitment fees	(960,000	)	–		–		–		–
Gain (Loss) on disposal of property and equipment	(278,712	)	817		–		817		–
Loss on derivatives	(29,797	)	–		(38,583	)	–		(100,026	)
Gain on derecognition of convertible debentures, promissory note and accrued interest (Note 9(b))	273,154		–		–		12,327		–

Total Other Expenses	(2,713,248	)	(170,112	)	(193,220	)	(329,076	)	(377,745	)

Loss before cumulative effect of accounting change	(59,444,456	)	(398,394	)	(779,265	)	(2,352,160	)	(3,031,467	)

Cumulative effect of accounting change	(99,481	)	–		–		–		–

Net Loss	(59,543,937	)	(398,394	)	(779,265	)	(2,352,160	)	(3,031,467	)

Net Loss Per Share – Basic and Diluted			(0.00	)	(0.00	)	(0.00	)	(0.00	)

Weighted Average Shares Outstanding			2,921,377,244		1,961,368,207		2,888,121,286		1,774,211,507

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

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Stated In United States Dollars)

	Accumulated From
	December 1, 2001(Date
	of Recommencement of
	Exploration Stage)		Nine Months Ended
	to August 31,		August 31,
	2011		2011		2010
	$		$		$

Operating Activities
Net loss	(59,543,937	)	(2,352,160	)	(3,031,467	)
Adjustments to reconcile net loss to cash used in operating activities:
Cumulative effect of accounting change	99,481		–		–
Amortization of debt issue costs	7,500		–		6,825
Depreciation and accretion	3,022,986		78,975		163,642
Loss on disposal of property and equipment	279,529		–		–
Stock-based compensation included in management fees	3,375,644		–		–
Stock issued for debenture	217,687		–		–
Stock issued for consulting and other expenses	7,796,962		885,893		811,266
Prepaid consulting fees expensed	1,249,059		198,693		716,865
Stock issued for commitment fees	960,000		–		–
Financing expense	252,003		–		75,000
Accretion of discount on convertible debt	1,219,951		312,511		159,015
Loss on derivative	29,797		–		100,026
Gain on derecognition of convertible debt, promissory note and accrued interest	(273,154	)	(12,327	)	–
Impairment of mineral claim expenditures	1,159,529		–		–
Impairment of property and equipment	329,679		–		–
Impairment of leasehold improvements	340,821		–		–
Accretion on asset retirement obligation	56,894		21,189		(2,411	)
Changes in operating assets and liabilities:
Cheques issued in excess of cash	6,970		6,970		–
Gold inventory	8,633		6,316		–
Prepaid expenses and deposits	(42,765	)	3,811		(10,139	)
Accounts payable and accrued liabilities	908,157		286,800		285,543
Advances to related party	389,151		(191,281	)	(117,131	)
Net Cash Used in Operating Activities	(38,149,423	)	(754,610	)	(842,966	)
Investing Activities
Purchase of restricted cash equivalent	(9,189	)	(9,189	)	–
Investment in mineral properties and rights	(1,466,022	)	(99,080	)	(99,080	)
Purchase of property and equipment	(3,139,830	)	(58,711	)	(1,206	)
Proceeds from sale of property and equipment, net	825,299		–		–
Net Cash Used In Investing Activities	(3,789,742	)	(166,980	)	(100,286	)
Financing Activities
Repayment of loans payable	(110,728	)	–		–
Repayment of capital lease obligation	(1,131,607	)	–		–
Proceeds from issuance of convertible debt, net	570,000		–		251,000
Proceeds from issuance of promissory notes	377,327		315,000		50,000
Share subscriptions received	203,745		104,453		33,250
Proceeds from issuance of common stock, net	41,782,029		431,877		626,657
Proceeds from exercise of warrants	231,807		4,494		–
Net Cash Provided By Financing Activities	41,922,573		855,824		960,907
Increase (Decrease) In Cash	(16,592	)	(65,766	)	17,655
Cash - Beginning of Period	17,093		66,267		–
Cash - End of Period	501		501		17,655

Supplemental Disclosures
Interest paid			–		73,830
Income taxes paid			–		–

Supplemental Cash Flow Information (Note 19)

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

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

1.	Nature 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 Company is considered to be an Exploration Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. Accumulated results of operations and cash flows are presented from December 1, 2001, the date the Company re-entered the exploration stage.

	The accompanying 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 has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. As at August 31, 2011, the Company has a working capital deficiency of $2,912,329 and has accumulated losses of $108,448,881 since inception and its operations continue to be funded primarily from sales of its stock and the sale of gold extracted during exploration activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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.

	The Company's plan for the 2011 exploration season for its Alaska operations is to drill further reserves and core analysis through a contracted diamond drill operation at the Nolan project and to use the Company's own smaller diamond drill core rig for preliminary exploration drilling on its Eagle Creek property 8 miles North of Fairbanks, Alaska. The Company intends to fund these activities through debt and equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending November 30, 2011. There is no assurance that the Company will obtain the necessary financing to complete its objectives.

2.	Summary of Significant Accounting Policies

	a)	Basis of Presentation and Principles of Consolidation

		These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Silverado Gold Mines Inc. and Silverado Green Fuel Inc. All inter-company transactions and balances have been eliminated. The Company’s fiscal year-end is November 30.

	b)	Interim Financial Statements

		The interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended November 30, 2010, included in the Company’s Annual Report on Form 10-K filed on March 15, 2011, with the SEC.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

2.	Summary of Significant Accounting Policies (continued)

	b)	Interim Financial Statements (continued)

		The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company's financial position at August 31, 2011, and the results of its operations and cash flows for the interim periods ended August 31, 2011 and 2010. The results of operations for the three months and nine months ended August 31, 2011 are not necessarily indicative of the results to be expected for future quarters or the full year.

	c)	Use of Estimates

		The preparation of these consolidated statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation, deferred income tax asset valuations, asset retirement obligations, financial instrument valuations, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

	d)	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.

	e)	Property and Equipment

		Property and equipment are recorded at cost and are depreciated 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

	f)	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 ASC 820, 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 values of cash, other receivables, accounts payable, mineral claims royalty payable, promissory notes, and due to related parties approximate fair values because of the short-term maturity of these instruments. The carrying amount reported in the balance sheet for convertible debt approximates fair value based on current market rates for similar financial instruments. 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.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

2.	Summary of Significant Accounting Policies (continued)

	g)	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.

	h)	Revenue Recognition

		Proceeds from the sale of gold recoveries from test mining are recorded as other income earned during the exploration stage. The Company recognizes revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.

	i)	Mineral Property Costs

		The Company has been in the exploration stage since its inception and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mineral properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at each fiscal quarter end. 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, will be capitalized. Such costs will be amortized using the units-of-production method over the estimated recoverable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

	j)	Asset Retirement Obligation

		The Company records asset retirement obligations in accordance with 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. 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.

	k)	Foreign Currency Translation

		The functional and reporting currency of the Company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 740, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

	l)	Comprehensive Loss

		ASC 220, Comprehensive Income establishes standards for the reporting and display of other comprehensive loss and its components in the consolidated financial statements. As at August 31, 2011 and 2010, the Company has no items that represent other comprehensive loss and, therefore, has not included a schedule of other comprehensive loss in the financial statements.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

2.	Summary of Significant Accounting Policies (continued)

	m)	Long-lived Assets

		In accordance with ASC 360, Property Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

		Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

	n)	Stock-based Compensation

		The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation, and ASC 505-50, Equity-Based Payments to Non-Employees using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

	o)	Basic and Diluted Net Loss Per Share

		The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Shares underlying these securities totaled approximately 338,938,525 as of August 31, 2011.

	p)	Debt Issuance Costs

		The Company recognizes debt issue costs on the balance sheet when incurred, and amortizes the balance over the term of the related debt.

	q)	Income Taxes

		The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

	r)	Reclassifications

		Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the current period’s presentation.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

2.	Summary of Significant Accounting Policies (continued)

	s)	Recently Issued and Adopted Accounting Pronouncements

		In June 2011, ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the update requires certain disclosure requirements when reporting other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income must be reclassified to income. The update is effective for the Company’s fiscal year beginning January 1, 2012. The Company does not expect the updated guidance to have an impact on its consolidated financial position, results of operations or cash flows.

		In May 2011, ASC guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in level 3 of the fair value hierarchy. The update is effective for the Company’s fiscal year beginning January 1, 2012. The Company does not expect the updated guidance to have a significant impact on its consolidated financial position, results of operations or cash flows.

		The Company has implemented all other new accounting pronouncements that are in effect and that may impact its financial statements 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.

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. The following is a summary of gold inventory changes during the nine months ended August 31, 2011, and during the fiscal year ended November 30, 2010:

				Weighted
	Troy Ounces			Average Price			Value

Balance as of November 30, 2009	10		$	657.50		$	6,316
Cost of gold sold	–			–			–
Balance as of November 30, 2010	10		$	657.50		$	6,316
Cost of gold sold	(10	)		(657.50	)		6,316
Balance as of August 31, 2011	–		$	–		$	–

4.	Prepaid Expenses and Other Receivables Prepaid expenses and other receivables consist of:

		August 31, 2011		November 30, 2010

Prepaid consulting and other fees resulting from share issuance	$	2,605	$	223,193
Shares issued for attorney retainer		92,500		48,000
Total prepaid expenses resulting from share issuance		95,105		271,193
Insurance deposits, GST refund and others		41,389		45,200
Total	$	136,494	$	316,393

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

5.	Restricted Cash

	The Company has pledged a $9,189 (Cdn$9,000) GIC as security held on a corporate credit card.

6.	Mineral Properties and 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 August 31, 2011. 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.

	Since the Company has no proven reserves on its properties as of August 31, 2011, the Company does not amortize the capitalized mineral costs, but evaluates the capitalized mineral costs periodically for impairment in accordance with ASC 360 and has not recognized any impairment. A summary of such capitalized direct costs for the nine months ended August 31, 2011, and for the fiscal year ended November 30, 2010 is as follows:

		Nolan		Ester Dome		Hammond		Eagle Creek		Total
		(a)		(b)		(c)		(d)
Balance as of November 30, 2009	$	743,859	$	40,702	$	525,900	$	88,140	$	1,398,601
Additions during the year:
Claim fees paid during the year		85,953		9,398		8,400		13,090		116,841
Royalty payment		–		–		–		5,000		5,000
Accrued royalty payment		–		–		80,000		–		80,000
Balance as of November 30, 2010		829,812		50,100		614,300		106,230		1,600,442
Additions during the period:
Claim fees paid during the period		85,540		140		8,400		–		94,080
Royalty payment		–		–		–		5,000		5,000
Accrued royalty payment		–		–		60,000		–		60,000
Balance as of August 31, 2011	$	915,352	$	50,240	$	682,700	$	111,230	$	1,759,522

	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.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

6.	Mineral Properties and Rights (continued)

	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 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. This property consists of 1 unpatented Federal claim and 52 state mineral claims. 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 a royalty payment of 3% of net profits thereafter. The mill has remained inactive since February 1989 and the plant and equipment cost was written down on our accounting records. During fiscal 2009, the work on Grant Mine was limited to assessment work. Upon payment of the $2,000,000, the titles of the mineral claims will be transferred.

	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 a royalty payment of 3% of net profits thereafter.

	iii)	Dobb’s: This leased 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.

	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 August 31, 2011, the capitalized mineral rights of $682,700 (November 30, 2010 - $614,300) for the Hammond property includes royalty accruals totalling $610,000 (November 30, 2010 - $550,000) that are unpaid, and are included in mineral claims payable on the accompanying consolidated balance sheets. During the nine months ended August 31, 2011, the Company accrued $60,000 in payable royalties.

	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 $33,000 remains to be paid. This property is subject to a royalty of 15% of net profits. A payment in the amount of $5,000 is due on August 1st of each year until the remaining $33,000 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. On August 1, 2011, the Company paid the required $5,000 option payment.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

7.	Property and Equipment

	Property and equipment primarily include capital expenditures associated with the Company’s corporate office, and mining equipment and camp facilities at the Nolan Gold Project in Alaska. Depreciation expense for the nine months ended August 31, 2011, was $78,976 (2010 - $163,642).

	A summary of the Company’s property and equipment as of August 31, 2011, and November 30, 2010, is as follows:

			August 31,	November 30,
			2011	2010
		Accumulated	Net Carrying	Net Carrying
	Cost	Depreciation	Value	Value
	$	$	$	$

Offices
Office leasehold improvements	124,123	6,420	117,703	–
Computer equipment and software	140,079	137,836	2,243	3,951
Furniture and fittings	394,559	391,060	3,499	3,725

Mining Project
Nolan gold project buildings	63,000	63,000	–	–
Leasehold improvements	48,123	38,499	9,624	16,843
Nolan mining equipment	1,017,987	641,265	376,722	435,735
Auto and trucks	19,193	12,155	7,038	9,917
Assets under construction	24,245	–	24,245	24,245
	1,831,309	1,290,235	541,074	494,416

	Assets under construction are not subject to depreciation until substantially complete.

8.	Tenant Inducement

	On May 1, 2011, the Company received advances of $70,956 (Cdn$69,494) from the landlord of its office towards leasehold improvements as an inducement to enter into the lease agreement described in Note 17(c). The advances are repayable in full should the Company terminate the lease early without the consent of the landlord. During the nine months ended August 31, 2011, the Company repaid principal amount of $4,033 (Cdn$3,950) and the remaining balance of the tenant inducement was $66,923 at August 31, 2011.

9.	Promissory Notes

	a)	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 matured on September 1, 2010. As of August 31, 2011, the Company has not repaid the note and has accrued interest of $8,650 which is recorded in accrued liabilities.

	b)	During the fiscal year ended November 30, 2010, the Company received advances of $12,327 from a consultant which is due on demand, and bears interest at 7% per annum. During the nine months ended August 31, 2011, the advances were forgiven by the consultant and the Company recognized a gain of $12,327.

	c)	During the nine months ended August 31, 2011, the Company received several advances totaling $315,000 from various investors and consultants, which are secured by promissory notes. These notes are due on demand and bear interest at rates from 8% to 10% per annum. Interest is due on the first of each month until demand of payment is made by the investor. As of August 31, 2011, the Company accrued interest of $4,906 which is recorded in accrued liabilities.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

10.	Convertible Debt

	a)	On June 15, 2010, the Company entered into a secured convertible note agreement 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 Company paid $7,500 to the Note holder from the proceeds of the sale of the note and the amount was recorded as a discount to the convertible note. The Note holder has the right from December 1, 2010 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 (“compensation shares”) of the Company’s common stock to the Note holder as compensation costs.

		In accordance with ASC 470-20, Debt with Conversion and Other Options, the net proceeds of $67,500 were allocated based on the relative fair values of the convertible note and the compensation shares at time of issuance. The Company allocated $37,779 of the net proceeds to the compensation shares and recorded an equivalent discount. The Company then recognized the intrinsic value of the embedded beneficial conversion feature of $29,221 as additional-paid-in capital and an equivalent discount.

		The total discount immediately after the initial accounting is performed is $74,500 reducing the carrying value of the convertible debt to $500. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan.

		During the year ended November 30, 2010, the Company recorded accretion of discount of $4,420 increasing the carrying value of the loan to $4,920. During the nine months ended August 31, 2011, the Company issued 35,256,411 shares upon the conversion of the principal amount of $75,000. In accordance with ASC 470-20, the Company recognized unamortized discount of $65,522 as interest expense upon the conversion of the note. During the nine months ended August 31, 2011, the Company recorded accretion of discount of $4,558.

	b)	On July 27, 2010, the Company entered into a secured convertible note agreement and issued a convertible note in the sum of $75,000 with a maturity date of July 27, 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 Company paid $7,500 to the Note holder from the proceeds of the sale of the note and the amount was recorded as a discount to the convertible note. The Note holder has the right from December 1, 2010 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 (“compensation shares”) of the Company’s common stock to the Note holder as compensation costs.

		In accordance with ASC 470-20, Debt with Conversion and Other Options, the net proceeds of $67,500 were allocated based on the relative fair values of the convertible note and the compensation shares at time of issuance. The Company allocated $36,901 of the net proceeds to the compensation shares and recorded an equivalent discount. The Company then recognized the intrinsic value of the embedded beneficial conversion feature of $30,099 as additional-paid-in capital and an equivalent discount.

		The total discount immediately after the initial accounting is performed is $74,500 reducing the carrying value of the convertible debt to $500. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan.

		During the year ended November 30, 2010, the Company recorded accretion of discount of $2,501 increasing the carrying value of the loan to $3,001. During the nine months ended August 31, 2011, the Company recorded accretion of discount of $71,999 increasing the carrying value of the loan to $75,000.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

10.	Convertible Debt (continued)

	c)	On September 17, 2010, the Company entered into a secured convertible note agreement and issued a convertible note in the sum of $165,000 with a maturity date of September 17, 2011. The Company received net proceeds of $148,500 and recorded a 10% discount on this 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 from October 1, 2010 to convert any unpaid principal portion, at a conversion price per share equal to the lower of $0.0045 or 70% of the average of the three lowest VWAP prices of the Company’s common stock for the 20 trading days preceding a conversion date. Pursuant to the note agreement, the Company will issue 20,000,000 shares (“compensation shares”) of the Company’s common stock to the Note holder as compensation costs. As at August 31, 2011, the Company has not issued the shares.

		In accordance with ASC 470-20, Debt with Conversion and Other Options, the net proceeds of $148,500 were allocated based on the relative fair values of the convertible note and the compensation shares at time of issuance. The Company allocated $62,459 of the net proceeds to the compensation shares and recorded an equivalent discount. The Company then recognized the intrinsic value of the embedded beneficial conversion feature of $85,541 as additional-paid-in capital and an equivalent discount.

		The total discount immediately after the initial accounting is performed is $164,500 reducing the carrying value of the convertible debt to $500. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan.

		During the year ended November 30, 2010, the Company recorded accretion of discount of $1,202 increasing the carrying value of the loan to $1,702. During the nine months ended August 31, 2011, the Company recorded accretion of discount of $104,589 increasing the carrying value of the loan to $106,291.

	d)	On October 25, 2010, the Company entered into a secured convertible note agreement and issued a convertible note in the sum of $110,000 with a maturity date of October 25, 2011. The Company received net proceeds of $99,000 and recorded a 10% discount on this 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 $0.004 or 65% of the average of the three lowest VWAP prices of the Company’s common stock for the 20 trading days preceding a conversion date. Pursuant to the note agreement, the Company will issue 15,000,000 shares (“compensation shares”) of the Company’s common stock to the Note holder as compensation costs. As at August 31, 2011, the Company has not issued the shares.

		In accordance with ASC 470-20, Debt with Conversion and Other Options, the net proceeds of $99,000 were allocated based on the relative fair values of the convertible note and the compensation shares at time of issuance. The Company allocated $45,964 of the net proceeds to the compensation shares and recorded an equivalent discount. The Company then recognized the intrinsic value of the embedded beneficial conversion feature of $52,536 as additional-paid-in capital and an equivalent discount.

		The total discount immediately after the initial accounting is performed is $109,500 reducing the carrying value of the convertible debt to $500. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan.

		During the year ended November 30, 2010, the Company recorded accretion of discount of $497 increasing the carrying value of the loan to $997. During the nine months ended August 31, 2011, the Company recorded accretion of discount of $42,654 increasing the carrying value of the loan to $43,651.

	e)	On December 6, 2010, the Company issued a 6% convertible redeemable note in the amount of $34,852 with a maturity date of December 6, 2012. The note bears interest at 6% per annum and shall increase to 8% upon an event of default. At any time, the Company has the option to redeem this note and pay the Note holder 150% of the unpaid principal. The note 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 65% of the average of the three lowest volume weighted average prices (“VWAP”) of the Company’s common stock for the 20 trading days including the day upon which a notice of conversion is received by the Company.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

10.	Convertible Debt (continued)

Pursuant to ASC 470-20-25, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $23,189 as additional paid-in capital and an equivalent discount that reduced the carrying value of the convertible debenture to $11,663. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan.

On December 7, 2010, the Company issued 16,596,171 unrestricted shares of common stock upon the conversion of the note. In accordance with ASC 470-20, the Company recognized unamortized discount of $23,189 as interest expense.

11.	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 re-vegetating 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 nine months ended August 31, 2011, and for the fiscal year ended November 30, 2010, is as follows:

		Grant			Nolan
		Mine			Project			Total
Balance as of November 30, 2009	$	368,884		$	171,523		$	540,407
Accretion expense		18,444			8,576			27,020
Liabilities settled		(1,511	)		(900	)		(2,411	)
Balance as of November 30, 2010	$	385,817		$	179,199		$	565,016
Accretion expense		14,469			6,720			21,189
Liabilities settled		–			–			–
Balance as of August 31, 2011	$	400,286		$	185,919		$	586,205

	a)	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 nine months ended August 31, 2011, the Company recorded $14,469 (2010 - $13,833) accretion expense.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

11.	Asset Retirement Obligations (continued)

	b)	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.

		As of August 31, 2011, and November 30, 2010, 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 nine months ended August 31, 2011, the Company recorded $6,720 (2010 - $6,432) accretion expense

12.	Related Party Transactions / Balances

	a)	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 bills the Company cost plus 25% for exploration and cost plus 15% for development, mining and reclamation. 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. Both the Company the Tri-Con Group have the right to terminate the agreement in its entirety at any time upon 30 days advances written notice.

		During the nine months ended August 31, 2011, 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 nine months ended August 31, 2011, 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 and the CDN $10,000 monthly fee for the nine months ended August 31, 2011 for a total of US $181,937.

		As of August 31, 2011, the Company owed $676,340 (November 30, 2010 - $849,026) to the Tri-Con Group for exploration and administration services performed on behalf of the Company. The following is a summary of Tri-Con Group charges for the nine months ended August 31, 2011 and 2010:

		Nine months		Nine months
		ended		ended
		August 31, 2011		August 31, 2010

Administration and management services	$	51,596	$	130,702

Amount of total charges in excess of the cost	$	7,678	$	17,048
Percentage of excess of the cost charged over total amount billed		14.88%		13.04%

As of August 31, 2011, the Company owed $3,102 (November 30, 2010 – $3,120) to the President of the Company for amounts advanced. The advances are due on demand, unsecured, and non-interest bearing.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

12.	Related Party Transactions / Balances (continued)

	c)	As of August 31, 2011, the Company owed $1,021 (November 30, 2010 - $nil) to the spouse of the President of the Company for amounts advanced. The advances are due on demand, unsecured, and non-interest bearing.

	d)	As of November 30, 2010, the Company owed $19,598 (Cdn$20,000) to a director of the Company for amounts advanced. The advances were due on demand, unsecured and bore interest at 5% per annum. During the nine months ended August 31, 2011, the Company repaid the advances.

	e)	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 nine months ended August 31, 2011, the Company was billed $22,984 (Cdn$22,500) (2010 - Cdn$67,500) by the private company. At August 31, 2011, the Company is indebted to the private company for $4,224 (November 30, 2010 - $15,372). This amount has been recorded in accounts payable and accrued liabilities.

13.	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 nine months ended August 31, 2011:

	Number of	Common		Shares to
	Common Shares	Stock Amount		be Issued
	#	$		$
Balance as of November 30, 2010	2,441,343,879	103,999,508		207,716
Share Issued:
For Private Placements
$0.004 per share	75,000,000	300,000		–
$0.0021 per unit (1 unit = 1 share and 1 warrant)	100,000,000	210,000		(78,000	)
	175,000,000	510,000		(78,000	)
For Warrant Exercises
$0.00233 per share	1,928,572	4,494		–
For Conversion of Debentures
$0.0021 per share	40,405,695	84,852		–
$0.002184 per share	11,446,887	25,000		–
	51,852,582	109,852		–
Shares granted under Equity Compensation Plans
For consulting fees granted at a weighted average price of $0.00372 per share	230,468,002	835,000		–
For investor relation and shareholder communication services granted at a weighted average price of $0.00346 per share	8,536,084	29,536		–
For legal and other services granted at a weighted average price of $0.00359 per share	12,248,125	43,962		–
	251,252,211	908,498		–
Reclassification of beneficial conversion features on conversions of convertible debt	–	52,410		–
Stock issuance costs	–	(123	)	–
Stock subscriptions received	–	–		104,453
Shares issuable for services	–	–		17,502
Balance as of August 31, 2011	2,921,377,244	105,584,639		251,671

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

13.	Common Stock (continued)

	a)	During the nine months ended August 31, 2011, the Company issued 75,000,000 shares of common stock at $0.004 per share for gross proceeds of $300,000.

	b)	During the nine months ended August 31, 2011, the Company issued 100,000,000 units at $0.0021 per unit for gross proceeds of $210,000. Each unit consists of one share of common stock and one share purchase warrant. Each warrant is exercisable at a price of $0.01 per share for a period of one year.

	c)	During the nine months ended August 31, 2011, the Company issued 1,928,572 shares of common stock upon the exercise of share purchase warrants at $0.00233 per share for gross proceeds of $4,494.

	d)	Pursuant to several agreements for various corporate planning, business development and strategies, media solutions and legal services, the Company issued an aggregate of 251,252,211 shares of the Company’s unrestricted free trading common stock during the nine months ended August 31, 2011, valued at the fair market price on the measurement date, for total consideration of $908,498. These shares were issued under the Company’s Equity Compensation Plans.

	e)	During the nine months ended August 31, 2011, the Company issued an aggregate of 51,852,582 shares of common stock upon the conversion of the convertible notes in the amount of $109,852.

	f)	Pursuant to the convertible note agreements described in Note 10(c) and (d), the Company agreed to issue 35,000,000 shares of common stock at a fair value of $108,424 to the note holder as compensation costs. The amount is included in shares to be issued as at August 31, 2011.

14.	Equity Compensation Plans

	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 August 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.

	On December 2, 2010, the Company adopted the 2010-II Equity Compensation 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-II Plan August not exceed 400,000,000 in aggregate. On December 2, 2010, the Company filed a registration statement on Form S-8 to register all 400,000,000 of such shares.

	During the nine months ended August 31, 2011, the Company issued an aggregate of 251,252,211 (2010 – 185,208,799) shares of common stock under the Company’s Equity Compensation Plans in payment of consulting and other services.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

15.	Stock Options

	There were no stock options granted during the nine months ended August 31, 2011. 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.

	The following table summarizes the continuity of the Company’s stock options:

					Weighted-
			Weighted		Average
	Number		Average		Remaining
	of		Exercise		Contractual Term	Intrinsic
	Options		Price		(years)	Value
			$
Outstanding, November 30, 2009	48,200,000		0.056		2.72
Cancelled	(3,900,000	)	(0.058	)
Outstanding, November 30, 2010	44,300,000		0.056		1.68	–
Cancelled	(5,000,000	)	(0.058	)
Expired	(11,600,000	)	(0.050	)
Outstanding, August 31, 2011	27,700,000		0.058		1.36	–

As at August 31, 2011, the following common stock options were outstanding and exercisable:

		Remaining
		Contractual
	Exercise Price	Life (years)
Number of Options
	$
17,000,000	0.05	1.35
10,700,000	0.07	1.37
27,700,000

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

16.	Stock Purchase Warrants

	During the nine months ended August 31, 2011, 101,749,051 stock purchase warrants, exercisable at weighted average exercise price of $0.009 per share, expired. The Company issued 100,000,000 common stock purchase warrants upon the completion of a private placement during the nine months ended August 31, 2011. Each common stock purchase warrant issued during the period is exercisable into one share of common stock for a period of one year commencing from the date of the subscription agreement. There was no value assigned to these warrants when they were issued. During the nine month period ended August 31, 2011, the Company issued 1,928,572 shares of common stock upon the exercise of stock purchase warrants for gross proceeds of $4,494.

	A summary of the changes in the Company’s common share purchase warrants is presented below:

			Weighted Average
	Number		Exercise Price
			$
Balance November 30, 2009	84,900,000		0.020
Issued	172,307,324		0.0079
Exercised	(82,917,550	)	0.0027
Expired	(48,000,000	)	0.020
Balance November 30, 2010	126,289,774		0.010
Issued	100,000,000		0.01
Exercised	(1,928,572	)	0.00233
Expired	(101,749,051	)	0.009
Balance August 31, 2011	122,612,151		0.00356

As at August 31, 2011, the following common share purchase warrants were outstanding:

		Remaining
		Contractual Life
	Exercise Price	(years)
Number of Warrants
	$
22,612,151	0.01	0.02 - 0.15
100,000,000	0.0021	0.27
122,612,151

17.	Commitments

	a)	The Company 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.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

17.	Commitments (continued)

	b)	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 (former director), 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.

	c)	In January 2011, the Company entered into a new office lease, which commenced on April 1, 2011 until March 31, 2016. Leasehold improvements of $71,747 (Cdn$69,494) received from the landloard as tenant inducements are repayable in full should the Company terminate the lease early without the consent of the landlord. The minimum rent from April 1, 2011 to May 31, 2011 is $6,323 (Cdn$6,193) per month, from June 1, 2011 to September 30, 2013 is $7,815 (Cdn$7,654) per month and from October 1, 2013 to March 31, 2016 will be $8,102 (Cdn$7,935) per month. The Company’s future minimum lease payments under the existing leases entered into during the year are as follows:

Three months ending November 30, 2011	$	23,445 (Cdn$22,962)
Fiscal year ending November 30, 2012		93,780 (Cdn$91,848)
Fiscal year ending November 30, 2013		94,354 (Cdn$92,410)
Fiscal year ending November 30, 2014		97,223 (Cdn$95,220)
Fiscal year ending November 30, 2015		97,223 (Cdn$95,220)
Fiscal year ending November 30, 2016		32,408 (Cdn$31,740)
	$	438,433 (Cdn$429,400)

	d)	On November 26, 2010, the Company entered into three year equipment lease that expires on November 30, 2013. The lease payment for the first 35 months will be $2,553 (Cdn$2,500) and the last month will be $1,645 (Cdn$1,611). The lease is secured by the leased equipment.

	e)	On April 1, 2011, the Company entered into 1 year consulting agreement in which the Company will issue shares of the Company’s common stock equal in value to Cdn$6,000 plus GST at the average price over the immediate 20 preceding days payable on the 20^thof each month, for an aggregate maximum of 6,000,000 shares of common stock if the consulting services are provided for the full term of this agreement.

18.	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. Long-lived assets by geographical segment as of August 31, 2011 and November 30, 2010 are as follows:

		Canada		United States		Total
As of August 31, 2011
Mineral properties and rights		-		1,759,522		1,759,522
Property and equipment		123,444		417,630		541,074
	$	123,444	$	2,177,152	$	2,300,596

As of November 30, 2010
Mineral properties and rights		-		1,600,442		1,600,442
Property and equipment		7,676		486,740		494,416
	$	7,676	$	2,087,182	$	2,094,858

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

19.	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 nine months ended August 31, 2011 and 2010 is as follow:

	Nine Months Ended
	August 31,
	2011	2010
	$	$
Changes in non-cash financing and investing activities:
Common stock issued on conversion of convertible debentures	109,852	-
Mineral claims royalty payable changes at period-end for mineral rights	60,000	80,000
Convertible debenture issued on repayment of accounts payable	34,852	-
Tenant inducement	66,923	-

20.	Fair Value Measurements

	ASC 820, Fair Value Measurements and Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.

Level 2

Level 2 applies to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer, credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity.

Pursuant to ASC 825, cash is based on "Level 1" inputs and due to related parties, promissory notes and convertible debt are valued based on “Level 2” inputs, consisting of model driven valuations. The Company believes that the recorded values of these financial instruments, other receivables and accounts payable approximate their current fair values because of their nature, respective relatively short durations or current market rates for similar financial instruments.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

20.	Fair Value Measurements (continued)

	Assets measured at fair value on a recurring basis were presented on the Company’s consolidated balance sheet as of August 31, 2011, as follows.

Fair Value Measurements Using

Quoted Prices in

Significant

Active Markets

Other

Significant

For Identical

Observable

Unobservable

Balance as of

Instruments

Inputs

August 31,

(Level 1)

(Level 2)

(Level 3)

2011

Assets:

Cash

501

–

501

As at August 31, 2011, there were no liabilities measured at fair value on a recurring basis presented on the Company’s consolidated balance sheet.

21.	Subsequent Events

	a)	On September 1, 2011, the Company received loans in the amount of $16,000 which are unsecured, bear interest at 8% per annum and are due on demand.

	b)	On September 12, 2011, the Company received a loan in the amount of $20,000 which is unsecured, bears interest at 8% per annum and is due on demand.

	c)	On September 28, 2011, the Company received a loan in the amount of $10,000 which is unsecured, bears interest at 8% per annum and is due on demand.

	d)	On October 14, 2011, the Company received a loan in the amount of Cdn$4,745 from the spouse of the President of the Company. The amount is due on demand, unsecured, and non-interest bearing.

	e)	On October 20, 2011, the Company received a loan in the amount of $5,000 which is unsecured, bears interest at 8% per annum and is due on demand.

22.	Restatement

	During the year ended November 30, 2010, the Company identified an error relating to the accounting for the convertible debt described in Note 8(a) in its financial statements included in the Company’s Form 10-K filed with the SEC on March 12, 2010. The Company had previously separately accounted for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on the Company’s non-convertible borrowing cost at the issuance date. The value attributed to the conversion feature of the convertible note was included in additional paid-in capital on the consolidated balance sheet. Debt issuance costs of $7,500 and shares issued with the convertible debt valued at $80,000 were expensed in the statement of operations. After further review, the Company has determined that the proceeds should have been allocated based on the relative fair values of the convertible note and the shares at time of issuance, the resulting beneficial conversion of the convertible note recorded in additional paid-in capital, and debt issuance costs capitalized as deferred charges and amortized over the term of the convertible debt.

	The Company also identified an error related to the accounting for the convertible debt described in Note 8(a)(i) in its financial statements included in the Company’s Form 10-Q filed with the SEC on October 20, 2010. The Company had previously separately accounted for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on the Company’s non-convertible borrowing cost at the issuance date. The value attributed to the conversion feature of the convertible note was included in additional paid-in capital on the consolidated balance sheet. After further review, the Company has determined that the conversion option should be separated from the host contract and accounted for as a derivative at time of issuance, the conversion feature classified as liability and measured at fair value with changes in fair value recorded in the statement of operations.

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

22.	Restatement (continued)

	The Company also identified an error related to the accounting for the convertible debt described in Note 8(a)(ii) in its financial statements included in the Company’s Form 10-Q filed with the SEC on October 20, 2010. The Company had previously separately accounted for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on the Company’s non-convertible borrowing cost at the issuance date. The value attributed to the conversion feature of the convertible note was included in additional paid-in capital on the consolidated balance sheet. Origination fee of $5,000 paid to the note holder and shares issued with the convertible debt valued at $61,100 were expensed in the statement of operations. After further review, the Company has determined that the proceeds should have been allocated based on the relative fair values of the convertible note and the shares at time of issuance, the resulting beneficial conversion of the convertible note recorded in additional paid-in capital, and origination fee recorded as a reduction to the proceeds received by the Company.

	The Company also identified an error related to the accounting for the convertible debts described in Note 8(a)(iii) in its financial statements included in the Company’s Form 10-Q filed with the SEC on October 20, 2010. The Company had previously separately accounted for the liability and equity components of convertible debentures to reflect the fair value of the liability component based on the Company’s non-convertible borrowing cost at the issuance date. The value attributed to the conversion feature of the convertible note was included in additional paid-in capital on the consolidated balance sheet. Origination fee of $15,000 paid to the note holders were recorded as a reduction to the proceeds received by the Company. Shares issued to the note holders valued at $135,000 were expensed in the statement of operations. After further review, the Company has determined that the proceeds should have been allocated based on the relative fair values of the convertible note and the shares at time of issuance, and the resulting beneficial conversion of the convertible note recorded in additional paid-in capital.

	The following table reflects the adjustment and restated amounts:

	For the Three Months Ended August 31, 2010
	As Reported			Adjustment		As Restated
Consolidated Statement of Operations	$			$		$
Operating expenses
Amortization of debt issuance costs	270,738		a), c)	(267,975	)	2,763

Total operating expenses	854,020			(267,975	)	586,045

Accretion of discount on convertible and promissory debentures	20,004		b)	48,891		68,895
Other interest expenses and bank charges	(50,358	)	c)	61,100		10,742
Penalty on convertible debt	–		d)	75,000		75,000
Loss on fair value of derivative liability	–		e)	38,583		38,583

Net Loss	823,666			(44,401	)	779,265

SILVERADO GOLD MINES LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of August 31, 2011 (Unaudited)

(Stated in United States Dollars)

22.	Restatement (continued)

	For the Nine Months Ended August 31, 2010
	As Reported		Adjustment		As Restated
Consolidated Statement of Operations	$		$		$
Operating expenses
Amortization of debt issuance costs	271,100	a), c)	(264,275	)	6,825

Total operating expenses	2,917,997		(264,275	)	2,653,722


Accretion of discount on convertible and promissory debentures	40,714	b)	122,802		163,516
Penalty on convertible debt		d)	75,000		75,000
Loss on fair value of derivative liability	–	e)	100,026		100,026

Net Loss	2,997,914		33,553		3,031,467

a)	To amortize debt issuance costs.

b)	To record accretion of discount on convertible debts.

c)	To reverse fair value of shares expensed at the time of issuance of convertible debt.

d)	To reclassify penalty on convertible debt.

e)	To recognized change in fair value of derivative liability as at August 31, 2010.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.

Our unaudited financial statements are stated in U.S. dollars and are prepared in accordance with generally accepted accounting principles in the United States. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise indicated, the terms "we", "us", "our" and "our company" mean Silverado Gold Mines Ltd. a British Columbia, Canada corporation and our wholly owned subsidiaries, Silverado Gold Mines Inc. and Silverado Green Fuel Inc., unless otherwise indicated.

Overview

Silverado Gold Mines Ltd. is a corporation organized under the laws of British Columbia, Canada. Our company was originally incorporated in June 1963. Our company operates in the United States through its wholly owned subsidiaries, Silverado Gold Mines Inc., (incorporated August 29, 1981) and Silverado Green Fuel Inc. (incorporated August 14, 2006). We filed a transition application and notice of articles with the British Columbia Registrar of Companies on April 20, 2004 in order to replace our former memorandum adopted under the British Columbia Company Act and to alter our current articles to the extent necessary to ensure compliance with the British Columbia Business Corporations Act.

Our exploration activities have been managed and conducted by affiliated companies, Tri-Con Mining Ltd. (“Tri-Con”) and Tri-Con Mining Inc., pursuant to written operating agreements. Each of Tri-Con and Tri-Con Mining Inc. are privately-owned corporations controlled by Garry L. Anselmo, who is our president, chief executive officer, and the chairman of our board of directors.

Our 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 in the development of a liquid fuel derived from low-rank coal through its other wholly-owned subsidiary, Silverado Green Fuel, Inc.

Our 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, we decided to focus our 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, our company’s primary focus is the exploration and development of our Nolan Gold Project and our Hammond Project located 175 miles north of Fairbanks, Alaska. We are also continuing with exploration activities on our Eagle Creek Property and our Ester Dome Project, which are both located in the Fairbanks Mining District.

Our company has also been working on the development of low-rank coal-water fuel (“Green Fuel”), a non-toxic liquid fuel product derived from sub-bituminous and lignite coal. In its finished form, the fuel is a non-toxic, non-hazardous environmentally friendly strategic (liquid) fuel. Silverado Green Fuel Inc. is seeking financing to enable us to proceed with the construction of a commercial demonstration facility designed to document the combustion characteristics of Green Fuel. A successful demonstration project could lead to construction of a commercial production facility to manufacture the low-rank coal-water fuel as a replacement fuel for oil fired boilers and utility generators.

Summary of Mineral Exploration Program and Plan of Operation

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

1)	Nolan Gold Project;
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 August 31, 2011, 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 Nolan Gold Project has been the focus of our company’s exploration strategy since 2007 and will be the focus again in 2011. Although a lack of sufficient capital did not allow for the permitted 1,000 cubic yard bulk sample under Workman’s Bench in 2010, our company plans to continue exploration drilling for the purpose of defining additional mineral resources associated with the Solomon Shear Zone.

Following the 2009 drill program at Nolan Creek, we determined that a larger core drilling rig will be needed in order to move forward with drilling in 2011. The current company owned drill rig is limited to less than 500 feet of drilling. Any additional drilling beyond the current resource blocks will require larger and more powerful drills that can drill over 1,000 feet.

Our plan of operations for the next twelve months are as follows:

Nolan Gold Project

Our company owns a 100 percent interest in numerous mining claims on the Nolan Creek Project. As of August 31, 2011, our 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. There has been no legal survey on any of the claims.

Under our company’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.

Based on a preliminary feasibility analysis of January 1, 2009, as amended June 1, 2009, we have economically viable reserves on our properties that comprise the Nolan Gold Project, subject to a final feasibility study. We plan to carry out activities on the Nolan Gold Project. The objective of the activities on the Nolan Gold Project is to complete permitting, drill, and continue underground development and bulk sampling and processing.

Our exploration plans are to further define lode gold and antimony resources. The program includes drilling and trenching, as well as the review of geological and geophysical data. Our proposed drilling program for 2011 will be aimed at lode gold and antimony exploration. Lode drilling will focus on Pringle Bench, Workman’s Bench and the Hillside 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.

If we can raise the necessary capital, we plan to spend up to $10,000,000 in the next twelve months in carrying out our exploration, permitting and development activities for the Nolan Gold Project. Of this amount, $3,600,000 is projected for lode drilling on the Solomon Shear Zone. The actual amount that we spend on exploration will depend on the actual amount of funds that we have available for exploration. We are presently seeking to obtain sufficient financing to enable us to proceed with these plans.

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.

Our company leases 24 federal placer mining claims and 36 federal lode mining claims from Alaska Mining Company, Inc. (“Alminco”). As of August 31, 2011, we were in arrears of required mineral property claims and option payments of $590,000 and therefore our rights to the property were adversely affected. We are currently re-negotiating the terms and conditions of the Alminco agreement with 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, when business conditions permit; however there is no assurance that we will be able to successfully renegotiate the terms and conditions of the Alminco agreement.

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.

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 the descendant of Arley Taylor (deceased), to purchase a 100% interest in the property for $400,000, of which $38,000 remains to be paid. The amount of $5,000 per year is required to be paid to keep the agreement in good standing. 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.

During 2011, we plan to move forward with an exploration program which will include both trenching and diamond core drilling. The majority of the permits required for the proposed exploration program have been approved. If funding permits, our company will design a drilling program to further investigate the gold mineralization associated with the mineralized structures known as vein-faults.

A commercially viable economic mineral deposit has not been defined on the property, and there is no assurance that a commercially viable economic mineral deposit exists on the property. Any proposed exploration program that includes drilling is dependent on available capital and there is no assurance that we will be able to initiate such a program.

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. Our wholly owned subsidiary, 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. There are three separate agreements covering these 53 claims on the Ester Dome property.

During 2011, we plan to move forward with the closure of the Grant Mill Tailings Pond. This pond is filled to capacity, and will be capped and decommissioned after a final approval of the tailings pond closure plan is received from State of Alaska regulatory agencies. A meaningful exploration program may be completed during the summer months to explore for and identify small high-grade gold anomalies as well as larger low-grade gold anomalies. Completing the 2011 exploration work plan will be contingent on available funding.

Low-Rank Coal-Water Fuel Project

Our 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 in 2011. 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 Green Fuel project.

Liquidity and Capital Resources

Our current ratio (current assets divided by current liabilities) as of August 31, 2011 was 0.05 as compared to 0.16 as of November 30, 2010. This ratio is commonly used as a measure of a company’s liquidity. We look at actual dollars in analyzing our liquidity. Since our company’s cash inflow has been generated mainly from sales of shares of our company’s common stock, gold sale proceeds earned during the exploration stage, debentures and loans, it will be very difficult for our 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.

					Change between
	At		At		August 31, 2011
	August 31,		November 30,		and November 30 ,
	2011		2010		2010
	($)		($)		($)
Current Assets	136,995		388,976		(251,981	)
Current Liabilities	3,049,324		2,410,510		638,814
Working Capital/(Deficit)	(2,912,329	)	(2,021,534	)	(890,795	)

As of August 31, 2011, we had a working capital deficit of $2,912,329 as compared to a working capital deficit of $2,021,534 as of November 30, 2010. We had $501 cash on hand as of August 31, 2011 as compared to $66,267 cash on hand as of November 30, 2010. Our company’s total assets for such periods were $2,447,000 (November 30, 2010: $2,484,000) and the total current assets were $137,000 (November 30, 2010: $389,000).

As of August 31, 2011, our company’s current assets consist of $501 (November 30, 2010: $66,267) in cash, $nil (November 30, 2010: $6,316) in gold inventory and $136,494 (November 30, 2010: $316,393) in prepaid and other receivables. Included in prepaid and other receivables were non-cash prepaid consulting and other fees of $95,105 (November 30, 2010: $271,193) paid through issuances of our company’s common stock under our company’s equity compensation plans.

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

Our company’s mineral rights have a carrying value at $1,759,000 as of August 31, 2011 as compared to $1,600,000 as of November 30, 2010, an increase of $159,000 or 10%. The increase in the value of our mineral rights this past nine months is directly attributable to $94,000 in claim fees payment, $5,000 in royalty payment $60,000 in an accrued royalty payment. The net book value of our fixed assets was $541,000 as of August 31, 2011 as compared to $494,000 as of November 30, 2010, an increase of approximately $47,000 or 10%. The increase in the net book value of our fixed assets was due to improvements made on the newly leased office.

The total liabilities as of August 31, 2011 were $3,691,000 as compared to $2,976,000 as of November 30, 2010, an increase of approximately $715,000 or 24%. Included in current liabilities are $680,000 (November 30, 2010: $872,000) due to related parties, which has been classified as operating activities in our company’s cash flow statements, and $1,150,000 (November 30, 2010: $916,000) of accounts payable and accrued liabilities.

Our company has not yet generated significant 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 nine months ended August 31, 2011, we raised $432,000 of net proceeds through completed private placements of which $78,000 was received from uncompleted private placement subscriptions in fiscal year ended November 30, 2010. We also received $108,947 through warrants exercise, of which $104,453 is included in common stock subscribed. During the fiscal year ended November 30, 2010, we raised $594,000 of net proceeds through completed private placements of which $100,000 was received from uncompleted private placement subscriptions in the fiscal year ended November 30, 2009.

During the nine months ended August 31, 2011, our company incurred $65,000 (2010: $85,000) on mineral rights and $212,000 (2010: $347,000) on the mineral exploration and drilling program.

In addition, our company has spent $1,822,000 (2010: $2,307,000) on other operating activities. Our 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 2011. We will also need to raise and spend approximately $3,000,000 on general and administrative costs during fiscal year 2011.

We are currently seeking capital to place the Nolan mine into the development and production phase.

Our 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 our company to complete the exploration and development of its mineral properties is dependent on our company’s ability to obtain the necessary financing. There is no assurance that we will be able to raise the financing necessary to enable us to implement our business plan.

Segment Information

Our company operates in one reportable segment, located in United States, being the acquisition and exploration of mineral properties. Our 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 our company and its subsidiaries registered and performed exploration and administration activities. A summary of financial information by geographical areas is as follows:

		Canada		United States		Total
As of August 31, 2011
Mineral properties and rights		-		1,759,522		1,759,522
Property and equipment		123,444		417,630		541,074
	$	123,444	$	2,177,152	$	2,300,596

As of November 30, 2010
Mineral properties and rights		-		1,600,442		1,600,442
Property and equipment		7,676		486,740		494,416
	$	7,676	$	2,087,182	$	2,094,858

For the Nine Months Ended August 31, 2011
Total net loss and comprehensive loss	$	2,029,838	$	322,322	$	2,352,160

For the Nine Months Ended August 31, 2010
Total net loss and comprehensive loss	$	2,467,882	$	563,582	$	3,031,467

Results of Operations – Nine months ended August 31, 2011 and 2010

Our company has not generated significant revenues since recommencement of the exploration stage from December 1, 2001 to August 31, 2011. For the nine months ended August 31, 2011, we reported a net loss of $2,352,000, or $0.001 per share, compared to a net loss of $3,031,000, or $0.002 per share for the same period ended August 31, 2010, a decrease of approximately 22%.

The major decreases in nine months ended August 31, 2011, as compared to the same period in 2010, were our company’s exploration expenses by $135,000, advertising and promotion expenses by $11,000, consulting fees by $90,000, depreciation expense by $85,000, legal and other professional fees by $179,000, office expense by $71,000, its related party charges in excess of cost by $9,000, management fees by $5,000 reporting and investor relations by $80,000 and transfer agent and filing fees by $11,000. These decreases were mainly due to cash limitations and the development of a restructuring plan that our company is working on to fund its exploration and development activities.

The major increase included in the net loss for nine months ended August 31, 2011, as compared to the same period in 2010, was increase of $81,000 for accounting and auditing fees. Such increase was mainly due to the hiring of external accountants for the preparation of the Company’s filings.

Results of Operations – Three months ended August 31, 2011 and 2010

Our company has not generated significant revenues since recommencement of the exploration stage from December 1, 2001 to August 31, 2011. For the three months ended August 31, 2011, we reported a net loss of $398,000, or $0.0001 per share, compared to a net loss of $779,000, or $0.0004 per share for the same period ended August 31, 2010, a decrease of approximately 49%.

The major decreases in three months ended August 31, 2011, as compared to the same period in 2010, were our company’s accounting and auditing fees by $9,000, consulting fees by $261,000, exploration expenses by $36,000, legal and other professional fees by $16,000, management fees by $13,000, office expenses by $15,000, transfer agent and filing fees by $13,000, and reporting and investor relations by $5,000. These decreases were mainly due to cash limitations and the development of a restructuring plan that our company is working on to fund its exploration and development activities.

The major increase included in the net loss for three months ended August 31, 2011, as compared to the same period in 2010, was increase of $25,000 for related party charges in excess of costs. Such increase was mainly due to the Company’s efforts relating to restructuring, development and expansion.

Related Party Transactions

The details of related party transactions are disclosed in footnote 11 of our company’s interim unaudited consolidated financial statements for the fiscal quarter ended August 31, 2011 (Item 1, above).

Critical Accounting Policies

Basis of Presentation and Principles of Consolidation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries, Silverado Gold Mines Inc. and Silverado Green Fuel Inc. All inter-company transactions and balances have been eliminated. Our company’s fiscal year-end is November 30.

Interim Financial Statements

The interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with our company’s audited financial statements and notes thereto for the year ended November 30, 2010, included in our company’s Annual Report on Form 10-K filed on March 15, 2011, with the SEC.

The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company's financial position at August 31, 2011, and the results of its operations and cash flows for the interim periods ended August 31, 2011 and 2010. The results of operations for the three months and nine months ended August 31, 2011 are not necessarily indicative of the results to be expected for future quarters or the full year.

Use of Estimates

The preparation of these consolidated statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. Our company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation, deferred income tax asset valuations, asset retirement obligations, financial instrument valuations, and loss contingencies. Our company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

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. Our company places its cash and cash equivalents with high quality financial institutions which our company believes limits credit risks.

Property and Equipment

Property and equipment are recorded at cost and are depreciated 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

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 ASC 820, must maximize the use of observable inputs and minimize the use of unobservable inputs.

Our 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 values of cash, other receivables, accounts payable, mineral claims royalty payable, promissory notes, and due to related parties approximate fair values because of the short-term maturity of these instruments. The carrying amount reported in the balance sheet for convertible debt approximates fair value based on current market rates for similar financial instruments. Unless otherwise noted, it is management’s opinion that our company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Gold Inventory

Our company values its gold inventories at the lower of cost or market. Since our company is still in the exploration stage, by definition, our company’s direct and absorbed costs would exceed the market value of any gold recovery. Therefore, our 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.

Revenue Recognition

Proceeds from the sale of gold recoveries from test mining are recorded as other income earned during the exploration stage. Our company recognizes revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.

Mineral Property Costs

Our company has been in the exploration stage since its inception and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mineral properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. Our company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at each fiscal quarter end. 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, will be capitalized. Such costs will be amortized using the units-of-production method over the estimated recoverable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Asset Retirement Obligation

Our company records asset retirement obligations in accordance with 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. 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, our company will recognize a gain or loss on settlement.

Foreign Currency Translation

The functional and reporting currency of our company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 830, Foreign Currency Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. Our company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Comprehensive Loss

ASC 220, Comprehensive Income establishes standards for the reporting and display of other comprehensive loss and its components in the consolidated financial statements. As at August 31, 2011 and 2010, our company has no items that represent other comprehensive loss and, therefore, has not included a schedule of other comprehensive loss in the financial statements.

Long-lived Assets

In accordance with ASC 360, Property Plant and Equipment our company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Stock-based Compensation

Our company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation, and ASC 505-50, Equity-Based Payments to Non-Employees using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Basic and Diluted Net Loss Per Share

Our company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Shares underlying these securities totalled approximately 303,938,525 as of August 31, 2011.

Debt Issuance Costs

Our company recognizes debt issue costs on the balance sheet when incurred, and amortizes the balance over the term of the related debt.

Income Taxes

Our company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Reclassifications

Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the current period’s presentation.

Recently Issued and Adopted Accounting Pronouncements

In June 2011, ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the update requires certain disclosure requirements when reporting other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income must be reclassified to income. The update is effective for the Company’s fiscal year beginning January 1, 2012. The Company does not expect the updated guidance to have an impact on its consolidated financial position, results of operations or cash flows.

In May 2011, ASC guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in level 3 of the fair value hierarchy. The update is effective for the Company’s fiscal year beginning January 1, 2012. The Company does not expect the updated guidance to have a significant impact on its consolidated financial position, results of operations or cash flows.

Our company has implemented all other new accounting pronouncements that are in effect and that may impact its financial statements 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.

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended August 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Removed and Reserved

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit	Description
Number
(3)	(i) Articles of Incorporation; (ii) By-laws
3.1	Articles of Incorporation (Incorporated by reference to our Registration Statement on Form 10 filed on August 11, 1984, as amended).
3.2	Amendment to Articles of Incorporation (Incorporated by reference to our Quarterly Report on Form 10-Q filed on July 15, 1997).
3.3	Altered Memorandum (Incorporated by reference to our Current Report on Form 8-K filed on September 11, 2002).
3.4	Amendment to Articles of Incorporation (Incorporated by reference to our Current Report on Form 8-K filed on June 13, 2003).
(4)	Instruments Defining the Rights of Security Holders , Including Indentures
4.1	Share certificate representing common shares of the capital of our company (Incorporated by reference to our Registration Statement on Form 10 filed on August 11, 1984, as amended).
(10)	Material Contracts
10.1	Agreement for Conditional Purchase and Sale of Mining Property between our company and Roger C. Burggraf dated October 6, 1978 – Grant Mine Property (Incorporated by reference to our Registration Statement on Form 10 filed on August 11, 1984, as amended)
10.2	Agreement for Conditional Purchase and Sale of Mining Property between our company and Paul Barelka, Donald August and Mark Thoennes dated August 12, 1979 – St. Paul Property (Incorporated by reference to our Registration Statement on Form 10 filed on August 11, 1984, as amended)
10.3	Lease of Mining Claims with Option to Purchase between our company and Alaska Mining Company, Inc. dated February 3, 1995 – Hammond Property (Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended November 30, 1995).
10.4	Change of Control Agreement between our company and Garry L. Anselmo dated August, 1995 (Incorporated by reference to our Annual Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on February 28, 2003).
10.5	Amendment to Change of Control Agreement between our company and Garry L. Anselmo (Incorporated by reference to our Annual Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on February 28, 2003).
10.6	Operating Agreement between our company and Tri-Con Mining Ltd. Dated January 1, 1997 (Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended November 30, 1996).
10.7	Operating Agreement between our company and Tri-Con Mining Inc. dated January 1, 1997 (Incorporated by reference to our Annual Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on February 28, 2003).
10.8	Operating Agreement between our company and Tri-Con Mining Alaska Inc. dated January 1, 1997 (Incorporated by reference to our Annual Report on Form 10-KSB for the fiscal year ended November 30, 2002 filed on February 28, 2003).
10.9	Form of Warrant Exercise Agreement between our company and certain of the selling security holders (Incorporated by reference to our Registration Statement on Form SB-2 filed on August 19, 2004).
10.10	Form of Delay Agreement between our company and certain of the Selling Shareholders (Incorporated by reference to our Registration Statement on Form SB-2 filed on August 19, 2004).
10.11	2006 Stock Option Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on April 11, 2006) .
10.12	2006-II Stock Option Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on March 31, 2006).

Exhibit	Description
Number
10.13	2007 Stock Option Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on February 20, 2007).
10.14	Shared Well Agreement between the Company and Sukakpak, Inc., dated August 17, 2007 (Incorporated by reference to our Annual Report on Form 10-KSB for the fiscal year ended November 30, 2007 filed on February 28, 2008).
10.15	2007-1 Equity Compensation Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on September 7, 2007).
10.16	Lease Agreement between the Company and TA Properties (Canada) Ltd., dated March 30, 2007 (Incorporated by reference to our Quarterly Report on Form 10-QSB filed on July 15, 2008).
10.17	Indemnity Agreements between the Company and Garry L. Anselmo, Stuart C. McCulloch, and James F. Dixon, each dated October 27, 2008 (Incorporated by reference to our Current Report on Form 8-K filed on October 29, 2008).
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 (Incorporated by reference to our Current Report on Form 8-K filed on December 23, 2009).
10.19	2009 Equity Compensation Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on January 29, 2009).
10.20	2009-II Equity Compensation Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on June 1, 2009).
10.21	Equity Line of Credit Agreement between the Company and Ashborne Finance Ltd. (Incorporated by reference to our Current Report on Form 8-K filed on August 12, 2009).
10.22	Consulting Agreement between the Company and 1315781 Ontario Inc. (Incorporated by reference to our Quarterly Report on Form 10-Q filed on October 15, 2009).
10.23	Note Purchase Agreement between the Company and St. George Investments, LLC. (Incorporated by reference to our Current Report on Form 8-K filed on January 28, 2010).
10.24	2009-III Equity Compensation Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on December 16, 2009).
10.25	2010-I Equity Compensation Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on June 9, 2010).
10.26	2010-II Equity Compensation Plan (Incorporated by reference to our Registration Statement on Form S-8 filed on December 2, 2010).
(14)	Code of Ethics
14.1	Code of Ethics (Incorporated by reference to our Quarterly Report on Form 10-QSB filed on July 15, 2004).
(21)	Subsidiaries of the Registrant
21.1	Silverado Gold Mines Inc.
	Silverado Green Fuel Inc.
(31)	Rule 13a-14(a)/15d-14(a) Certifications
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)	Section 1350 Certifications
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

* Filed herewith.

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: October 21, 2011	/s/ Garry L. Anselmo
	Garry L. Anselmo
	Chairman of the Board, President, Chief Executive Officer
	(Principal Executive Officer)


DATE: October 21, 2011	/s/ Donald Balletto
	Donald Balletto
	Chief Financial Officer and Director
	(Principal Financial Officer and Principal Accounting
	Officer)

SILVERADO GOLD MINES LTD 10-Q