Silverado’s 100%-owned Nolan Placer Gold Mine is located 280 miles north of Fairbanks, Alaska in the historic Koyukuk Mining District. Since the discovery of placer deposits in the Nolan Creek/Hammond River area in 1897, recorded gold production totals almost 200,000 ounces. The largest portion of this production stems from Nolan Creek and its tributaries and benches, ground now owned by Silverado Gold Mines Ltd. The Company has also optioned property that covers the adjoining Hammond River placer deposits.

OPERATIONS

Under Silverado’s ownership since 1982, 19,430 ounces of placer gold were 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, a premium of 212%. Most nuggets produced at Nolan Valley are suitable for jewelry and sell at an average premium of 66%. Including recovered gold dust, the Company’s sales on its total gold production has averaged 33% over gold price.

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

In 2005 the Company began underground mining on the Swede Channel. Mine development and limited mining, construction of a 420 yard per 22 hour day washing sluice plant, the building of a two year ore pad, settling ponds, roads, water lines, and other support facilities, and the processing of some 9000 yards of gold bearing gravel was completed by March, 2006 and yielded 939 ounces of gold, 785 of that being high premium nugget gold.

Only about 30% of the Swede ore zone was removed in 2005/06 and the balance of ore along with newly discovered ore in an extension to the zone will be mined and processed during 2006/07. Another area, Mary’s East, is defined and is also being readied for production. Drilling throughout the winter is expected to expand these gold bearing zones and better define other zones which have already been located.

NOLAN LODE – SEEKING THE SOURCE

While developing and test mining the Nolan Placer Gold deposits, Silverado has collected information and conducted surveys directed to identifying the lode sources for the placer gold. These “lode” sources are the actual areas where gold forms within spaces in rocks and fissures, and forms “ore-zones”. Ore is rock or gold bearing gravel which is profitable to mine.

Some gold recovered from placer test mining operations is still attached to quartz and other lode deposit materials; some is crystalline in nature, and some shows evidence of formation next to the wallrock of a vein. Also, recent work has disclosed gold and antimony mineralized rock exposures located uphill from the mining areas which are yielding our gold nuggets. The discovery of high grade gold (source of 41 ounce nuggets) is now a function of methodical work on the five mile long mineralized Solomon Shear Trend. The Company is successfully exploring for the lode source of the nugget gold and is locating and examining source material systems. We expect to encounter many such gold enriched areas.

Included in our work to pinpoint high-grade lode gold ore bodies, is a project by Silverado personnel entailing compilation of airborne geophysical survey data published by the State of Alaska which is being interpreted in conjunction with on-going ground geological, geophysical, and geochemical surveys. The cumulative data indicates that a resistivity low trend (electromagnetically conductive zone) over five miles in total length is present uphill from the known placer deposits. This area has been called the “Solomon’s Shear Trend” and exists within our 11 square mile Nolan Property.

Geophysical features like Solomon’s Shear Trend may be caused by faults, veins or shear zones, by conductive lithologies or by combinations of these features. Geochemical soil sampling has shown above average values of gold and its companion metals, arsenic and antimony, coincident with the “Solomon’s Shear Trend” resistivity low. In the middle and along the southern portion of this trend there are a number of lode vein occurrences containing gold, arsenic and antimony.

This trend is the target of current high-grade lode exploration for the source of the abundant and unusually large placer gold found on the Nolan Property.