In addition to owning several very promising gold properties in Alaska, it is also leading the pack in the race for a fuel to solve the problem of US dependence on foreign oil.

Through its wholly owned subsidiary, Silverado Green Fuel Inc., it possesses a formula for converting coal (of which the US has an abundance), into liquid fuel, or 'Green Fuel'. Not only does this fuel replace conventional crude oil, but this 'Green Fuel' is so-called because it is environmentally friendly.

A deal was finalized

A few weeks ago Silverado signed a memorandum of understanding, with the state of Mississippi to build a $26,000,000 prototype plant which will be the first plant in the USA capable of converting low-rank coal into liquid fuel. The process is called LRCWF (Low-rank coal-water fuel). Mississippi will pay half of the cost involved, and Silverado will provide the other half. This pilot project, to be located on 14 acres in Choctaw County, Mississippi, is designed to utilize the state's vast supply of low-rank coal reserves by converting them into Green Fuel, a fuel that is free from sulphur, heavy metals and particulate matter. There are a number of very attractive features to this Green Fuel:

• The cost of production is less than $15 a barrel.
• During production of the product there is a sizeable reduction of greenhouse gasses into the atmosphere.
• An abundant supply of coal is available in Mississippi and other Gulf states, as well as in Wyoming, the Great Plains, and Alaska. This pilot plant will provide thousands of gallons of Silverado's Green Fuel for tests in end-users operations and will provide scale-up design engineering, as well as validate operation in oil-designated boilers and advanced power systems.

The facility will also serve as a personnel training and development center in the production of Silverado's Green Fuel, and will create new fuels as well as permit the testing of engines with alterations made to accept the new clean burning fuel. Once operational, the company has the option to buy the facility from the state for a token $100

The future is here, now!

Green Fuel is a stable liquid fuel which provides a non-hazardous, low cost alternative to petroleum derived fuels that can use existing oil infrastructure for handling, storage and transportation. To produce Silverado's Green Fuel, low-rank coal is pulverized and then hydrothermally (hot water) treated through a proprietary process. The water that is removed from the coal during the hydrothermal process is then treated, reduced and added back to the coal particles, producing Green Fuel.

In response to requests made by several Senators and Congressmen, Silverado has submitted technical data on its Green Fuel hydrothermal treatment process to the Department of Energy and the Department of Defense, regarding the inclusion of Silverado's Green Fuel in the D.o.D.'s Clean Fuel Initiative. D.o.D. scientist working on the C.F.I. have examined Silverado's Green Fuel and have commented that they are impressed with both the technology and the possibility of using this alternative energy product as a raw feedstock for the production of synthetic fuels. The LRCWF process is presently the only known method of converting high-moisture content coal into a low-cost liquid fuel.

It is no secret that the 2007 Democrat controlled House and Senate are interested in moving the USA away from its dependence on Middle-East oil. The move to develop alternate fuels, that was started by the Bush administration, can be expected to gain momentum, and Silverado is in the right place at the right time.

The Next Step

Now that a prototype plant is in the planning stages of being built, the next step will be the designing, permitting and building of a commercial facility, capable of producing a minimum of 1,000,000 barrels of energy per year. America has an abundance of coal in the ground, estimated to last at least 300 years, so that by using this Green Fuel technology, the US can, over time, become totally independent of foreign oil, while similarly reducing the cost of producing this new fuel, compared to the current high cost of petroleum.

The Future is Bright!

Negotiations are currently underway with 3 other states that have shown an interest in the process developed by Silverado. CEO Garry Anselmo has appeared before House and Senate committees to explain to the legislators, the many benefits of Green Fuel. The fuel created at the Mississippi pilot plant will show the rest of the country that this is the best solution to America's energy crisis. The fuel created at this plant can easily be further refined into gasoline, jet fuel, diesel fuel and fertilizers. The future is bright indeed!

Breaking News!

U.S Senator Jim Bunning has just introduced legislation, co-sponsored by Senator Obama that will encourage the building of at least 10 coal-to-liquid-fuel plants. This bill enables the Department of Energy to provide loan guarantees for construction and direct loans for the planning and permitting of CTLF plants. Loan guarantees will encourage private investment and planning loans will help to prepare companies for the construction of plants.

The Senator mentions in the bill that South Africa already uses the CTLF method for 30% of its energy needs. To read the entire speech, visit www.Google.com, type in 'Senator Jim Bunning', click 'search', and the speech is on the Senator's home page.

The trend has been up since November 2006. The current correction is happening on declining volume (arrow). This is bullish. The 50DMA (blue line), is on course for a positive crossover above the 200DMA (red line). The 200DMA is still falling, but with all the positive news that is happening, I expect the price to rise and for the 200DMA to resume its uptrend. It's always nice to be able to buy near the 200DMA, and buying below it may prove to be even better.

Gold in Alaska

The second positive feature of Silverado is the Nolan Gold Deposit. Located 260 miles north of Fairbanks, it lends itself to surface mining of gold-bearing gravel in the summer months, and below ground drilling and mining the area's shear systems, where gold has been located, in the cold winter months. Most of the gold found near the surface at Nolan is in nugget form. One nugget recovered at Nolan weighed 41.35 ounces and sold for many times its melt value.

Silverado has been mining nuggets for years, and has a unique marketing plan. They supply the nuggets to local jewelers who mount these nuggets in jewelry and sell the jewelry to the tourists who flock to Alaska, and who are always searching for a unique souvenir. These Alaska gold nuggets are available in a great many jewelry stores across the state. This innovative method allows Silverado to obtain a 33% premium over the bullion price for its gold!

In addition, this method is an excellent public relations accomplishment. The people who buy the gold jewelry read on the accompanying brochure about the Silverado mine. Over $10,000,000 worth of nugget jewelry has thus far been purchased by tourists. When these people return to their homes, they as well as their friends and relatives, being already familiar with the product may well decide to invest in the mining company that made the gold jewelry possible. This kind of advertising cannot be bought! Test work on the company's Grant Gold Mine at Ester Dome near Fairbanks also successfully saw the mining, poring and sale of $10,000,000 in hi-grade gold bullion bars.

There is more!

During the latter half of 2006 Silverado has been drilling at the Nolan Gold site, especially in the areas where placer gold has been located in abundance. At present some 350,000 ounces of gold have been delineated for processing. The recent drilling is intended to add to these resources, and to allow underground mining to add to the gold that is being mined near the surface. Results from this drilling program were released Jan 4th 2007, and they are very good! (See the release on the company website for details).

Mining Experience is Vital

CEO Garry Anselmo brings 46 years of mining experience into the picture, and in addition has surrounded himself with a team of people with a considerable mining and business experience, including excellent interaction with Alaska government officials.

The team operates under 11 different state and federal permits, and the company practices responsible mining stewardship, so as not to disturb the pristine Alaskan environment.

In addition to the Nolan Gold Deposit the company also owns the Ester Dome Gold project, as well as the Eagle Creek project, both of which are located close to Fairbanks, and are part of the same gold belt, where Kinross is operating its huge Fort Knox Gold Mine. Ore processed at Eagle Creek would be an ideal candidate for processing at the nearby Fort Knox Gold Mine.

The Future

During past gold bull markets some remarkable stock price increases occurred. Between 1975 and 1980, while gold bullion rose from $150.00 to $850.00, a few penny mining stocks made millionaires out of investors who got in early and held on.

• Bankeno rose from 0.40c to 560.00
• Warf Resources from 0.40 to 4350.00
• Steep Rock from 0.93c to 440.00
• Mineral Resources from 0.60 to 415.00
• Azure Resources from .05c to 109.00
• Lion Mines from .05c to 380.00

The secret is finding an asset with lots of hidden gold, buying shares early, and hanging on for the ride. Silverado not only has the gold, but it has a revolutionary Green Fuel company as well.

Silverado qualifies for RRSP's - IRA's

Canadian investors are permitted to include Silverado shares in their RRSP, because the shares trade on the Frankfurt Stock Exchange in Germany. Therefore shareholders can include shares of Silverado in their Canadian tax planning strategy.

U.S. Investors have been able to include Silverado in their IRA's all along.

Summary: The Gold price has been spooked by a drop in the price of oil, as well as by a rally in the US dollar. Neither of these two developments actually have anything to do with the price of Gold!

Gold will continue to rise on its own bullish fundamentals, and due to the increasing demand for oil, and the depleting supplies, Green Fuel is a solution whose day has come!

Some Vitals

Current market cap (fully diluted), based on .09c/share is $75,000,000.00. The 52 week high and low are 0.22c and 0.045c.

Between January 2002 and the present, over 2.5 billion shares have traded, making this a stock with excellent liquidity. The stock symbols are SLGLF, NASDAQ-BB, SLGL, Frankfurt and SLGL Berlin.

Websites: www.silverado.com and www.silveradogreenfuel.com
Info: pr@silveradogreenfuel.com
(604)-689-1935 (800)-665-4646

January 11, 2007

DISCLAIMER:
Please do your own diligence, I am not responsible for your trading decisions.

Peter Degraaf is a successful on-line trader who sends out occasional E-mail alerts. He offers a 60 day free trial. He also sends out a free E-mail message to people who are confused by some of the terms used. It is called: Explaining the terminology. Contact him at itiswell@cogeco.ca