The following is a discussion of the operating results and financial position of Silverado Gold Mines Ltd. ("Silverado" or the "Company") for the six months ended May 31, 2009. It should be read in conjunction with the Company's audited consolidated financial statements and footnotes for the fiscal year ended November 30, 2008 and the interim unaudited consolidated financial statements for the six-month period ended May 31, 2009.

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

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

The information in this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding Silverado's capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of gold, availability of funds, government regulations, common share prices, operating costs, capital costs, outcomes of gold recovery activities and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and gold recovery activities, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "seek", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "target", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports Silverado files with the Securities Exchange Commission (the "SEC"). These factors may cause actual results to differ materially from any forward-looking statement. Management disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

OVERVIEW

The Company is engaged in the acquisition and exploration of mineral properties in the State of Alaska, through its wholly-owned subsidiary, Silverado Gold Mines Inc., and is involved with a new environmentally friendly low-rank coal-water fuel ("LRCWF") technology through its other wholly-owned subsidiary, Silverado Green Fuel, Inc.

The Company has committed over three decades of work to the exploration, development and test mining of gold properties throughout North America. In the mid-1980s, the Company decided to focus its efforts in Alaska. We have extensive experience in geological, geochemical and geophysical exploration techniques. Our

The Company has been working for seven years through its LRCWF division on the development of LRCWF, a non-toxic liquid fuel product derived from sub-bituminous and lignite coal. In its finished form the fuel would be a non-toxic, non-hazardous environmentally friendly strategic (liquid) fuel. Silverado 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. In addition we look forward to our continued planning and progress designed to create a secondary fuel and other product facility designed to gasify and liquefy our green fuel to facilitate the creation of low cost rocket fuel, aviation fuel, gasoline, diesel fuel, synthetic natural gas, synthetic petrochemical feed-stocks, hydrogen for fuel cells, plastic, fertilizers, explosives, urea, ammonia CO2 for enhanced recovery in oil well production as well as a host of other products, all free of sulphur, heavy metals and particulate matter.

MINERAL EXPLORATION

The Company is a mineral exploration company with interests in properties located throughout the state of Alaska. The majority of such properties are in the early stages of exploration, and there is no assurance that a commercially viable mineral deposit exists on such properties.

The Company holds interests in four groups of mineral properties in Alaska, as listed below:

1) Nolan property

2) Hammond Property;

3) Eagle Creek Property; and

4) Ester Dome Property.

Overall mineral exploration performance during the six-month period ended May 31, 2009 and management's plan of operations for each property are discussed below.

Effective January 1, 2009, based on completion of a preliminary feasibility study by an independent and AIPG Certified Professional Geologist (the "QP"), our Nolan Gold and Antimony Lode Project has disclosed an economically viable mineral reserve. The preliminary feasibility study entitled, "Update of Mineral Resource and Reserve Estimates and Preliminary Feasibility Study, Workman's Bench Antimony-Gold Lode Deposit, Nolan Creek, Wiseman B-1 Quadrangle, Koyukuk Mining District, Northern Alaska, January 1, 2009" (the "Technical Report"), concluded that the resource estimates disclosed by the Company in its Current Report on Form 8-K filed with the SEC on November 17, 2008 can be reclassified as a probable reserve. Though there were no material changes to the grades and quantities previously reported on November 17, 2008, there was additional data produced that added new grades and there was further work conducted on this zone that resulted in the aforementioned reclassification.

The Economic Analysis Chapter (Section 18.9) was clarified by the QP in the amended Technical Report to include: 1) an explanation of metal price forecasts;
2) analysis of depreciation and sunken costs; 3) a review of the effect of variable interest rates on the economic model; and 4) multiple scenarios for the Base Cash Flow case study.

1. NOLAN GOLD AND ANTIMONY PROPERTY

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

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

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

As of May 31, 2009, Silverado's Nolan Gold Project consist of 204 unpatented, federal placer mining claims covering approximately 4,080 acres in three non-contiguous groups, and 407 unpatented federal lode mining claims covering approximately 8,140 acres in one large contiguous group. Many of the 407 lode mining claims are superimposed over the placer mining claims.

The plan of operation for the Nolan Gold Project for the 2009 fiscal year is the advancement toward the development and mining stage of our Nolan Gold and Antimony Project, especially along the southwestern end of the Solomon Shear Zone in the Workman's Bench Area. The Company is in a transitional phase between exploration and development. The preliminary feasibility study, effective January 1, 2009 and amended on June 1, 2009 to reflect additional data, supported a mineral reserve of antimony and gold underlying the southwestern portion of the Solomon Shear Zone, an area referred to by the Company as Workman's Bench. The study by the Company's QP concluded that the Nolan Gold and Antimony Project in the Workman's Bench area are economically viable. The results of the January 2009 preliminary feasibility study and the reserve estimates are disclosed in the Company's Annual Report on Form 10-KSB filed on March 16, 2009 and the Company's website: www.silverado.com.

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

The following table uses the term 'inferred resources'. Silverado advises U.S. investors that while this term is recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize this term. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

General Note Regarding Estimates

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

º Assumed Prices of US $700/oz for gold and US $2.25/lb for antimony.
º Process Recovery Rates of 85% for antimony and 90% for gold (as provided by Hazen Research from work done on an underground bulk sample from the D tunnel of the Workman's Bench A vein and using gravity and water recovery systems only).
º Estimated Operating Costs of US $375/ton, based on operation of a 92 ton per day underground mine.

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

Summary of Amended Inferred Antimony and Gold resources from 'A' and 'West'

                              Zones, Pringle Bench

 Category     Cut-Off Grade     Quantity      Grade        Metal          Grade          Metal
                 (% Sb)          (tons)       (% Sb)      (ton Sb)     (oz/ton Au)     (oz gold)
 'A' Vein          4.0            737         29.13        214.7          0.113          83.4
 Inferred
'West' Vein        4.0           1,951         9.86        192.3          0.049          94.7
 Inferred
  TOTALS           4.0           2,688        15.14        407.0          0.067          178.1

Notes:
-The effective date of these resources is January 1, 2009; amended June 1, 2009 -Rounding may result in some discrepancies.
-No processing recovery factors have been applied to these resource figures. -The unit ton refers to short tons.
-Cut-off grade is 4.0% Sb 'equivalent', which is the combined values of gold plus antimony expressed in terms of antimony

Resource Cut-off grade Quantity Grade Metal Grade Metal Category (% Sb) (ton) (% Sb) (ton Sb) (oz/ton Au) (oz Au) Inferred 4.0 24,077 12.45 2,997.6 0.245 5,894.7

Notes:
-The effective date of these resources is January 1, 2009; amended June 1, 2009. -Rounding may result in some discrepancies.
-No processing recovery factors have been applied to these resource figures. -The unit ton refers to short tons.
-Cut-off grade is 4.0% Sb 'equivalent', which is the combined values of gold plus antimony expressed in terms of antimony

During the six-month period ended May 31, 2009, the Company began implementing the recommendations of the preliminary feasibility study for the Workman's Bench gold and antimony deposit. The Company has procured supplies and equipment necessary for the summer drilling program at Nolan. Also, topographic surveying was done to establish elevations of the ground surface above the southwestern extent of the Workman's Bench antimony and gold mineralized zones. The new surface elevations were used to determine the vertical extension of the northeast striking antimony and gold mineralized zones. The Company compared the highest elevations of the 'A' zone intercepts from previous drill core data and determined the vertical extension of the vein zones that have not been explored by core drilling. The undrilled area is a target of 200 to 350 vertical feet (average of 270 feet) with a strike length that is at least 400 feet. The proposed drill sites were surveyed and staked, and the access routes to the drill sites were completed. In order to intercept these upper extensions of the mineralized zones, the drill sites had to be located on the hillside up above Workman's Bench on the opposite side of the shear zone. Thus, the drill azimuths will be 180 degrees opposite of previous years' drilling.

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

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

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

During the next six months, Silverado plans to expand the current lode exploration program by diamond core drilling in-fill holes along the southwest extent of the Workman's Bench antimony and gold deposit, for the potential upgrade of resources. The Company will focus a program designed to potentially upgrade inferred

During the next six months Silverado plans to initiate lode development in the Workman's Bench area as follows:

1. Continued aggressive permitting.
2. Additional infill drilling along strike of the gold and antimony mineralized Solomon Shear Zone for additional geological and geotechnical information and geochemical assays.
3. Baseline characterization studies for permitting purposes.
4. Acid and Base Accounting (ABA) for potential acid drainage issues.
5. Procurement of equipment and infrastructure upgrades needed for the underground extraction of a 1,000 cubic yard bulk sample.
6. Underground extraction of a bulk sample of antimony and gold ore for additional processing studies and assays.

In addition, the Company plans to do detailed mapping and channel sampling of the gold and arsenic mineralized veins that occur in outcrops in the Fortress prospect located along the north end of the property. Depending on time constraints and funding, the Company also plans to excavate trenches in a new prospect located 2,000 ft east of the Solomon Shear Zone. The excavated trenches will be mapped and channel sampled for potential mineralization. Also, the Company will continue trying to locate a local source of carbonate-bearing rock to be used for mitigation of potential Acid Rock Drainage.

Our proposed drilling program of a minimum of 35 shallow (200-500 ft) diamond core drill holes for 2009 has already commenced and is 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. Since the Project is advancing into the development stage, exploration drilling will not be conducted in the Fortress area which is part of a gold bearing east-west trending deformation zone.

We will be seeking to raise approximately $10,000,000 to carry out our exploration, permitting and development activities for the Nolan Gold Project. Of this amount, $1,000,000 would be put toward lode drilling and trenching 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.

On July 6, 2009, the Company engaged the services of D&D Securities Company as its investment banking firm for the purpose of raising capital for its ongoing operations.

2. HAMMOND PROPERTY

Our Hammond property is located approximately 8 miles north of Wiseman, and 175 air miles north of Fairbanks, Alaska in the foothills of the Brooks Range in an area known as the Koyukuk Mining District. The Hammond property is located approximately three miles northeast of the Nolan Gold Project.

The Company leases 24 federal placer mining claims and 36 federal lode mining claims from Alaska Mining Company, Inc. ("Alminco"). Alminco has confirmed that our mineral claims and options are in good standing on the understanding we will use our best efforts to pay the minimum royalty payments, including the payments that are in arrears for the past four years, when business conditions permit.

The encouraging drill results to date, the potential of extending the Slisco Channel to the southeast plus the possibility of discovering gold bearing tributary channels, make this a prospect for additional discoveries. This project will require additional funding. Even if funding is acquired, there is no assurance that a commercial gold bearing placer deposit will be developed. Even if a gold bearing deposit is developed, additional funding will be required to mine the deposit, and until a feasibility study is completed, there is no assurance that the deposit will be profitable to mine.

3. EAGLE CREEK PROPERTY

The Eagle Creek property is comprised of 77 Alaska state mineral claims. All claims are contiguous and are located in the Fairbanks North Star Borough. The total area of the claims equals approximately 3080 acres and all claims are valid. There has been no legal survey on the claims. Ownership of the claims is in the name of Silverado Gold Mines Inc. There is an "option to purchase" agreement with Arley Taylor (i.e., now with his descendants), to purchase a 100% interest in the property for $400,000, of which $48,000 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.

The Eagle Creek property is accessed by the Steese Highway, 10 miles north of Fairbanks, Alaska to Fox, Alaska, then traveling along the Elliot highway 6 miles north to Murphy Dome Road, then west along Murphy Dome Road about 5 miles to the property. The Number One Vein on this property was the lode quartz gold structure that was historically mined commercially for antimony.

Annual assessment work will be carried out on the property to keep the mining claims in good standing. Assessment work will be focused on the northwest part of the claim block, where drilling and trenching has defined an intrusive host rock, thought to be a sill, containing low grade gold, silver and antimony mineralization. If funding permits, the Company will design a drilling program to further investigate the gold and by-product mineral distribution of the intrusive and the Number One Vein system.

No funding has been advocated for the 2009 work plan. Whereas historic commercially viable mining took place on the Number One (or "Scrafford") Vein, and whereas Silverado has successfully drilled and hit significant widths of high-grade or massive stibnite (antimony sulfide) and significant widths with good gold grades, it has nonetheless yet to complete a definitive drilling program sufficient to indicate reserves, and therefore there is no assurance that a commercially viable economic mineral deposit exists on the property.

4. ESTER DOME PROPERTY

The Ester Dome property is comprised of 52 state mineral claims and 1 unpatented federal mineral claim. The claims are not all contiguous in that there are 5 separate blocks of claims. Silverado Gold Mines Inc. is the registered owner of all claims. The total area of all claims equals approximately 2.5 square miles and all claims are valid. There has been no legal survey on the claims.

Reclamation work to complete the closure of the Grant Mill Tailings Pond is in the permitting stages. The earthwork construction required to close the tailings pond requires permits issued by the Alaska Department of Environmental Conservation. The Company has commissioned a third party environmental and engineering firm to assist with the permitting process. A cost analysis of the tailings pond closure is under review by the Company and by a third party environmental and geotechnical engineering firm. The pond is filled to capacity, and will be capped and decommissioned after final approval of the tailings pond closure plan is received from State of Alaska regulatory agencies. There will be limited field work on the property during the summer of 2009. Field work will consist of small scale surveys and minor geochemical studies. Due to the current price of gold, the Company is considering whether to increase exploration efforts on the property.

Furthermore with respect to other areas on this property, several large scale projects have been proposed over the past ten years and remain warranted, but for the time being are deferred due to internal decisions that favor shifting financial and manpower resources to the Nolan Gold and Antimony Project.

If additional exploration results in defining other commercially viable mineral deposits, they are likely to be gold or antimony lode deposits, or placer gold deposits Currently the Company is focusing on the continued exploration and future development of the Nolan Gold and Antimony Project in northern Alaska. There is no assurance that further exploration will result in a final evaluation that a commercially viable mineral deposit exists on Silverado's mineral properties, excluding the Nolan Property.

LOW-RANK COAL WATER FUEL PROJECT

The Company commenced development of a low-rank coal-water fuel business in . . .