UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:May 31, 2008
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ____
Commission File Number0-12132
SILVERADO GOLD MINES LTD.
(NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
British Columbia, Canada | 98-0045034 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1111 West Georgia Street, Suite 1820, | |
Vancouver, British Columbia, Canada | V6E 4M3 |
(Address of principal executive offices) | (Zip Code) |
Issuer's telephone number:(800) 665-4646
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Number of shares outstanding as of July 15, 2008: 926,270,430 common shares.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
1
SILVERADO GOLD MINES LTD. |
(An Exploration Stage Company) |
INDEX |
Quarterly Period Ended May 31, 2008 |
Page | |||
PART I | FINANCIAL INFORMATION | ||
ITEM 1 | |||
Condensed Consolidated Balance Sheets as of May 31, 2008 (unaudited) and November 30, 2007 | 3 | ||
Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the three and six months ended May 31, 2008 and 2007, and for the period from December 1, 2001 (Recommencement of Exploration Stage) through May 31, 2008 (unaudited) | 4 | ||
Condensed Consolidated Statements of Cash Flows for the six months ended May 31, 2008 and 2007, and for the period from December 1, 2001 (Recommencement of Exploration Stage) through May 31, 2008 (unaudited) | 5 | ||
Notes to the Condensed Consolidated Financial Statements as of May 31, 2008 (unaudited) | 6 | ||
ITEM 2 | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION | 15 | |
ITEM 3 | CONTROLS AND PROCEDURES | 20 | |
PART II | OTHER INFORMATION | ||
ITEM 1 | LEGAL PROCEEDINGS | 21 | |
ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 21 | |
ITEM 3 | DEFAULTS UPON SENIOR SECURITIES | 21 | |
ITEM 4 | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 21 | |
ITEM 5 | OTHER INFORMATION | 21 | |
ITEM 6 | EXHIBITS | 22 | |
SIGNATURES | 24 |
2
PART I
FINANCIAL INFORMATION
ITEM 1. | FINANCIAL STATEMENTS |
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Stated In United States Dollars) |
May 31, 2008 | November 30, 2007 | |||||
(Unaudited) | (Audited) | |||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 709,139 | $ | 1,073,457 | ||
Gold inventory, net | 1,971,392 | 2,347,946 | ||||
Other receivables | 5,743 | 294,505 | ||||
Prepaid expenses | 79,497 | - | ||||
Total Current Assets | 2,765,771 | 3,715,908 | ||||
Property, plant and equipment, net | 2,065,120 | 2,158,379 | ||||
TOTAL ASSETS | $ | 4,830,891 | $ | 5,874,287 | ||
LIABILITIES | ||||||
Current Liabilities | ||||||
Accounts payable and accrued liabilities | $ | 216,383 | $ | 210,404 | ||
Mineral claims royalty payable | 390,000 | 360,000 | ||||
Due to related parties | 50,542 | 1,214,717 | ||||
Convertible debentures, current portion | 140,000 | 140,000 | ||||
Capital lease obligation, current portion | - | 31,013 | ||||
Total Current Liabilities | 796,925 | 1,956,134 | ||||
Asset retirement obligation | 542,337 | 529,311 | ||||
Total Liabilities | 1,339,262 | 2,485,445 | ||||
SHAREHOLDERS' EQUITY | ||||||
Common stock | ||||||
Authorized: | ||||||
unlimited common shares with no par value | ||||||
Issued and outstanding: | ||||||
926,270,430 common shares (2007:785,607,717) | 93,671,823 | 89,374,641 | ||||
Additional paid-in capital | 1,200,408 | 1,200,408 | ||||
Subscriptions received | - | 275,136 | ||||
Accumulated deficit during exploration stage | (91,380,602 | ) | (87,461,343 | ) | ||
Total Shareholders’ Equity | 3,491,629 | 3,388,842 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 4,830,891 | $ | 5,874,287 |
The accompanying notes are an integral part of these condensed consolidated financial statements
3
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER |
COMPREHENSIVE LOSS (UNAUDITED) |
(Stated In United States Dollars) |
Period Since | |||||||||||||||
Recommencement | |||||||||||||||
of Exploration | |||||||||||||||
Three Months Ended | Six Months Ended | Stage | |||||||||||||
May 31, 2008 | May 31, 2007 | May 31, 2008 | May 31, 2007 | December 1, 2001 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | to May 31, 2008 | |||||||||||
General and administrative expenses | |||||||||||||||
Accounting and audit | $ | 102,334 | $ | 41,904 | $ | 175,924 | $ | 54,135 | $ | 565,859 | |||||
Advertising, promotion and travel | 19,585 | 446,080 | 136,984 | 550,767 | 2,869,999 | ||||||||||
Consulting fees | 91,875 | 351,774 | 496,121 | 662,164 | 7,259,980 | ||||||||||
Depreciation, amortization, accretion and impairment | 60,358 | 31,278 | 164,917 | 93,228 | 2,390,428 | ||||||||||
Exploration expenses | |||||||||||||||
Six months: Net of gold proceeds of $372,915 (2007: $253,507) | |||||||||||||||
and inventory change of $376,554 (2007: $155,414) | 939,699 | 1,146,448 | 1,413,104 | 2,227,634 | 14,533,965 | ||||||||||
Financing activities | - | - | - | - | 302,003 | ||||||||||
Interest on capital lease obligations | 6,417 | 4,952 | 6,611 | 11,487 | 323,905 | ||||||||||
Interest on convertible debentures | 2,800 | 2,800 | 5,600 | 5,600 | 701,407 | ||||||||||
Legal | 67,020 | 64,284 | 103,791 | 106,045 | 815,206 | ||||||||||
Management services | 267,857 | 317,960 | 501,879 | 627,803 | 4,820,385 | ||||||||||
Office Expenses | 161,649 | 102,680 | 366,219 | 414,694 | 4,136,329 | ||||||||||
Other interest and bank charges | 4,023 | 3,489 | 7,965 | 6,584 | 55,437 | ||||||||||
Reporting and investor relations | 103,115 | 74,254 | 182,956 | 125,863 | 723,346 | ||||||||||
Research | 198,500 | 11,813 | 216,500 | 58,388 | 986,190 | ||||||||||
Stock-based compensation | - | - | - | 734,094 | 734,094 | ||||||||||
Transfer agent and filing fees | 9,523 | 17,953 | 30,994 | 27,864 | 242,474 | ||||||||||
Write-down of property, plant and equipment | - | - | - | - | 285,875 | ||||||||||
Write-off of mineral claim expenditures | - | - | - | - | 1,159,529 | ||||||||||
Total Expenses | 2,034,755 | 2,617,669 | 3,809,565 | 5,706,350 | 42,906,411 | ||||||||||
Loss from operations | (2,034,755 | ) | (2,617,669 | ) | (3,809,565 | ) | (5,706,350 | ) | (42,906,411 | ) | |||||
Interest and other income | 20,303 | 26,485 | 20,344 | 48,643 | 277,012 | ||||||||||
Cumulative effect of accounting change | - | - | - | - | (153,226 | ) | |||||||||
Other comprehensive (loss) income | |||||||||||||||
(Loss) / Gain on foreign exchange | (68,275 | ) | 271,024 | (130,038 | ) | 238,805 | 250,715 | ||||||||
Comprehensive loss for the period | $ | (2,082,727 | ) | $ | (2,320,160 | ) | $ | (3,919,259 | ) | $ | (5,418,902 | ) | $ | (42,531,910 | ) |
Net loss per share, basic and diluted | $ | (0.002 | ) | $ | (0.003 | ) | $ | (0.004 | ) | $ | (0.008 | ) | |||
Basic and diluted weighted average number | |||||||||||||||
of common shares outstanding | 926,270,430 | 677,808,737 | 884,945,283 | 656,904,280 |
The accompanying notes are an integral part of these condensed consolidated financial statements
4
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
(Stated In United States Dollars) |
Period Since | |||||||||
Recommencement | |||||||||
of Exploration | |||||||||
Six Months Ended | Stage | ||||||||
May 31, 2008 | May 31, 2007 | December 1, 2001 | |||||||
(Unaudited) | (Unaudited) | to May 31, 2008 | |||||||
CASH PROVIDED BY (USED FOR): | |||||||||
Operating activities: | |||||||||
Net loss for the period | $ | (3,919,259 | ) | $ | (5,418,902 | ) | $ | (42,531,910 | ) |
Adjustments to reconcile loss to net cash used in | |||||||||
operating activities: | |||||||||
Cumulative effect of accounting change | - | - | 153,226 | ||||||
Depreciation, amortization, accretion and impairment | 164,917 | 93,228 | 2,390,428 | ||||||
Stock-based compensation | - | 734,094 | 3,375,644 | ||||||
Stock issued for debenture | - | - | 217,687 | ||||||
Non-cash consulting and legal expense | 240,000 | 432,708 | 2,977,706 | ||||||
Non-cash financing expense | - | - | 252,003 | ||||||
Interest accrued | 5,600 | 5,600 | 491,970 | ||||||
Write-off of mineral claim expenditures | - | - | 1,159,529 | ||||||
Write-down of property, plant and equipment | - | - | 285,875 | ||||||
Changes in non-cash operating working capital: | |||||||||
Gold inventory | 376,554 | 155,414 | (1,960,252 | ) | |||||
Other receivables | 288,762 | (11,983 | ) | (2,868 | ) | ||||
Prepaid expense | (79,497 | ) | - | (79,497 | ) | ||||
Accounts payable and accrued liabilities | 379 | (41,609 | ) | (395,750 | ) | ||||
Asset retirement obligation | 13,026 | - | 13,026 | ||||||
Mineral claims royalty payable | 30,000 | 80,000 | 73,500 | ||||||
Net cash used in Operating activities | (2,879,518 | ) | (3,971,450 | ) | (33,579,683 | ) | |||
Investing activities: | |||||||||
Purchase of property, plant and equipment | (71,658 | ) | (870,866 | ) | (2,816,077 | ) | |||
Disposal of property, plant and equipment | - | - | 207,289 | ||||||
Net cash used in Investing activities | (71,658 | ) | (870,866 | ) | (2,608,788 | ) | |||
Financing activities: | |||||||||
Advances from related party | (1,164,175 | ) | 46,389 | (240,770 | ) | ||||
Repayment of loans payable | - | - | (35,729 | ) | |||||
Repayment of capital lease obligation | (31,013 | ) | (169,473 | ) | (1,131,607 | ) | |||
Repayment of convertible debentures | - | - | (74,999 | ) | |||||
Common stock issued for cash (net of share issue costs) | 3,782,046 | 3,719,126 | 38,363,622 | ||||||
Net cash provided by financing activities | 2,586,858 | 3,596,042 | 36,880,517 | ||||||
(Decrease) / increase in cash and cash equivalents | (364,318 | ) | (1,246,274 | ) | 692,046 | ||||
Cash and cash equivalents, at beginning of the period | 1,073,457 | 3,509,418 | 17,093 | ||||||
Cash and cash equivalents, at end of the period | $ | 709,139 | $ | 2,263,144 | $ | 709,139 | |||
Supplemental Cash Flow Information (Note 9) |
The accompanying notes are an integral part of these condensed consolidated financial statements
5
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 1 – Basis of Presentation, Recent Accounting Pronouncements and Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of Silverado Gold Mines Ltd. and its wholly-owned subsidiaries Silverado Gold Mines Inc. and Silverado Green Fuel Inc. (collectively “Silverado” or the “Company”). All significant inter-company transactions have been eliminated.
The unaudited condensed consolidated financial statements do not include all information and footnote disclosures required under United States generally accepted accounting principles. In management’s opinion, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of the financial position as of May 31, 2008, and the results of operations and cash flows for all periods presented, have been included. Readers of these financial statements should note that interim results for the periods presented are not necessarily indicative of the results that can be expected for the entire fiscal year as a whole.
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Silverado’s annual report on Form 10-KSB for the fiscal year ended November 30, 2007. Certain of the prior period’s figures in the statement of operations and cash flows have been reclassified to conform to the presentation adopted in the current period.
The Company considers its functional currency to be the U.S. dollar for its U.S. and Canadian operations. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollar at the rates of exchange in effect at the period-end. Non-monetary assets and revenue and expense transactions are translated at the rate in effect at the time at which the transactions took place. Foreign exchange gains and losses are included in the determination of results from operations for the periods as other comprehensive gains and losses.
Recent Accounting Pronouncements and Interpretations
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 160 “Non controlling Interests in Consolidated Financial Statements—an amendment of ARB No. 51”. This statement requires that the ownership interests in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company will adopt this statement on December 1, 2009.
In February 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 159, “Establishing the Fair Value Option for Financial Assets and Liabilities (“SFAS No. 159”). SFAS No. 159 was to permit all entities to choose to elect, at specified election dates, to measure eligible financial instruments at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date, and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with early adoption permitted for an equity that has also elected to apply the provisions of SFAS No. 157, “Fair Value Measurements”. An entity is prohibited from retrospectively applying SFAS No. 159, unless it chooses early adoption. SFAS No. 159 also applies to eligible items existing at November 15, 2007 (or early adoption date). The Company does not expect that SFAS No. 159 will have a material impact on the Company’s consolidated financial statements.
6
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 1 – Basis of Presentation, Recent Accounting Pronouncements and Significant Accounting Policies (Continued)
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“SFAS 157”), which provides expanded guidance for using fair value to measure assets and liabilities. SFAS 157 establishes a hierarchy for data used to value assets and liabilities, and requires additional disclosures about the extent to which a company measures assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and all interim periods within those fiscal years. However, in February 2008, the FASB issued Staff Position 157-2 which delays the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. For items within its scope, this Staff Position defers the effective date of SFAS 157 to fiscal years beginning after November 15, 2008. The Company is evaluating the potential impact of the adoption of this standard on the Company’s consolidated financial statements.
Income Taxes
The Company uses the assets and liability method of accounting for income taxes pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the assets and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or set.
Effective December 1, 2007, the Company adopted the provisions of the FASB Interpretation (“FIN”) No. 48,Accounting for Uncertainty in Income Taxes–an interpretation of FASB Statement No. 109. FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with SFAS No. 109,Accounting for Income Taxes. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Based on our review, there was no impact of FIN 48 on our financial position.
Gold Inventory
On average, the Company’s test production in past years has yielded gold dust and gold nuggets. Gold dust has brought a sales price 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 value than the spot price. They are valued according to weight, purity, character, and relative flatness. Historically, the Company’s gold nuggets have sold above the spot gold price.
The Company values its inventory using the gold spot price at the end of the reporting period. The Company regularly reviews the Company's gold inventory for potential decline in value and, if necessary, reduces inventory to its net realizable value when it is apparent that the expected realizable value falls below its carrying value. A reduction to gold inventory and a charge to exploration expenses is made when the estimated net realizable value of specific inventory declines below carrying value.
7
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 1 – Basis of Presentation, Recent Accounting Pronouncements and Significant Accounting Policies (Continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from these estimates.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, gold inventory, prepaid and other receivables, accounts payable and accrued liabilities, mineral claims royalty payable and payable to related party approximate fair value because of the short-term maturity of these instruments. The carrying amounts reported in the balance sheets for convertible debentures approximate their fair values as they bear interest at rates which approximate market rates. 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.
Note 2 – Related Party Transactions
The Company has related party transactions with Tri-Con Mining Ltd., Tri-Con Mining Inc., Tri-Con Mining Alaska Inc. (collectively “Tri-Con” or 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 field administrative and management services. Under the current contract dated January 1, 1997, work is charged at cost plus 25% for exploration and at cost plus 15% for development and mining services. Cost includes out of pocket or actual cost plus 15% charge for office and project overhead. 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.
Tri-Con’s services for the current fiscal year are focusing mainly on Silverado’s corporate planning and preparation for year-round operations and administration services. The aggregate amounts billed by Tri-Con each period include: services rendered by Tri-Con personnel and subcontractors working on Silverado projects, and disbursements incurred.
As of May 31, 2008, Silverado owed $50,542 (November 30, 2007: $1,214,717) to Tri-Con for exploration and administration services performed on behalf of Silverado.
The following is a summary of charges for Tri-Con services for the six months ended May 31, 2008 and 2007:
8
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 2 – Related Party Transactions (Continued)
May 31, 2008 | May 31, 2007 | ||||||
(Unaudited) | (Unaudited) | ||||||
Exploration Services | $ | 1,638,777 | $ | 2,179,484 | |||
Administration and management services | 540,863 | 627,803 | |||||
Research | - | 58,388 | |||||
$ | 2,179,640 | $ | 2,865,675 | ||||
Amount of total charges in excess of Tri-Con’s costs incurred | $ | 529,592 | $ | 555,772 | |||
Percentage of excess amount charged | 24.3% | 19.39% |
Note 3 – Basic and Diluted Loss per Share
Basic loss per share is computed by dividing the loss for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. Fully diluted amounts are not presented when the effects of the computations are anti-dilutive due to the losses incurred. Accordingly, there is no difference in the amounts presented for basic and diluted loss per share.
Note 4 – Gold Inventory
For the six months ended May 31, 2008, $372,915 (2007: $253,507) of net proceeds from sales of gold extracted during exploration and test mining are recorded as a reduction of exploration costs as the Company is in the exploration stage. In addition, the net change in the value of inventory as of May 31, 2008 of $376,554 (2007: $155,414) has been directly applied as a reduction of exploration costs. The following is a summary of gold inventory as at May 31, 2008:
Troy Ounces | Spot price | Balance | ||||||||
Gold Inventory | ||||||||||
Balance, November 30, 2007 | 2,996.74 | $ | 783.50 | $ | 2,347,946 | |||||
Gold sold during the six months ended | (564.46 | ) | ||||||||
May 31, 2008 | ||||||||||
Balance, at the spot price of May 31, 2008 | 2,432.28 | $ | 885.75 | $ | 2,154,392 | |||||
Valuation reserve | (183,000 | ) | ||||||||
Balance, May 31, 2008 | $ | 1,971,392 |
9
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 5 – Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation and amortization is provided on a straight line basis as follows:
Mining equipment | 10 years |
Auto and trucks | 5 years |
Computer software | 1 year |
Computer equipment | 3 years |
Leaseholds improvements | Duration of lease (5-7 years) |
Furniture and Fittings | 10 years |
Property, plant and equipment primarily include mining equipment and camp facilities at the Nolan Gold Project. Leasehold improvements are for both the Vancouver, BC and Fairbanks, AK offices. Assets currently in construction are segregated and will be reclassified as depreciable assets as soon as they are put into use. The following is a summary of property, plant and equipment as at May 31, 2008 and November 30, 2007:
May 31, 2008 | November 30, | |||||
(Unaudited) | 2007 | |||||
Offices | ||||||
Office leasehold improvements | $ | 597,557 | $ | 612,117 | ||
Computer Equipment and software | 133,995 | 105,797 | ||||
Furniture and Fittings | 394,358 | 394,358 | ||||
Mining Project | ||||||
Nolan Gold Project buildings | 63,000 | 63,000 | ||||
Leasehold improvements | 48,123 | 48,123 | ||||
Nolan mining equipment | 2,321,486 | 2,309,804 | ||||
Other equipment | - | 27,200 | ||||
Capital assets in construction | 55,538 | - | ||||
3,614,057 | 3,560,399 | |||||
Accumulated depreciation and amortization | (1,548,937 | ) | (1,402,020 | ) | ||
Net Book Value | $ | 2,065,120 | $ | 2,158,379 |
Note 6 – Debentures
On March 1, 2001, Silverado completed negotiations to restructure convertible debentures totaling $2,000,000. Replacement debentures totaling $2,564,400 were issued in consideration of cancellation of the original debentures plus all accrued interest to March 1, 2001. As of November 30, 2004 the replacement debentures were repaid in full.
Remaining original convertible debentures totaling $140,000 and accrued interest of $115,227 are in default; however, it is unclear whether they will be exchanged for replacement debentures as the Company has been unsuccessful in its extensive attempts to locate the holders.
10
SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 7 – Common Stock
During the six month period ended May 31, 2008, the Company completed private placements resulting in the issuance of an aggregate of 35,000,000 units at $0.03 per unit and 80,698,459 units at $0.0325 per unit. Each unit consists of one share of the Company’s restricted common stock and one half-warrant, with a full warrant (consisting of two half-warrants) being exercisable for a period of one year at a per share exercise price of $0.07. The Company received gross proceeds of $3,672,700 from such private placements, as well as $775,749 from the sale of restricted common stock through warrant exercises. The Company paid commission fees of $391,267, which was recorded as a reduction of common stock.
The following is a summary of the change in common stock for the six month period ended May 31, 2008 and for the fiscal year ended November 30, 2007:
Number of | Common Shares | |||||
Common Shares | Amount | |||||
Balance as of November 30, 2006 | 630,785,052 | $ | 82,538,598 | |||
Shares issued for cash: | ||||||
Private placement at $0.0321 per share | 59,166,669 | 1,900,000 | ||||
Private placement at $0.035 per share | 4,700,000 | 164,500 | ||||
Exercised share purchase warrants at $0.03 - $0.07 | 65,754,387 | 3,429,586 | ||||
Exercised stock options at $0.05 - $0.058 | 12,680,000 | 642,000 | ||||
Commissions paid | - | (408,458 | ) | |||
Shares issued for consulting fees at $0.07 - $0.1435 | 12,521,609 | 1,108,415 | ||||
Balance as of November 30, 2007 | 785,607,717 | 89,374,641 | ||||
Shares issued for cash: | ||||||
Private placement at $0.03 per share | 35,000,000 | 1,050,000 | ||||
Private placement at $0.0325 per share | 80,698,459 | 2,622,700 | ||||
Share purchase warrants exercised at $0.035, December 2007 | 16,513,024 | 577,956 | ||||
Share purchase warrants exercised at $0.035, January 2008 | 1,484,563 | 51,960 | ||||
Share purchase warrants exercised at $0.035, February 2008 | 4,166,667 | 145,833 | ||||
Commissions paid | - | (391,267 | ) | |||
Shares issued for consulting fees at $0.06, January 2008 | 500,000 | 30,000 | ||||
Shares issued for consulting fees at $0.10, February 2008 | 1,800,000 | 180,000 | ||||
Shares issued for consulting fees at $0.06, February 2008 | 500,000 | 30,000 | ||||
Balance as of May 31, 2008 | 926,270,430 | $ | 93,671,823 |
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SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 8 – Stock Options and Common Stock Purchase Warrants
(a) Stock Options
A summary of the change in stock options for the six month period ended May 31, 2008 and for the fiscal year ended November 30, 2007 is as follows:
Weighted | |||||||||
Outstanding and | Average | ||||||||
Exercisable | Weighted Average | Remaining | |||||||
Options | Excercise Price | Contractual Life | |||||||
Balance, November 30, 2006 | 63,180,000 | $ | 0.07 | 4.80 years | |||||
Options granted | 21,500,000 | 0.07 | |||||||
Options exercised | (12,180,000 | ) | 0.05 | ||||||
Options cancelled and expired | - | - | |||||||
Balance, November 30, 2007 | 72,500,000 | 0.06 | 4.43 years | ||||||
Options granted | - | - | |||||||
Options exercised | - | - | |||||||
Options cancelled and expired | (2,100,000 | ) | 0.11 | ||||||
Balance, May 31, 2008 | 70,400,000 | $ | 0.06 | 3.97 years |
The balance of outstanding and exercisable common stock options as at May 31, 2008 is as follows:
Number of Options | Remaining | ||||||
Outstanding and | Contractual Life | ||||||
Exercisable | Exercise Price | (Years) | |||||
500,000 | $ | 0.060 | 0.51 | ||||
50,000,000 | 0.050 | 0.51 - 4.60 | |||||
19,900,000 | 0.070 | 4.62 | |||||
70,400,000 |
(b) Common Stock Purchase Warrants
In November 2007, the Company reduced the exercise price of 16,513,024 of its common stock purchase warrants from $0.12 to $0.035 per common share, and such warrants were exercised in December 2007.
In December 2007, the Company reduced the exercise price of 990,001 of its common stock purchase warrants from $0.12 to $0.035 per common share and 495,001 of its common share purchase warrants from $0.06 to $0.035 per common share, of which a total of 1,484,563 were exercised in January 2008, and the remaining 439 warrants expired.
In December 2007, the Company reduced the exercise price of 4,166,667 of its common share purchase warrants from $0.10 to $0.035 per common share, and such warrants were exercised in February 2008.
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SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 8 – Stock Options and Common Stock Purchase Warrants (Continued)
(b) Common Stock Purchase Warrants (continued)
A summary of the change in common stock purchase warrants for the six month period ended May 31, 2008 and for the fiscal year ended November 30, 2007 is as follows:
Weighted | |||||||||
Average | |||||||||
Weighted | Remaining | ||||||||
Outstanding | Average | Contractual | |||||||
Warrants | Excercise Price | Life | |||||||
Balance, November 30, 2006 | 138,579,724 | $ | 0.098 | 0.83 years | |||||
Warrants issued | 29,583,335 | 0.100 | |||||||
Warrants exercised | (65,754,387 | ) | 0.085 | ||||||
Warrants expired | (40,395,669 | ) | 0.100 | ||||||
Balance, November 30, 2007 | 62,013,003 | 0.110 | 0.32 years | ||||||
Warrants issued | 57,849,234 | 0.070 | |||||||
Warrants exercised | (22,164,254 | ) | 0.035 | ||||||
Warrants expired | (14,432,081 | ) | 0.120 | ||||||
Balance, May 31, 2008 | 83,265,902 | $ | 0.079 | 0.55 years |
Note 9 – Supplemental Cash Flow Information
Six Months Ended | ||||||
May 31, 2008 | May 31, 2007 | |||||
Changes in non-cash financing and investing activities: | ||||||
Common shares issued for services | $ | 240,000 | $ | 432,708 | ||
Common shares issued for subscriptions received | 275,136 | 273,600 | ||||
Write-off equipment, cost | (18,000 | ) | - | |||
Write-off equipment, accumulated depreciation | 18,000 | - | ||||
Other cash flow information: | ||||||
Interest paid | $ | 8,521 | $ | 17,087 |
Note 10 – Commitments
a) | In March 2007, the Company entered into a new seven-year lease expiring August 2014 for its Vancouver, British Columbia office when obliged to vacate its previously leased location at the expiry of the lease. The annual lease commitment is as follows: |
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SILVERADO GOLD MINES LTD. AND ITS SUBSIDIARIES |
(An Exploration Stage Company) |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
as of May 31, 2008 |
(Stated In United States Dollars) |
Note 10 – Commitments (Continued)
Years ending November 30, 2008 – 2011 | $ | 432,887 | ||
Year ending November 30, 2012 | 125,664 | |||
Year ending November 30, 2013 | 128,439 | |||
Year ending November 30, 2014 | 74,923 | |||
$ | 761,913 |
b) | In December 2007, the Company entered into a lease purchase agreement to purchase mining equipment valued at $555,385. The agreement required payment of $55,538 upon execution (paid), and 36 equal monthly payments of $13,885 commencing upon delivery. The annual percentage rate implicit in the lease will be the rate prevailing at the time of delivery. |
Note 11 – Subsequent Events
a) | Subsequent to May 31, 2008, the Company sold gold inventory for net proceeds of $735,331. | |
b) | In May 2008, the Company received a Cease Trade Order (the “CTO”) from the British Columbia Securities Commission (“BCSC”). Pursuant to the CTO, the Executive Director of the BCSC ordered that trading in the securities of the Company cease in the province of British Columbia, Canada, until (i) the Company satisfies certain filing requirements in British Columbia that are specifically set forth in the CTO, and (ii) the Executive Director of the BCSC issues an order revoking the CTO. | |
The CTO affects only the trading of the Company’s securities in the province of British Columbia. The Company’s securities may still be traded outside of British Columbia. | ||
The Company and its legal counsel are currently working in cooperation with the BCSC to seek revocation of the CTO. |
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ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION |
FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-QSB 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
I. MINING
Silverado Gold Mines Ltd. and its wholly-owned subsidiaries Silverado Gold Mines Inc. and Silverado Green Fuel Inc. (collectively referred to herein interchangeably as the “Company” or “Silverado”) are engaged in the acquisition and exploration of mineral properties in the State of Alaska. Precious metals, primarily gold, and antimony are the main interests. Silverado has more than 35 years of experience in all aspects of the gold mining industry, from grass-roots exploration, to state of the art mining and processing technologies, for both lode and placer gold deposits. The primary focus is presently on the continued exploration of the Nolan Creek Property, located 175 air miles north of Fairbanks, Alaska, where plans include exploration for both placer and lode gold and antimony lode deposits at the Nolan Gold & Antimony Project. The exploration activities include lode diamond drilling and trenching, geochemical and geophysical surveys and test mining work carried out as part of Silverado’s exploration programs.
Silverado holds interests in four groups of mineral properties in Alaska, as listed below:
1) | Nolan Creek property |
2) | Hammond Property; |
3) | Eagle Creek Property; and |
4) | Ester Dome Property. |
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As an exploration stage company, all of the properties are presently in the exploration stage. Silverado does not have any commercially viable reserves on any of the properties, and there is no assurance that commercially viable mineral deposits exist on any of the mineral properties. Further exploration will be required before a final evaluation of the feasibility of commercial mining on any of the properties is determined. There is no assurance that further exploration will result in a final evaluation that determines a commercially viable mineral deposit exists on any of the mineral properties.
At the Nolan Creek Property, the nature of all deposits encountered to date are small (4,000 to 14,000 bank cubic yards) but high grade in nature. Although drill densities and exploration activities have resulted in the discovery and test mining of individual placer gold deposits, the Company has not yet identified a resource base sufficient for establishing annual production levels over a sustained period of time. Silverado mines the deposits, processes the gold bearing gravels and sells this gold even though the criteria for a proven reserve has not been met. The Company may continue with test mining of small placer gold deposits at the Nolan Creek property without establishing that the placer gold deposits contain sustainable and commercially viable mineral deposits. The Company is also drilling and developing a gold/antimony lode resource on the Workman’s Bench portion of the Nolan Creek Property.
II. LOW-RANK COAL WATER FUEL
Silverado has been working for six years through its subsidiary, Silverado Green Fuel Inc. on the development of low-rank coal water fuel (“LRCWF”), a non-toxic liquid fuel product derived from sub-bituminous and lignite coal. In its finished form, LRCWF is a non-toxic, non-hazardous environmentally friendly strategic liquid fuel. The Company’s primary focus is to perform bench-scale testing on Mississippi lignite coal. Bench-scale testing will, among other things, provide the Company with data that may result in the Company deciding to proceed with an independent financial analysis for building a production facility. There is no assurance that a full independent financial analysis will be completed or that a production facility will be constructed if at all.
PLAN OF OPERATIONS
Management’s plan of operation for the next six months is discussed below:
I. MINING
1. NOLAN CREEK PROPERTY - Lode and Placer Exploration
During the first three months of our fiscal year, exploration concentrated on the Workman’s Bench gold and antimony mineralized zones on our Nolan Property. During December 2007 and January 2008, the Company drove an exploration tunnel totaling 553 feet into the Workman's Bench mineralized zones to intersect the gold bearing antimony-quartz vein systems. During this first phase underground exploration program, numerous quartz and antimony-quartz veins were exposed. To date three main mineralized zones have been identified through the correlations between the underground observations with the drill intercepts from the 2007 Workman's Bench drilling program. The Workman's Bench mineralized zones have been confirmed over a strike length of 600 feet and are open laterally and at depth. During the second three months the Company enlarged its drill capacity to handle “NQ core” (i.e.. a larger and heavier drill core sample) to obtain a larger and more representative sample of the mineralized intercepts on the Workman’s Bench stibnite/gold mineralized zone. Gold and antimony grades will be released on completion of a National Instrument 43-101 technical report, which is currently being prepared for filing with the British Columbia Securities Commission and is expected to be filed within the third quarter of 2008. Further metallurgical beneficiation and microprobe tests are being performed on these samples to determine the crushing size necessary to liberate the stibnite from its
16
minor quartz constituent and to liberate native gold from the stibnite, the location of which was determined by polished section and thin section work.
The Company is currently operating under multi-year (2008 – 2010) Bureau of Land Management (“BLM”) approved “Plan of Operations” that authorizes the collection of a bulk sample of mineralized vein material. Work under this plan is anticipated to lead to the construction of an initial 150 ton/day gravity and water concentrator to process the bulk sample. Larger-scale year round operations are concurrently under planning and analysis, and preliminary discussions have begun with the BLM on this subject. Further, proposals for environmental background sampling waste rock acid-base accounting (“ABA”), and other lead permitting work is being solicited from qualified third-party consultants as part of the two to three-year effort to secure a revised BLM Plan of Operations that would enable the Company to place Nolan in a high rate of year round lode production.
There is no assurance that a commercially viable mineral deposit exists at this time on the Nolan Creek property. Further exploration will be required before a final evaluation as to the economic and legal feasibility of mining this property is determined. Although the results to date are extremely encouraging, at this point there is no assurance that further exploration will result in a determination that a commercially viable mineral deposit exists on the property. Towards that end, a preliminary assessment is being conducted on the Workman’s Bench portion of the property.
Further to the Company's geological, geochemical and geophysical discoveries from the 2007 exploration season, the Company is following-up exploration at the Nolan Creek gold/antimony lode properties and gold placer resource areas within the Nolan Creek Gold Project. This follow-up exploration program is further defining and assessing lode gold and antimony occurrences at the Nolan Creek Project. The Company’s follow-up lode exploration work is increasing our geological, geochemical and geophysical knowledge on the Solomon Shear Zone, the Fortress Zone, and other lode gold/antimony occurrences on the property, and is ascertaining whether or not they have economic potential.
Continued drilling is being conducted on the Workman's Bench portion of the Solomon Shear Zone to determine whether or not we can proceed with confidence to additional test mining, and eventually to commercial mining.
In the next six months, Silverado plans to spend the majority of its approximate $1,600,000 project budget for 2008 activities involved in Nolan Creek lode exploration. This work will concentrate on the continued drilling and assessment of the Workman’s Bench gold/antimony deposit with the intent to place it into test production as soon as possible. If present funds are insufficient to place this project into test production, additional funds would be needed to complete the project.
2. HAMMOND PROPERTY
Annual rentals have been paid to keep the mining claims in good standing.
This property will require additional funding to continue its development. At present there is no plan to work on this property. If funding is acquired, there is no guarantee that a commercial gold-bearing placer deposit will be developed. 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 guarantee that the deposit will be profitable to mine.
3. EAGLE CREEK PROPERTY
The Number One Vein on this property was the lode quartz gold structure that was historically mined commercially for antimony.
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Annual assessment work will be carried out on the property to keep the mining claims in good standing. Assessment work will be focused on the northwest part of the claim block, where drilling and trenching has defined an intrusive host rock, thought to be a sill, containing low grade gold, silver and antimony mineralization. Otherwise, no work is presently planned for this property.
The Company has determined it is appropriate to expend its funds for the foreseeable future on the Nolan Project as it presents the best opportunity to initiate steady cash returns.
4. ESTER DOME PROPERTY
Proposals are being solicited from qualified third-party consultants to engage in the engineering design of the closure of the former Grant Mine mill tailings pond. Contract award is anticipated to take place during the third quarter of this year and design work is expected to be completed by the close of the fall of 2008. This tailings pond, currently filled to capacity, will be capped and decommissioned after the final approval of the tailings pond closure plan is gained from local and state regulatory agencies.
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 the Company has determined it is appropriate to expend its funds for the foreseeable future on the Nolan Creek Project as it presents the best opportunity to initiate steady cash returns.
Further exploration will be required before a final evaluation as to the economic and legal feasibility of mining the Nolan Creek or any of Silverado’s properties is determined. There is no assurance that further exploration will result in a determination that a commercially viable mineral deposit exists on any of Silverado’s mineral properties.
II. LOW-RANK COAL WATER FUEL PROJECT
The Memorandum of Understanding (“MOU”) dated December 18, 2006 among Silverado Green Fuel Inc., the State of Mississippi as represented by the Mississippi Development Authority, Choctaw County Board of Supervisors, and the Choctaw County Economic Development District, remains in place. No steps have been taken to proceed with building the LRCWF demonstration facility contemplated under the MOU as the Company is not currently pursuing the construction of a demonstration facility. If the Company determines, upon completion of a successful independent financial analysis, that the construction of a commercial facility is viable, the Company may seek an extension of the MOU to discuss the construction of such a facility.
The Company has developed preliminary commercial models based on various assumptions and estimates for the construction of commercial production facilities and the cost of producing LRCWF using locally-mined coal purchased from third parties. Estimated production costs may vary significantly, as LRCWF production is dependent, among other factors, on coal quality, coal price and location of the proposed commercial facility.
Whether the Company proceeds with the construction of a commercial production facility is dependent on the completion of a successful financial analysis with respect to a particular location and utilizing a particular type of coal as an input. With respect to Mississippi lignite coal, the Company anticipates spending approximately US$300,000 during the current fiscal year on bench-scale testing. Bench-scale testing will, among other things, provide the Company with data that may result in the Company deciding to proceed with an independent financial analysis for building a production facility. There is no assurance that a full independent financial analysis will be completed.
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Upon the successful completion of an independent financial analysis, the Company may determine that construction of a commercial production facility would be economically viable. However, proceeding with the construction of such a facility will be dependent on several factors including (i) determining the size and location of the facility, (ii) acquiring land and transportation infrastructure, (iii) obtaining necessary permitting, (iv) obtaining a long term supply agreement for coal, and (v) obtaining sufficient financing. The Company's business venture into LRCWF is at a very early stage and is subject to a high degree of risk. There is no assurance that the Company will succeed in obtaining government or private funding for this project or that a commercial facility based on a particular financial analysis will be constructed at all. The Company may pursue other initiatives including joint ventures, divestiture and licensing/royalty arrangements.
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 would be considered material to investors.
CRITICAL ACCOUNTING POLICIES
Our critical accounting policies (the policies we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments) are outlined in our notes to the financial statements above.
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ITEM 3. | CONTROLS AND PROCEDURES |
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures and our internal control over financial reporting as of May 31, 2008. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Garry L. Anselmo. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures and our internal control over financial reporting are effective to ensure, among other things, that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated, recorded, processed, communicated, and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission.
The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
a) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; | |
b) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and | |
c) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
During the fiscal quarter ended May 31, 2008, there were no changes that had a material effect on, or are reasonably likely to affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1. | LEGAL PROCEEDINGS |
The Company is not a party to any pending legal proceeding, nor is the Company’s property the subject of any pending legal proceeding. The Company also is not aware of any proceeding that a governmental authority is contemplating.
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
The Company has not sold any unregistered securities during the period covered by this report other than those previously reported on a Current Report on Form 8-K and filed with the Securities and Exchange Commission.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
The Company is not currently in material default of indebtedness that exceeds 5% of its total assets.
ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
None.
ITEM 5. | OTHER INFORMATION |
None.
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ITEM 6. | EXHIBITS |
Number | Description of Exhibit |
3.1 | Articles of Incorporation of the Company (1) |
3.2 | Amendment to Articles of Incorporation of the Company (2) |
3.3 | Altered Memorandum of the Company (3) |
3.4 | Amendment to Articles of Incorporation of the Company (7) |
4.1 | Share certificate representing common shares of the capital of the Company (1) |
10.1 | Agreement for Conditional Purchase and Sale of Mining Property between the Company and Roger C. Burggraf dated October 6, 1978 – Grant Mine Property (1) |
10.2 | Agreement for Conditional Purchase and Sale of Mining Property between the Company and Paul Barelka, Donald May and Mark Thoennes dated May 12, 1979 – St. Paul Property (1) |
10.3 | Lease of Mining Claims with Option to Purchase between the Company and Alaska Mining Company, Inc. dated February 3, 1995 – Hammond Property (4) |
10.4 | Change of Control Agreement between the Company and Garry L. Anselmo dated May, 1995(6) |
10.5 | Change of Control Agreement between the Company and James Dixon dated May, 1995 (6) |
10.6 | Amendment to Change of Control Agreement between the Company and Garry L. Anselmo (6) |
10.7 | Operating Agreement between the Company and Tri-Con Mining Ltd. Dated January 1, 1997 (5) |
10.8 | Operating Agreement between the Company and Tri-Con Mining Inc. dated January 1, 1997 (6) |
10.9 | Operating Agreement between the Company and Tri-Con Mining Alaska Inc. dated January 1, 1997 (6) |
10.1 | Contract between the Company and Dr. Warrack Willson dated March 19, 2001 (6) |
10.11 | Equipment Lease Agreement between the Company and Airport Equipment Rentals Inc. dated October 11, 2002 (6) |
10.12 | Form of Warrant Exercise Agreement between the Company and certain of the selling security holders (8) |
10.13 | Form of Delay Agreement between the Company and certain of the Selling Shareholders (8) |
10.14 | 2006 Stock Option Plan (10) |
10.15 | 2006-II Stock Option Plan (11) |
10.16 | 2007 Stock Option Plan (12) |
10.17 | Shared Well Agreement between the Company and Sukakpak, Inc., dated May 17, 2007 (13) |
10.18 * | |
14.1 | Code of Ethics (9) |
31.1 * | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 * | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 * | |
32.2 * | |
(1) | Filed as an exhibit to the Company’s Registration Statement on Form 10 filed initially on May 11, 1984, as amended. |
(2) | Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q filed on July 15, 1997. |
(3) | Filed as an exhibit to the Company’s Current Report on Form 8-K filed on September 11, 2002. |
(4) | Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended |
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November 30, 1995. | |
(5) | Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 1996. |
(6) | Filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the year ended November 30, 2002 |
(7) | Filed as an exhibit to the Company’s Current Report on Form 8-K filed on June 13, 2003. |
(8) | Filed as an exhibit to the Company’s Registration Statement on Form SB-2 filed on May 19, 2004. |
(9) | Filed as an exhibit to the Company’s Quarterly Report on Form 10-QSB filed on July 15, 2004. |
(10) | Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on April 11, 2006. |
(11) | Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on March 31, 2006. |
(12) | Filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on February 20, 2007. |
(13) | Filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the year ended November 30, 2007 |
* | Filed herewith. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SILVERADO GOLD MINES LTD. | |
DATE: July 15, 2008 | /s/ Garry L. Anselmo |
Garry L. Anselmo | |
President, Chief Executive Officer (Principal | |
Executive Officer), and Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
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