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FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1996.
Commission file number 0-12132
SILVERADO MINES LTD.
(Exact name of registrant as specified in its charter)
British Columbia, Canada 98-0045034
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
Suite 505, 1111 West Georgia Street
Vancouver, British Columbia, Canada V6E 4M3
(Address of Principal Executive Offices)
(604) 689-1535
(Registrant's telephone number)
Securities registered pursuant to section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common Shares, no par value
(Title of Class)
The Company's Common Stock trades on the NASDAQ Small Cap Market under the
trading symbol GOLDF
(Name of each exchange on which registered)
Indicate by check mark the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes |X| No |_|
Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|
The aggregate market value of voting stock held by non-affiliates on January 28,
1997 was $25,647,744.
The number of shares outstanding on January 28, 1997 was 58,556,493
Documents incorporated by Reference: The Company's Proxy Statement for the 1997
Annual Meeting of shareholders is incorporated by reference into Part III, Items
10, 11, 12, and 13.
2
PART I
ITEM 1
- ------
BUSINESS
(a) General Development of Business
Silverado Mines Ltd. ("Silverado" or the "Company"), is engaged in the
acquisition, exploration and development of mineral properties. Silverado was
incorporated under the laws of British Columbia, Canada, in June, 1963, and
operates in the United States through a wholly-owned subsidiary, Silverado Mines
(U.S.), Inc., incorporated in the State of Alaska in 1981.
Silverado's exploration and development activities are managed and conducted by
an affiliated company, Tri-Con Mining Ltd. ("Tri-Con") pursuant to an operating
agreement. Tri-Con is a privately owned corporation controlled by Garry L.
Anselmo, who is Chairman and a director of Silverado. During the fiscal year
ended November 30, 1996, Silverado had a single employee, its President, J.P.
Tangen. Subsequent to year end, Mr. Tangen relinquished his office to Mr.
Anselmo, who assumed the duty of President on an unpaid basis. Mr. Anselmo held
that office previously. Mr. Tangen retained his position as an unpaid director
of the Company.
The Company holds interests in six groups of mineral properties in Alaska and in
British Columbia, Canada. Silverado's main projects are exploration and
development of the Ester Dome Gold Project, located 10 miles northwest of
Fairbanks, Alaska, and development and production at the Nolan Gold Project,
located 175 miles north of Fairbanks, Alaska.
The Ester Dome Project comprises a contiguous group of 404 claims and 14
prospecting sites totaling 20 square miles, including the Grant Mine, the Range
Mineral Property, the St. Paul / Barelka Property and the Dobb's Property,
located in the Fairbanks Mining District, Alaska. The Company commenced drilling
on a number of gold anomalies late in 1994, and continued its drilling
activities on the property in 1995 and 1996.
The Nolan Gold Project consists of 209 Federal placer claims and 179 Federal
lode claims located eight miles west of Wiseman, Alaska. Included in the Project
are the Nolan Placer, Nolan Lode, Thompson's Pup, Dionne (Mary's Bench) and
Smith Creek properties. The Company commenced placer gold production from the
Dionne Property in November, 1993 and continued development and production from
this property through 1996.
The Hammond Property, consisting of 27 Federal placer and 36 Federal lode
claims, was acquired by the Company in December 1994 to increase potential
reserve development in conjunction with the Company's placer mining operations
on the adjoining Nolan Gold Project.
The Marshall Dome Property consists of 38 claims. It was acquired by the Company
in 1995 due to its proximity and similar geological setting to Newmont Mining
Company's "True North" gold property, immediately to the southwest. It covers an
area of two and one-half square miles, and is located eighteen miles northeast
of Fairbanks.
The Whiskey Gulch Property consisting of four claims, was acquired by the
Company in 1996 to further enhance its Marshall Dome Property by virtue of its
proximity to those claims.
The Chatanika Property represents 774 mining claims and 24 prospecting sites
newly staked by the Company in 1996. This property, approximately 20 miles
northwest of Fairbanks, covers a total area of 53.86 square miles.
The French Peak Property consists of four mineral claims totaling approximately
one square mile, located 40 miles northwest of Smithers, British Columbia.
(b) Financial Information Re: Industry Segments
The Company operates in one industry segment, mining.
3
(c) Plan of Operation
In response to increasing activity in the Fairbanks area, the Company has
accelerated its development plans for its gold deposits on Ester Dome based upon
data it has accumulated from the work of ACNC (American Copper and Nickel
Company, a previous joint-venture partner of Silverado) over four years and upon
Silverado's new work, presently in progress. It is Silverado's intention to
bring this property into production as soon as practical, at the Company's
discretion. The Company is currently seeking additional capital to continue its
efforts to develop this property, though presently there is no specific
commitment by any party to provide such additional capital.
The Company continued to mine some of the gold-bearing gravels from deposits
previously discovered on the Nolan Gold Project near Wiseman, Alaska. The
Company has recovered almost 14,000 ounces of gold from this project since 1994
and plans to continue its on-going process of reserve development, production
and reclamation.
Silverado, on August 4, 1989, assigned its Eagle Creek Property to Can-Ex
Resources (U.S.), Inc. for a retained net profits interest. Silverado retains a
$5 million royalty interest in this property.
In the Alaskan arctic, the Company plans to continue exploration of its Hammond
Property as funds become available; and in Canada, intends to keep its French
Peak Property in good standing.
Mining activities in the United States are subject to regulation and inspection
by the Mining, Safety and Health Administration of the United States Department
of Labor. In addition, Silverado's activities are regulated by a variety of
Federal, state, provincial and local laws and regulations relating to protection
of the environment. The operation of mining properties also requires a variety
of permits from governmental agencies. While there can be no assurance that in
the future environmental concerns will not lead to restrictions upon Silverado's
operations at one or more properties, Silverado believes it has obtained all
permits necessary for planned operations in 1997.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales
The following table sets out selected financial data for each of Silverado's
fiscal years ended November 30, 1996, 1995 and 1994, by country of origin for
information purposes only. For accounting purposes, however, the registrant has
only one reportable geographic segment.
YEAR ENDED NOVEMBER 30,
1996 1995 1994
----------- ----------- -----------
REVENUE (UNITED STATES) $ 298,124 $ 3,053,289 $ 1,515,762
Gold recoveries applied to
deferred exploration and development
Canada $ -- $ -- $ --
United States -- -- 143,250
----------- ----------- -----------
$ 298,124 $ 3,053,289 $ 1,659,012
=========== =========== ===========
Income (loss) for the year
Canada $(3,461,717) $(1,615,286) $(2,148,678)
United States (868,543) (2,479,270) (971,692)
----------- ----------- -----------
$(4,330,260) $(4,094,556) $(3,120,370)
=========== =========== ===========
END OF PERIOD
Identifiable assets
Canada $ 1,668,233 $ 777,156 $ 866,857
United States 17,143,111 14,362,432 15,629,596
----------- ----------- -----------
$18,811,344 $15,139,588 $16,496,453
=========== =========== ===========
For each of the three years ended November 30, 1996, 1995 and 1994, there have
been no transfers between geographic segments, nor have there been export sales.
4
ITEM 2
- ------
PROPERTIES
(A) Registrant's Interest
Silverado holds interests in mineral properties in the State of Alaska, and the
Province of British Columbia. During the year the Company continued production
on its Nolan Gold Project in northern Alaska, which began in 1994. The Company
continued development of gold deposits on its Ester Dome Project.
(B) General Character and Technical Description of Each Property
(1) ESTER DOME GOLD PROJECT
The Ester Dome Project encompasses all of Silverado's optioned properties on
Ester Dome, accessible by road, 10 miles northwest of Fairbanks, Alaska. These
properties are as follows:
(a) Grant Mine:
This property consists of 19 State mineral claims and 6 unpatented Federal
mineral claims subject to payments of 15% of net profits until $2,000,000
has been paid and 3% of net profits thereafter.
(b) Range Minerals #1:
This property consists of 6 State mineral claims subject to payments of 15%
of net profits until $1,500,000 has been paid and 2% of net profits
thereafter.
(c) Range Minerals #2:
This property consists of 233 State mineral claims subject to annual
payments of $30,000, 2% of net smelter returns until $20,000,000 has been
paid, and 5% of net profits thereafter.
(d) St. Paul / Barelka:
This gold property consists of 22 State mineral claims subject to payments
of 15% of net profits until $2,000,000 (inflation indexed from 1979) has
been paid and 3% of net profits thereafter.
(e) Dobb's:
This property consists of three unpatented Federal mineral claims subject
to payments of 15% of net profits until $1,500,000 has been paid and 3% of
the net profits thereafter.
(f) Other Claims:
A total of 113 additional State mineral claims, two Federal claims, and 14
prospecting sites have been located or acquired.
Project Summary
The above properties, totaling 20 square miles in area, cover most of Ester
Dome. The stream drainages from Ester Dome have yielded over 3,000,000 ounces of
placer gold. The Company's claims were located to acquire lode sources from
which this placer gold was derived. Lode gold has been discovered in veins,
shears, and disseminated into the country rock at a number of locations on the
properties.
The main thrust of Silverado's exploration and development work on Ester Dome
from 1978 to 1989 was on the Grant Mine area, including a Joint Venture (Grant
Mine Project) initiated in April, 1984 between Silverado and Aurex, Inc., a
subsidiary of Marubeni America Corporation, and a period of production by
Silverado from 1987 to 1989. The Joint Venture, with Tri-Con Mining, Inc. as
operator, explored and developed the O'Dea vein and constructed a gravity /
carbon-in-pulp mill. From 1978 to 1989, a total of 111,852 tons of ore were
processed, yielding 11,215 ounces of gold and 8,231 ounces of silver.
From June, 1990 to November, 1993 ACNC conducted exploration programs as
operator of the Ester Dome Joint Venture, including 45,162 feet of drilling. On
the O'Dea Shear, results from drilling by ACNC and prior results of Silverado's
work defined a body of gold ore estimated to contain 83,000 ounces at a grade of
0.31 oz. of gold per ton.
5
During 1996 the Company continued definition of the St. Paul ore zone by
completing over 8,000 feet of trenching and the first nine holes of a drilling
program.
(2) MARSHALL DOME PROPERTY
The Marshall Dome Gold Project was acquired by the Company in 1995. It covers an
area of two and one-half square miles, and is located eighteen miles northeast
of Fairbanks and is on the same geological trend as the True North gold deposit
one mile to the southwest, which is being developed by Newmont. On November 1,
1996, the Company entered into an agreement in principle to vend this property
to Homestake Mining Company in return for annual cash payments, annual
expenditures on the property, and the payment of a Net Smelter Return to the
Company in the event of the sale of gold or other valuable minerals; but that
agreement in principle has not yet been consummated
(3) WHISKEY GULCH PROPERTY
This property, acquired by the Company in 1996 to further enhance the
desirability of its previously acquired Marshall Dome Property is part of the
unconsummated agreement in principle with Homestake Mining. This property
immediately adjoins the True North property.
(4) CHATANIKA PROPERTY
This property was newly staked by the Company in 1996 in response to aerial and
ground anomalies which it observed. The property is located approximately 20
miles northwest of Fairbanks, and consists of 774 mining claims and 24
prospecting sites, with a total area of 53.86 square miles. The Company intends
to commence exploration of the property in 1997.
(5) NOLAN PLACER AND LODE CLAIMS
The Nolan Project consists of five contiguous properties covering approximately
6 square miles, 8 miles west of Wiseman, 175 miles north of Fairbanks, Alaska.
These properties are as follows:
(a) Nolan Placer:
This property consists of 152 unpatented Federal placer claims 100 percent
owned by Silverado.
(b) Thompson's Pup:
This property consists of 6 unpatented Federal placer claims, and is
subject to a royalty of 3 percent of net profits on 80% of production.
(c) Dionne (Mary's Bench):
This property, consisting of 15 unpatented Federal placer claims and
miscellaneous mining equipment, was purchased in 1993 for $1,000,000
payable over five years, with payments scheduled to be completed in 1997.
(d) Smith Creek:
This property, consisting of 36 unpatented Federal placer claims and
miscellaneous mining equipment, was purchased in 1993 for $200,000 payable
over five years with payments scheduled to be completed in 1998.
(e) Nolan Lode:
This property consists of 179 unpatented Federal lode claims 100 percent
owned by Silverado. The lode claims overlie much of the placer properties
and extend beyond them.
Project Summary
Production of placer gold from Nolan Creek and its tributaries originally
commenced in 1903. Silverado began acquiring claims in the area and developing
the placer gold deposits in 1979. Through 1988, Silverado and a lessee produced
2,400 ounces of gold nuggets.
Due to the angular nature and attachment to quartz of much of the placer gold
recovered, Silverado believes the lode source should be nearby and has staked
lode claims to cover the potential source areas. These claims are in an active
exploration stage, and quartz veins containing gold have been discovered in
place.
6
From 1990 to 1993, Silverado conducted reclamation, exploration and development
in preparation for commencement of production. Initially, production was carried
out on the Thompson's Pup property. Then, in November 1993, the Company
commenced production on the Dionne (Mary's Bench) Property. Gold bearing gravels
were mined by underground methods from a frozen bench deposit. Since the Winter
of 1994/95 almost 14,000 ounces of gold have been recovered by Silverado from
these sites, primarily in the form of high-quality nuggets which sell at premium
prices above "spot market".
(6) HAMMOND PROPERTY
The Hammond Property, consisting of 27 Federal placer claims and 36 Federal lode
claims covering one and one-half square miles, was acquired by the Company in
December 1994. The Company completed a drilling program in 1995 which identified
placer gold deposits similar to those on the adjoining Nolan Gold Project. The
lode claims also extended the area of interest for exploration for the lode
sources of the placer gold.
(7) EAGLE CREEK ROYALTY INTEREST
The Eagle Creek Property consists of 77 State mineral claims with a total area
of 4.8 square miles, located 11 miles north of Fairbanks, Alaska. The property
was formerly a producer of antimony and is situated in a 20 mile long belt of
lode and placer gold deposits. It is currently being explored as a gold
prospect.
Silverado acquired the property in 1976. From 1984 to 1988 Silverado explored
several geochemical / geophysical targets and discovered gold bearing veins and
disseminated gold mineralization of economic interest.
The property was assigned to Can-Ex Resources (U.S.), Inc. on August 4, 1989 for
a retained 15 percent net profits interest from production to a maximum of
$5,000,000.
(8) FRENCH PEAK PROPERTY
The French Peak property consists of four mineral claims totaling approximately
one square mile, located 40 miles northwest of Smithers, British Columbia.
The known mineralization consists of silver, gold, copper, lead and zinc in a
number of vein and bedded deposits. From one of these veins, a test shipment of
52.4 tons of hand-sorted ore was sent to a smelter and averaged 204 oz. silver
per ton.
Silverado acquired the property in 1976 and has conducted surface exploration,
including diamond drilling, to expand the known extent of the mineralization.
Several geochemical / geophysical targets remain to be tested.
The property is in an advanced exploration stage.
ITEM 3
- ------
LEGAL PROCEEDINGS
There are no material legal proceedings and to the best of management's
knowledge, no threatened legal actions, to which Silverado or its subsidiary is
a party or by which it or its properties may be encumbered.
ITEM 4
- ------
SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of security holders through the solicitation of proxies or
otherwise.
7
PART II
ITEM 5
- ------
MARKET PRICE FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
(a) Market Information
Silverado's common stock trades on the NASDAQ Small-Cap Market under the symbol
"GOLDF." Prior to August 11, 1995, the stock traded under the symbol "SLVRF".
The following table indicates the high and low bid prices of the common shares
during the periods indicated, as published by the NASDAQ:
QUARTER ENDED HIGH BID LOW BID
------------- -------- -------
Feb 28, 1995 15/16 5/8
May 31, 1995 1 5/8
Aug 31, 1995 1 11/16
Nov 30, 1995 7/8 15/32
Feb 29, 1996 7/8 3/8
May 31, 1996 3/4 15/32
Aug 31, 1996 21/32 13/32
Nov 30, 1996 23/32 1/2
The foregoing prices represent inter-dealer quotations without retail markups,
markdowns, or commissions and do not necessarily represent actual transactions.
(b) Holders of Common Shares
As at January 20, 1997, there were 3,284 registered holders of Silverado's
common shares, approximately 90% of whom were located in the United States.
(c) Dividends and Interest
Silverado Mines Ltd. has not declared dividends on its common stock in the two
most recent fiscal years.
Silverado is restricted in its ability to pay dividends by limitations under
British Columbia law relating to the sufficiency of profits from which dividends
may be paid. In addition, Silverado's Articles (the equivalent of the Bylaws of
a United States corporation) provide that no dividend shall be paid otherwise
than out of funds or assets properly available for the payment of dividends and
declaration by the directors as to the amount of such funds or assets available
for dividends shall be conclusive.
The Canadian Income Tax Act (the "Tax Act") provides in subsection 212(2) that
dividends and other distributions deemed to be dividends paid or deemed to be
paid by a Canadian resident company to a non-resident person shall be subject to
a non-resident withholding tax of 25 percent on the gross amount of the
dividend. Subject to certain exceptions, paragraph 212(1)(b) of the Tax Act
similarly imposes a 25 percent withholding tax on the gross amount of interest
paid by a Canadian resident to a non-resident person.
Subsection 115 (1) and Subsection 2 (3) of the Tax Act provide that a
non-resident person is subject to tax at the rates generally applicable to
persons resident in Canada on any "Taxable capital gain" arising on the
disposition of shares of a corporation that is listed on a prescribed stock
exchange (which includes NASDAQ) if:
(i) such non-resident, together with persons with whom he does not deal at
arm's length, has held 25% or more of the outstanding shares of any class
of stock of the corporation at any time during the five years preceding
such disposition; or
(ii) the shares disposed of were used by such non-resident in carrying on a
business in Canada.
A taxable capital gain is presently equal to three quarters of a capital gain.
8
Provisions in the Tax Act relating to dividend and interest payments by Canadian
residents to persons resident in the United States are subject to the 1980
Canada - United States Income Tax Convention (the "1980 Convention"). Article X
of the 1980 Convention provides that the rate of non resident withholding tax on
dividends shall not exceed 10 percent (6 percent for 1996 and 5% for 1997 and
subsequent years) of the gross amount of the dividends where the non-resident
person who is the beneficial owner of the shares is a corporation which owns at
least 10 percent of the voting stock of the corporation paying the dividend. In
other cases, the rate of non-resident withholding tax shall not exceed 15
percent.
Article XI of the 1980 Convention provides that the rate of non-resident
withholding tax on interest shall not generally exceed 15 percent (10% for 1996
and subsequent years) of the gross amount of the interest.
The reduced rates of non-resident withholding relating to dividends and interest
provided by the 1980 Convention do not apply if the recipient carries on
business or provides independent personal services through a permanent
establishment situated in Canada, and the shareholding or debt claim is
effectively connected with that permanent establishment. In that case, the
dividends and interest as the case may be, are subject to tax at the rates
generally applicable to persons resident in Canada.
Article XIII of the 1980 Convention provides that gains realized by a United
States resident on the sale of shares such as those of Silverado may be taxed in
both Canada and the United States. However, taxes paid in Canada by a United
States resident would, subject to certain limitations, be eligible for foreign
tax credit treatment in the United States, thereby minimizing the element of
double taxation.
Except as described above, there are no government laws, decrees, regulations or
treaties that materially restrict the export or import of capital, including
foreign exchange controls, or which impose taxes, including withholding
provisions, to which United States shareholders are subject.
ITEM 6
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SELECTED FINANCIAL DATA
The following table sets out our selected financial data for each of Silverado's
fiscal years ended November 30, 1996, 1995, 1994, 1993 and 1992.
YEARS ENDED NOVEMBER 30,
1996 1995 1994 1993 1992
--------------------------------------------------------
000's except per share amounts
Revenues $ 298 $ 3,053 $ 1,516 $ -- $ --
Net Earnings (Loss)
for the Year (1) $ (4,330) $ (4,095) $ (3,120) $ 143 $ (1,050)
Earnings (Loss) Per
Share Total (1) (2) $ (0.09) $ (0.11) $ (0.09) $ 0.01 $ (0.05)
END OF PERIOD
Assets $ 18,811 $ 15,140 $ 16,496 $ 15,929 $ 8,420
Gold Inventory (3) $ 213 $ 389 $ 2,028 $ 446 $ --
Long-term
Obligations $ 2,092 $ 2,395 $ 2,543 $ -- $ 2,934
(1) For 1993, after extraordinary item, forgiveness of debt of $1,294,614.
(2) Loss per share for 1993 was $0.04 before extraordinary item.
(3) Gold inventory is valued at the lower of weighted average cost or net
realizable value.
9
ITEM 7
- ------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
The table below sets forth Silverado's working capital and liquidity for the
years indicated:
NOVEMBER 30,
1996 1995 1994
----------- ----------- -----------
Cash and cash equivalents $ 1,925,469 $ 155,849 $ 190,724
Other current assets 1,054,228 462,134 2,180,299
----------- ----------- -----------
2,979,697 617,983 2,371,023
----------- ----------- -----------
Accounts payable and accrued liabilities (351,154) (527,352) (553,931)
Loans payable secured by gold inventory (66,511) (176,568) --
Payable to related parties -- (851,610) --
Current portion of mineral claims payable (179,000) (330,000) (200,000)
Current portion of capital lease obligation (64,939) (203,203) (169,765)
----------- ----------- -----------
(661,604) (2,088,733) (923,696)
----------- ----------- -----------
Working capital (deficiency) $ 2,318,093 $(1,470,750) $ 1,447,327
=========== =========== ===========
The major increase in the Company's working capital from a deficiency of
$1,470,750 at the end of 1995 to a surplus of $2,318,093 at the end of 1996
resulted from private placements and the exercise of options. The Company
further decreased its liabilities by executing and paying-off lease purchase
options on several large items of heavy mining equipment. Subsequent to year end
the Company's President, J.P. Tangen, relinquished his office to the Company's
previous President, Garry Anselmo, who assumed those duties on an unpaid basis.
This change is part of an overall strategy by the Company to reduce its
administrative overhead.
The decrease in revenues from gold sales from $3,053,000 in 1995 to $298,000 in
1996 is attributable to the Company's reduced production schedule from its Nolan
properties as it focused its primary efforts upon its extensive Fairbanks claims
in response to the large amount of competitive activity in that area. As part of
this process, the Company was able to further develop its Ester Dome Project,
develop two other properties for potential sale, and to acquire, by location,
the 53.86 square mile Chatanika property northwest of Fairbanks.
Long term liabilities consist of the long term portion of the Company's
remaining capital lease obligation, and the Company's two-million dollar
debenture which has a maturity of July 2, 1999, if not sooner converted.
The Company intends to continue its efforts to define ore bodies on Ester Dome
so as to bring that property into production as soon as practical, and
simultaneously, continue its placer operations at Nolan Creek. The Company
intends to continue the solicitation of additional capital through either equity
or debt financing, and may also engage in joint venturing or other similar
arrangements conducive to accelerating production at Ester Dome. There is,
however, no commitment by any party to provide such financing at this time, nor
assurance that such capital will be available on terms favorable to the Company.
The Company has received $335,250 subsequent to the year end as a result of
options to purchase common stock being exercised.
Management believes the Company has adequate funds to operate for the coming
fiscal year, and will continue its exploration and development programs as
additional funds become available.
10
OPERATING RESULTS
Nolan Gold Project
- ------------------
In November, 1993, the Company commenced production of placer gold from frozen
bench deposits on the Mary's Bench portion of the Dionne Property. Since then,
almost 14,000 ounces of gold have been recovered. Information gained during the
early mining operations resulted in a management decision to engage in the
construction of a larger infrastructure including the construction of a thirty
man camp, a larger machine shop, the acquisition of several pieces of earth
moving equipment and a more aggressive drilling program. These costs have yet to
be fully defrayed by production.
The Company continued a limited production program in 1996 during the course of
reclamation activities, as it focused its primary efforts on expansion,
exploration, and development of its Fairbanks properties in response to
increased competitive activity in that area. The Company intends to continue
development of both placer and lode gold deposits at Nolan in 1997.
Hammond Property
- ----------------
In December 1994, the Company entered a lease with option to purchase an
additional property adjoining the Nolan Gold Project. This new property has a
history of gold production and the Company anticipates that it will add to the
potential for developing additional gold reserves. The property also has lode
gold and antimony potential, which the Company intends to further explore and
define in 1997.
Ester Dome Gold Project
- -----------------------
The Company has a 100 percent interest in the Ester Dome Gold Project. The
Company commenced a number of geophysical surveys in 1995 on gold-bearing target
areas selected from ACNC's data and Silverado's own previous drill results, then
expanded this data with an intensive trenching and drilling program in 1996. To
date, the Company has identified gold mineralization over a length of 2,500
feet, widths up to 300 feet, and to a depth of 600 feet with grades up to 3.5
ounces per ton. The Company intends to further define this ore body so as to be
able to bring it into production as soon as practical.
Marshall Dome Gold Project
- --------------------------
The Marshall Dome Gold Project was acquired by the Company in 1995. It covers an
area of two and one-half square miles, and is located eighteen miles northeast
of Fairbanks. On November 1, 1996, the Company entered into an agreement in
principle to vend this property to Homestake Mining Company in return for annual
cash payments, annual expenditures on the property, and the payment of a Net
Smelter Return to the Company in the event of the sale of gold or other valuable
minerals; but that agreement in principle has not yet been consummated.
Whiskey Gulch Property
- ----------------------
This property, acquired by the Company in 1996 to further enhance the
desirability of its previously acquired Marshall Dome Property, above, is part
of the unconsummated agreement in principle with Homestake Mining.
Mining and Environmental Regulation
- -----------------------------------
Mining activities in the U.S. are subject to regulation and inspection by the
Mining Safety and Health Administration of the United States Department of
Labor. In addition, the Company's activities are regulated by a variety of
Federal, state, provincial and local laws and regulations relating to protection
of the environment and other matters. Many agencies have the authority to
require the Company to cease or curtail operations due to noncompliance with
laws administered by those agencies. The operation of mining properties also
requires a variety of permits from government agencies.
Management believes that it has in place all required permits for the Company's
planned operations. Management knows of no areas of noncompliance with laws or
regulations which could close or curtail operations.
11
The Company has accrued a total of $70,000 for further reclamation on the Nolan
Gold Project. Additional remediation work takes place during the normal course
of mining. In the event of closure or abandonment, the additional cost of
reclamation would not be material. The Company posted bond of $1,500 in January,
1995 with the Alaska Statewide Bond Pool to cover this event.
With regard to the Ester Dome Gold Project, in the case of closure or
abandonment, the Company estimates that any reclamation costs, net of recovery,
would be immaterial.
Nature of Claims Under Federal and State Law
- --------------------------------------------
The Company's properties consist of unpatented Federal mining claims and state
mining claims. Titles to unpatented claims are subject to inherent
uncertainties, such as whether there has been a discovery of valuable minerals
on each claim and whether proper locating and filing prerequisites have been
met, and such title can only be maintained by the performance of adequate annual
assessment work and / or the payment of prescribed rental fees. While the
Company believes that all claims which it holds were properly located under
applicable law, no assurances can be given in that regard. To date, the Company
believes that it has conducted and recorded all annual assessment work necessary
to maintain the claims in good standing. Changes to U.S. mining laws currently
under consideration would, if enacted, substantially affect all holders of
unpatented Federal mining claims by imposing royalty fees on removal of minerals
and fundamentally changing the rights and status of unpatented claim holders.
Although management believes that the imposition of royalty fees as described
above, at a minimal level, would not have a material adverse effect on the
Company, it is impossible to predict the extent to which mining or environmental
legislation may be enacted or amended nor the effect that such legislation could
have on the Company.
Other Expenses
- --------------
YEARS ENDED NOVEMBER 30,
1996 1995 1994
----------- ----------- -----------
Other Expenses $ 4,106,638 $ 2,171,926 $ 2,286,068
The Company's total other expenses increased in 1996 as a direct result of the
increase in employment contract expense (see Note 7d) which are in part accrued,
and related to a number of agreements for services in specialized marketing and
investor relations fields. Depreciation and amortization increased due to
reclassification of some of the company's assets. Interest on long term debt
represents the semi-annual installments on the Company's $2,000,000 convertible
debenture.
As with most companies involved in the mining industry, the price of the
Company's product (mainly gold) has a significant impact upon the Company's
profitability. Similarly the Company's costs, as reflected in labor and
materials are also affected by inflation. During the fiscal year ended November
30, 1996, the price of gold remained fairly stable, as did the rate of inflation
and, thus, neither item significantly affected the Company's performance.
New Accounting Standards
- ------------------------
Statement of Financial Accountings Standards No. 121, Accounting for the
Impairment of Long-Lived Assets to Be Disposed Of (SFAS 121) was issued in
March, 1995, by the Financial Accounting Standards Board. It requires that
long-lived assets and certain identifiable intangibles to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. SFAS 121
is required to be adopted for fiscal years beginning after December 15, 1995.
Management believes this statement will not have a material effect upon the
carrying value of the Company's assets.
12
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation (SFAS 123), was issued by the Financial Accounting Standards Board
in October, 1995. SFAS 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans. This statement defines a
fair value based method of accounting for employee stock option or similar
equity instruments, and encourages all entities to adopt that method of
accounting for all of their employee stock compensation plans. However, it also
allows an entity to continue to measure compensation cost for those plans using
the intrinsic value based method of accounting prescribed by APB Opinion No. 25,
Accounting for Stock Issued to Employees. Entities electing to remain with the
accounting in Opinion 25 must make proforma disclosures of net income and, if
presented, earnings per share, as if the fair value based method of accounting
defined by SFAS 123 had been applied. SFAS 123 is applicable to fiscal years
beginning after December 15, 1995. The Company currently accounts for its equity
instruments using the accounting prescribed by Opinion 25. The Company does not
currently expect to adopt the accounting prescribed by SFAS 123; however, the
Company will include the disclosures required by SFAS 123 in future consolidated
financial statements.
ITEM 8
- ------
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements listed below were prepared on the basis of
accounting principles generally accepted in the United States and are expressed
in U.S. dollars. These principles conform, in all material respects, with those
generally accepted in Canada, except as discussed in Note 1(c).
Auditors' Report F-1
Comments by Auditors for U.S. Readers
on Canada - U.S. Reporting Conflict F-1
Consolidated Balance Sheets November 30, 1996 and 1995 F-2
Consolidated Statements of Operations and Accumulated Deficit,
Years Ended November 30, 1996, 1995 and 1994 F-3
Consolidated Statements of Cash Flows,
Years Ended November 30, 1996, 1995 and 1994 F-4
Consolidated Statements of Changes in Share Capital and
Capital Surplus, Years Ended November 30, 1996, 1995 and 1994 F-5
Notes to Consolidated Financial Statements F-6 to F-14
No schedules are presented either because the required information is disclosed
elsewhere in the financial statements, or the schedules are not applicable.
F-1
AUDITORS' REPORT
To the Shareholders of Silverado Mines Ltd.
We have audited the consolidated balance sheets of Silverado Mines Ltd. as at
November 30, 1996 and 1995, and the consolidated statements of operations and
accumulated deficit, cash flows and changes in share capital and capital surplus
for each of the years in the three year period ended November 30, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence sup porting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at November 30, 1996
and 1995, and the results of its operations and the changes in its financial
position for each of the years in the three year period ended November 30, 1996
in accordance with generally accepted accounting principles in the United
States. As required by the Company Act (British Columbia), we report, that in
our opinion, these principles have been applied on a consistent basis.
/S/ KPMG
Chartered Accountants
Vancouver, Canada
January 17, 1997
COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA-U.S. REPORTING CONFLICT
In the United States, reporting standards for auditors require the addition of
an explanatory paragraph following the opinion paragraph when the financial
statements are affected by the uncertainty of the Company's ability to continue
as a going concern, as discussed in Note 1(a). Our report to th e shareholders
dated January 17, 1997 is expressed in accordance with Canadian reporting
standards which do not permit a reference to such uncertainty in the auditors'
report when the uncertainty is adequately disclosed in the financial statements
and accompanying notes.
/S/ KPMG
Chartered Accountants
Vancouver, Canada
January 17, 1997
F-2
SILVERADO MINES LTD.
CONSOLIDATED BALANCE SHEETS
EXPRESSED IN U.S. DOLLARS
Years Ended November 30 1996 1995
------------ ------------
Assets
Current Assets
Cash and cash equivalents $ 1,925,469 $ 155,849
Gold inventory 213,004 389,119
Accounts receivable 11,265 1,010
Prepaid expenses 479,959 72,005
Deferred employment contract expense 350,000 --
------------ ------------
2,979,697 617,983
Mineral Properties and Development (Note 2)
Claims and options 2,327,025 1,755,811
Deferred exploration and development expenditures 11,286,816 10,084,116
------------ ------------
13,613,841 11,839,927
Less accumulated amortization (1,384,338) (1,260,834)
------------ ------------
12,229,503 10,579,093
Building, Plant and Equipment (Note 3) 3,503,182 3,806,350
Deferred Financing Fees
(net of amortization of $87,038: 1995 - $49,838) 98,962 136,162
------------ ------------
$ 18,811,344 $ 15,139,588
============ ============
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued liabilities (Note 4) $ 351,154 $ 527,352
Loans payable secured by gold inventory 66,511 176,568
Current portion of mineral claims payable (Note 2a) 179,000 330,000
Capital lease obligations - current (Note 9b) 64,939 203,203
Payable to related parties -- 851,610
------------ ------------
661,604 2,088,733
Long Term Liabilities
Mineral claims payable (Note 2a) -- 200,000
Capital lease obligations (Note 9b) 92,214 194,569
Convertible debenture (Note 5) 2,000,000 2,000,000
------------ ------------
2,092,214 2,394,569
Shareholders' Equity
Share capital (Note 6)
Authorized: 75,000,000 common shares
Issued and outstanding: November 30, 1996 - 56,406,493 shares 38,506,711 28,775,211
November 30, 1995 - 37,431,493 shares
Capital surplus 46,352 46,352
Deficit (22,495,537) (18,165,277)
------------ ------------
16,057,526 10,656,286
------------ ------------
$ 18,811,344 $ 15,139,588
============ ============
See accompanying notes to consolidated financial statements
F-3
SILVERADO MINES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
EXPRESSED IN U.S. DOLLARS
Years Ended November 30 1996 1995 1994
------------ ------------ ------------
Revenue from gold sales $ 298,124 $ 3,053,289 $ 1,515,762
------------ ------------ ------------
Operating costs
Mining and processing costs 366,249 4,515,138 1,861,728
Amortization of property and development costs 123,504 431,384 418,336
Reclamation expense 31,993 29,397 70,000
------------ ------------ ------------
521,746 4,975,919 2,350,064
------------ ------------ ------------
Loss from Operations (223,622) (1,922,630) (834,302)
Other Expenses
Accounting and audit 69,331 62,891 110,312
Corporate capital taxes (5,967) 32,014 --
Depreciation and amortization 513,082 220,846 29,194
Employment contract expense (Note 6) 1,910,060 223,273 604,090
Financing activities 35,159 18,900 88,551
General exploration 13,980 -- --
Interest on long term debt 160,000 160,000 57,425
Legal 35,733 114,294 193,027
Loss on disposal of buildings, plant and equipment -- -- 222,188
Loss (gain) on foreign exchange (5,298) (5,332) (349)
Management salaries 263,000 184,349 --
Management services 323,108 190,009 61,785
Office expenses 262,333 387,498 149,771
Other interest and bank charges (net) 4,908 82,928 41,525
Printing and publicity 371,281 410,195 391,318
Reporting and investor relations 26,833 24,447 190,623
Transfer agent fees and mailing expenses 129,095 65,614 146,608
------------ ------------ ------------
4,106,638 2,171,926 2,286,068
Loss for the year (4,330,260) (4,094,556) (3,120,370)
Accumulated deficit at beginning of year (18,165,277) (14,070,721) (10,950,351)
------------ ------------ ------------
Accumulated deficit at end of year $(22,495,537) $(18,165,277) $(14,070,721)
============ ============ ============
Loss per share (Note 1(h)) $ (0.09) $ (0.11) $ (0.09)
============ ============ ============
See accompanying notes to consolidated financial statements
F-4
SILVERADO MINES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
EXPRESSED IN U.S. DOLLARS
Years Ended November 30 1996 1995 1994
------------ ------------ ------------
CASH PROVIDED BY (USED FOR):
Operations:
Loss for the period $ (4,330,260) $ (4,094,556) $ (3,120,370)
Items not involving cash:
Employment contract expense 1,910,060 223,273 597,689
Depreciation 475,882 183,646 16,556
Amortization of deferred financing fees 37,200 37,200 12,638
Loss on disposal of buildings, plant and equipment -- -- 222,188
Amortization of property and development costs 123,504 431,384 418,336
Changes in non-cash operating working capital:
Increase in accounts receivable (10,255) (1,010) --
Decrease (increase) in gold inventory 176,115 1,638,670 (1,582,189)
Decrease (increase) in prepaid expenses (448,283) 120,835 67,489
Increase (decrease) in accounts payable and accrued liabilities (274,429) 282,488 (16,207)
------------ ------------ ------------
(2,340,466) (1,178,070) (3,383,870)
Financing:
Shares issued for cash 7,610,000 1,104,600 199,050
Proceeds on issue of convertible debenture -- -- 2,000,000
Financing fees -- -- (186,000)
Increase (decrease) in loans payable secured by gold inventory (110,057) 176,568 --
Increase (decrease) in payable to related parties (851,610) 851,610 (47,434)
Decrease in mineral claims payable (351,000) (70,000) --
Increase (decrease) in capital lease obligation (240,619) 85,072 --
------------ ------------ ------------
6,056,714 2,147,850 1,965,616
Investments:
Mineral claims and options (571,214) (32,900) (474,504)
Deferred exploration and development expenditures (1,202,700) (617,118) (1,603,382)
Purchases of equipment (172,714) (354,637) (1,039,318)
------------ ------------ ------------
(1,946,628) (1,004,655) (3,117,204)
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents 1,769,620 (34,875) (4,535,458)
Cash and cash equivalents at beginning of year 155,849 190,724 4,726,182
------------ ------------ ------------
Cash and cash equivalents at end of the year $ 1,925,469 $ 155,849 $ 190,724
============ ============ ============
Supplemental cash flow information
Interest paid $ 242,562 $ 233,942 $ 39,776
============ ============ ============
Issue of shares for purchase of mineral property, a non-cash
financing and investing activity $ -- $ 43,750 $ 12,500
============ ============ ============
See accompanying notes to consolidated financial statements
F-5
SILVERADO MINES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHARE CAPITAL
AND CAPITAL SURPLUS
(EXPRESSED IN U.S. DOLLARS)
Years ended November 30, 1996, 1995, and 1994
Number of Share Capital
shares Capital Surplus
---------- ------------ ------------
Balance as at November 30, 1993 33,946,243 25,899,869 46,352
---------- ------------ ------------
Year ended November 30, 1994
Shares issued:
Private placement for cash 700,000 654,150
On exercise of share options for cash
and employment contract expense 331,750 487,672
For mineral property 50,000 12,500
---------- ------------ ------------
1,081,750 1,154,322 --
---------- ------------ ------------
Balance as at November 30, 1994 35,027,993 27,054,191 46,352
---------- ------------ ------------
Year ended November 30, 1995
Shares issued:
On exercise of share options for cash
and employment contract expense 2,303,500 1,677,270
For mineral property 100,000 43,750
---------- ------------ ------------
2,403,500 1,721,020 --
---------- ------------ ------------
Balance as at November 30, 1995 37,431,493 28,775,211 46,352
---------- ------------ ------------
Year ended November 30, 1996
Shares issued:
On exercise of share options for cash
and employment contract expense
(Note 6 (d)) 18,050,000 9,301,500
Private placement for cash 925,000 430,000
---------- ------------ ------------
18,975,000 9,731,500 --
---------- ------------ ------------
Balance as at November 30, 1996 56,406,493 $ 38,506,711 $ 46,352
========== ============ ============
F-6
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements for the years ended November 30,
1996, 1995 and 1994 are prepared in conformity with accounting principles
generally accepted in the United States.
(a) Continuing Operations
During the year ended November 30, 1996, the Company focused its activities
on the Fairbanks area, explored and drilled several sites on its Ester Dome
property, acquired two new properties, and continued production, on a
limited basis, on other claims. The Company generated $7,610,000 in
additional capital through a private placement and the exercise of options,
thereby addressing its previous working capital deficiency of $1,470,750.
At November 30, 1996, the Company had $2,979,697 in current assets,
primarily cash, which management believes will permit it to continue its
present operations for the next fiscal year. The ability of the Company to
continue operations and recover amounts recorded as mineral properties,
development, and buildings, plant and equipment is dependent on obtaining
additional capital to fund its liabilities as they come due and to fund its
operations, and exploration and development activities, the discovery of
recoverable ore on its properties, and the attainment of profitable
commercial operations.
(b) Functional Currency
The Company's reporting currency, and currency of measurement, is the U.S.
dollar.
(c) Basis of Consolidation
The consolidated financial statements include the accounts of Silverado
Mines (U.S.), Inc., a wholly owned subsidiary. All significant intercompany
accounts and transactions have been eliminated.
(d) Gold Inventory
Gold inventory is valued at the lower of weighted average cost and
estimated net realizable value. At November 30, 1996 and 1995, gold
inventory is valued at net realizable value. Any write-down of inventory to
net realizable value is included in mining and processing costs.
(e) Mineral Properties and Development
The Company confines its exploration activities to areas from which gold
has previously been produced or to properties which are contiguous to such
areas and have demonstrated mineralization. Accordingly, the Company
capitalizes costs of acquiring, exploring and developing mineral claims and
options until such time as the properties are placed into production or
abandoned; at that time costs are amortized or written off. On an on-going
basis, the Company evaluates each property based on results to date to
determine the nature of exploration work that is warranted in the future.
If there is little prospect of further work on a property being carried
out, the deferred costs related to that property are written down to the
estimated amount recoverable.
The amounts shown for mineral properties and development which have not yet
commenced commercial production represent costs incurred to date, net of
recoveries from developmental production, and are not intended to reflect
present or future values.
Amortization of the deferred exploration and development costs of
properties in production is provided during periods of production using the
straight-line method based on an estimated economic life of the ore
reserves.
(f) Buildings, Plant and Equipment
Buildings, plant and equipment are stated at cost. Depreciation is provided
on buildings, plant and equipment using the straight-line method based on
an estimated life of 3 to 20 years. The Company anticipates reactivating
the Grant Mine, and as a result, has started to again depreciate the assets
accordingly.
F-7
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
(g) Foreign Currencies
Monetary assets and liabilities denominated in foreign currencies are
translated into U.S. funds at the rate of exchange in effect at the year
end. Revenue and expense transactions are translated at the average rates
in effect during the year except depreciation of plant and equipment and
amortization of mineral properties and development which are translated at
historical rates. Foreign exchange gains and losses are included in the
determination of income.
(h) Loss Per Share
Loss per share has been calculated based on the weighted average number of
shares outstanding during the year. Loss per share does not include the
effect of the potential conversions as their effect would be anti-dilutive.
The weighted average number of shares outstanding is as follows:
Year to November 30, 1996 45,611,698
Year to November 30, 1995 35,678,501
Year to November 30, 1994 34,756,800
(i) Revenue Recognition
Gold sales are recognized when title passes to the purchaser.
2. MINERAL PROPERTIES AND DEVELOPMENT
(a) Mineral Properties
Ester Dome Properties, Fairbanks Mining District, Alaska
--------------------------------------------------------
These properties, which include the Grant Mine, Range Minerals #1, Range
Minerals #2, St. Paul / Barelka, and Dobb's properties, make up a
contiguous group of claims.
Marshall Dome Property, Fairbanks Mining District, Alaska
---------------------------------------------------------
The Company acquired this property in 1995. It covers an area of two and
one-half square miles, and is located eighteen miles northeast of
Fairbanks.
Whiskey Gulch Property, Fairbanks Mining District, Alaska
----------------------------------------------------------
The Company acquired four claims collectively known as "Whiskey Gulch" in
1996. These claims are located very near the Company's Marshall Dome
property.
Chatanika Property, Fairbanks Mining District, Alaska
-----------------------------------------------------
The Company staked 774 mining claims and 24 prospecting sites in 1996. This
property covers an area of 53.86 square miles, and is located approximately
20 miles northwest of Fairbanks.
Nolan Properties, Wiseman Mining District, Alaska
-------------------------------------------------
These properties, which include the Nolan Placer, Nolan Lode, Thompson's
Pup, Dionne (Mary's Bench), and Smith Creek properties, make up a
contiguous group of claims.
Hammond Property, Wiseman Mining District, Alaska
-------------------------------------------------
The Company acquired this property, adjoining the Nolan Gold Properties, in
1994.
Eagle Creek Property, Fairbanks Mining District, Alaska
-------------------------------------------------------
The Company assigned its interest and obligations related to this property
to Can-Ex Resources (U.S.), Inc. ("Can-Ex"), a related company (see Note
8), and retained a 15 percent net profit interest from production to a
maximum of $5,000,000.
French Peak Property, Omineca Mining District, British Columbia
---------------------------------------------------------------
Anselmo Holdings Ltd., a related company, has a 10 percent net profits
interest in the property.
F-8
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
Property Commitments
--------------------
Minimum aggregate future expenditures required in the next five years to
maintain the properties in good standing are as follows:
Year Commitment
-------------------
1997 $ 393,920
1998 423,920
1999 363,920
2000 213,220
2001 268,240
The Company is also required to pay $179,000 in 1997 with respect to the
Dionne (Mary's Bench) property. This amount is not at the discretion of the
Company, and accordingly, has been recorded as a liability in these
financial statements.
(b) Claims and Options and Deferred Exploration and Development Expenditures
Cumulative claims and options and deferred exploration and development
expenditures are as follows:
Net Net
book value 1996 1996 book value
Alaska Nov. 30, 1995 Expenditures Amortization Nov. 30, 1996
------------- ------------- ------------- -------------
Ester Dome Gold Project $ 4,573,782 $ 595,426 $ -- $ 5,169,208
Marshall Dome 138,531 40,497 -- 179,028
Nolan Gold Project 4,118,636 508,055 (36,500) 4,590,191
Hammond Property 253,808 17,048 -- 270,856
Eagle Creek Royalty Interest 126,320 7,027 -- 133,347
Whiskey Gulch -- 21,791 -- 21,791
Chatanika -- 12,861 -- 12,861
British Columbia
French Peak 261,110 -- -- 261,110
------------- ------------- ------------- -------------
9,472,187 1,202,705 (36,500) 10,638,392
------------- ------------- ------------- -------------
Plus:
Cumulative net mineral
claims and option payments 1,106,906 571,209 (87,004) 1,591,111
------------- ------------- ------------- -------------
$ 10,579,093 $ 1,773,914 $ (123,504) $ 12,229,503
============= ============= ============= =============
F-9
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
3. BUILDINGS, PLANT AND EQUIPMENT
Buildings, plant and equipment primarily include the mill facility and equipment
of the Ester Dome/Grant Mine Gold Project and mining equipment and camp
facilities at the Nolan Gold Project.
1996 1995
Accumulated Net Book Net Book
Cost Depreciation Value Value
------------ ------------ ------------ ------------
Ester Dome/Grant Mine $ 2,215,680 $ (377,754) $ 1,837,926 $ 2,019,700
Nolan Gold Project 60,757 (14,483) 46,274 43,013
Mining Equipment 1,768,612 (419,837) 1,348,775 1,444,127
Other Assets 378,381 (108,174) 270,207 299,510
------------ ------------ ------------ ------------
Totals: $ 4,423,430 $ (920,248) $ 3,503,182 $ 3,806,350
============ ============ ============ ============
4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of:
1996 1995
------------ ------------
Accounts payable $ 118,858 $ 360,941
Accrued interest 64,065 66,411
Accrued employment contract expense 98,231 --
Accrued reclamation expense 70,000 100,000
------------ ------------
$ 351,154 $ 527,352
============ ============
5. DEBENTURE
In July 1994, the Company issued a convertible callable debenture with interest
payable at the rate of 8.0% per annum on December 31 and June 30 each year. The
debenture is unsecured and is due July 2, 1999, subject to prior redemption or
conversion. The debenture may be converted in whole or in part by the holder
into common shares of the Company at a conversion price of $2.00 U.S. per share
(the "Conversion Price"). In addition, conversion of the debenture may be called
by the Company provided that the average trading price of the Company's common
Stock has exceeded 125% of the Conversion Price for the period of 20 consecutive
trading days. Financing fees paid related to the debenture have been deferred
and are being amortized on a straight line basis over the debenture term of 60
months. The fair value of the debenture is not significantly different than the
carrying value.
6. SHARE CAPITAL
(a) Common Shares
Authorized: 75,000,000 (1995: 50,000,000) common shares, without par value.
(b) Directors' Options
Directors' options for 450,000 shares exercisable at Cdn. $0.37 per share
and which expire June 1, 1997, were outstanding at November 30, 1996, 1995
and 1994. During the year ended November 30, 1995, the Company authorized
the issuance of options to directors and officers to acquire 1,300,000
shares at $0.88 (U.S.) per share exercisable until August 14, 2004.
F-10
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
(c) Warrants
In conjunction with a private placement of 600,000 shares , the Company has
offered a warrant for 600,000 shares at $0.60 per share exercisable until
March 6, 1998, and a warrant for 600,000 shares at $0.70 per share
exercisable until September 6, 1999.
Warrants:
---------
Amount
Cash Market credited to
Balance Issued Exercised Canceled Balance Exercise Received Price on Share capital Exp
Nov 30, 95 in 1996 in 1996 in 1996 Nov 30, 96 Price on Issue issue on issuance Date
-----------------------------------------------------------------------------------------------------------------
-- 600,000 -- -- 600,000 $0.60 -- $0.63 -- 3/98
-- 600,000 -- -- 600,000 $0.70 -- $0.63 -- 9/99
--------- ---------- ---------- ------- ---------- ---------- -----------
-- 1,200,000 -- -- 1,200,000 -- --
========= ========== ========== ======= ========== ========== ===========
(d) Employee Options and Other Share Transactions
From time to time, the Company issues options for the purchase of common
shares to selected part time employees as sole compensation for contracted
services. The options are exercisable either at the date the options are
granted, or in increments over the terms of the employment contracts.
The Company accounts for stock compensation arising from these options in
accordance with APB 25. If the market price of the Company's shares exceed
the exercise price of the options at the date the options are granted, then
this excess is accrued and expensed as contracted services over the term of
the employment contracts on a straight line basis. When the options are
exercised, share capital is credited based on the market price at the date
the options were granted.
Employee options and share transactions:
----------------------------------------
Amount
Cash Market credited to
Balance Granted Exercised Canceled Balance Exercise Received Price on Share capital Exp
Nov 30, 95 in 1996 in 1996 in 1996 Nov 30, 96 Price on Issue issue on issuance Date
-----------------------------------------------------------------------------------------------------------------
800,000 -- 800,000 -- -- $0.30 240,000 $0.50 400,000 n/a
214,750 -- -- 104,250 110,500 $0.60 -- $1.47 -- 2/97
250,000 -- -- 110,000 140,000 $0.94 -- $0.94 -- 7/97
20,000 -- -- -- 20,000 $0.75 -- $0.75 -- 8/97
20,000 -- -- -- 20,000 $0.75 -- $0.75 -- 8/97
-- 1,000,000 1,000,000 -- -- $0.38 380,000 $0.53 530,000 n/a
-- 400,000 400,000 -- -- $0.30 120,000 $0.53 212,000 n/a
-- 300,000 300,000 -- -- $0.50 150,000 $0.75 225,000 n/a
-- 150,000 150,000 -- -- $0.50 75,000 $0.63 94,500 n/a
-- 50,000 50,000 -- -- $0.50 25,000 $0.50 25,000 n/a
-- 500,000 500,000 -- -- $0.50 250,000 $0.59 295,000 n/a
-- 500,000 500,000 -- -- $0.50 250,000 $0.50 250,000 n/a
-- 500,000 500,000 -- -- $0.50 250,000 $0.50 250,000 n/a
-- 500,000 500,000 -- -- $0.50 250,000 $0.63 315,000 n/a
F-11
-- 500,000 500,000 -- -- $0.50 250,000 $0.50 250,000 n/a
-- 1,000,000 1,000,000 -- -- $0.20 200,000 $0.53 530,000 n/a
-- 300,000 300,000 -- -- $0.20 60,000 $0.50 150,000 n/a
-- 700,000 700,000 -- -- $0.20 140,000 $0.50 350,000 n/a
-- 1,000,000 1,000,000 -- -- $0.40 400,000 $0.50 500,000 n/a
-- 1,000,000 1,000,000 -- -- $0.40 400,000 $0.50 500,000 n/a
-- 3,000,000 3,000,000 -- -- $0.40 1,200,000 $0.50 1,500,000 n/a
-- 1,100,000 1,100,000 -- -- $0.45 495,000 $0.50 550,000 n/a
-- 900,000 900,000 -- -- $0.30 270,000 $0.50 450,000 n/a
-- 3,000,000 3,000,000 -- -- $0.45 1,350,000 $0.50 1,500,000 n/a
-- 20,000 -- -- 20,000 $0.50 -- $0.53 -- 10/97
-- 100,000 -- -- 100,000 $0.45 -- $0.59 -- 10/98
-- 180,000 -- -- 180,000 $0.50 -- $0.63 -- 11/97
-- 50,000 -- -- 50,000 $0.50 -- $0.56 -- 11/97
-- 50,000 -- -- 50,000 $0.60 -- $0.56 -- 11/97
-- 2,000,000 850,000 -- 1,150,000 $0.50 425,000 $0.50 425,000 7/97
-- 1,000,000 -- -- 1,000,000 $0.60 -- $0.56 -- 9/97
--------- ---------- ---------- ------- ---------- ---------- -----------
1,304,750 19,800,000 18,050,000 214,250 2,840,500 $7,180,000 $9,301,500
========= ========== ========== ======= ========== ========== ===========
Subsequent to the year end, options to purchase 1,150,000 common shares at
$0.50 per share, described above, were amended to $0.12 per share, and
exercised for a total amount of $138,000.
Subsequent to the year end, options to purchase 1,000,000 common shares at
$0.60 per share, described above, were amended to $0.12 per share, and
exercised for a total amount of $120,000.
Subsequent to the year end, options granted to purchase 50,000 common
shares at $0.50 per share, and 50,000 shares at $0.60, were amended to
150,000 shares at $0.50, and 150,000 shares at $0.60, respectively. Each
amended option had a fair market value of $0.40.
Subsequent to the year end, options were granted and exercised to purchase
515,000 common shares at $0.15 per share, for a total amount of $77,250.
As at January 31, 1997, the Company has reserved 5,469,750 shares for
issuance with respect to unexercised options in the Directors' and
Employees' Option Plans
The Company has reserved 1,200,000 shares for issuance with respect to the
potential exercise of warrants.
The Company has reserved 1,000,000 shares for issuance upon the potential
conversion of a convertible debenture.
7. RELATED PARTY TRANSACTIONS
The Company has had related party transactions with Tri-Con Mining Ltd., Tri-Con
Mining, Inc., Tri-Con Mining Alaska Inc. (formerly Tri-Con Mining, Arizona,
Inc.), collectively the "Tri-Con Group"; and Anselmo Holdings Ltd., all of which
are controlled by a director of the Company, and Kintana Resources Ltd., a
company related by virtue of common directors.
F-12
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
The Tri-Con Group carries on business as operations and exploration and
development contractors, and has been employed by the Company under continuous
contract since 1972 to carry out all its field work and to provide
administrative and management services. Under the current contract, work is
charged at cost plus 8 percent for operations, and cost plus 25 percent for
exploration and development. Cost includes a 12 percent charge for office
overhead. Services of the directors of the Tri-Con Group are charged at the rate
of Cdn. $100 per hour. Services of the Directors of the Tri-Con Group who are
also Officers and Directors of the Company are not charged.
The aggregate amounts paid to the Tri-Con Group each year, including amounts
relating to the Grant Mine Project and Nolan properties, for disbursements and
for services rendered by the Tri-Con Group personnel working on the Company's
projects, including interest charged on outstanding balances at the Tri-Con
Group's borrowing costs, are set out below. Amounts charged in excess of the
costs incurred by the Tri-Con Group to render the services are also shown.
Aggregate amount charged Amount charged in excess Excess amount as a
by the Tri-Con Group for of Tri-Con costs incurred percentage of amount
services charged
---------------------------- --------------------------- ----------------------------
Year ended Nov 30, 1996 $ 1,471,734 $ 163,493 11.1 %
Charged directly to the =========== ============
Company
Year ended Nov 30, 1995 $ 4,170,335 $ 281,441 6.7 %
Charged directly to the =========== ============
Company
Year ended Nov 30, 1994 $ 5,318,050 $ 396,798 7.5%
Charged directly to the =========== ============
Company
In 1989, the Company assigned its interest in and obligations related to the
Eagle Creek property to Can-Ex Resources (U.S.), Inc., a subsidiary of Kintana
Resources Ltd., for a net profit interest from production of 15 percent to a
maximum of $5,000,000 U.S.
Anselmo Holdings Ltd. has a right to 10 percent of net profits derived from the
French Peak Property.
At November 30, 1996, $466,688 is receivable from the Tri-Con Group,
representing funds advanced for work in progress.
At November 30, 1995, $851,610 was payable to the Tri-Con Group.
8. INCOME TAXES
At November 30, 1996, the Company has the following losses carried forward
available to reduce future years' income for tax purposes. The tax effect of
these losses has not been recorded in the accounts.
Losses carried forward for U.S., income tax purposes are available until:
Losses
Carried
Year Forward
---- -----------
1997 987,000
1998 546,000
1999 667,000
2000 1,235,000
2001 2,749,000
F-13
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
2002 1,178,000
2003 1,524,000
2004 1,161,000
2005 742,000
2006 431,000
2007 747,000
2008 2,101,000
2009 1,960,000
2010 2,400,000
2011 326,000
-----------
Operating losses carried forward for tax purposes: $18,754,000
The Company follows Financial Accounting Standards Board Statement No. 109,
Accounting for Income Taxes. As indicated, the Company has significant
unrecognized loss carry forwards for income tax purposes. As there is no
certainty as to the utilization of the loss carry forwards, the benefit
attributable thereto is fully offset by the valuation allowance.
9. COMMITMENTS AND CONTINGENCIES
(a) On January 20, 1994 , the Company entered into a lease agreement for office
premises for a term of 10 years commencing April 1, 1994, with an
approximate annual rate of $120,000 (Cdn) including operating costs.
(b) During 1994 and 1995 the Company entered into capital leases for mining
equipment with the following future minimum lease payments:
Year ending November 30 - 1997 $ 78,570
1998 78,570
1999 20,815
--------
Total minimum lease payments 177,955
Less: interest payable (20,802)
157,153
Less: current portion (64,939)
--------
$ 92,214
(c) The Company has entered into an unconsummated agreement in principle with
Homestake Mining Company to possibly vend its Whiskey Gulch and Marshall
Dome properties in return for annual cash payments, annual expenditures on
the properties, and a Net Smelter Return to the Company in the event of the
production and sale of gold or other valuable minerals.
(d) The Company has entered into compensation agreements with the three
directors of the Company. The agreements provide for severance arrangements
where a change of control of the Company occurs, as defined, and the
directors are terminated. The compensation payable to the directors
aggregates $6,200,000 plus the amount of annual bonuses and other benefits
that they would have received in the eighteen months following the
terminations, though this amount was subsequently reduced to $4,200,000.
F-14
SILVERADO MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
(e) The Company's operations are affected by Federal, state, provincial and
local laws and regulations regarding environmental protection. The Company
estimates the cost of reclamation based primarily upon environmental and
regulatory requirements. The costs are accrued annually and the accrued
liability is reduced as reclamation expenditures are made. Reclamation has
been largely carried out during the normal course of mining.
10. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform with the
presentation adopted in 1996.
ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
The information required by Part III of this report:
Item 10 Directors and Executive Officers,
- -------
Item 11 Executive Compensation
- -------
Item 12 Security Ownership of Certain Beneficial Owners of Management, and
- -------
Item 13 Certain Relationships and Related Transactions
- -------
is incorporated herein by reference from the Company's definitive proxy
statement with respect to the 1997 Annual Meeting of the Shareholders to be held
in May, 1997. The Company's definitive proxy statement will be filed with the
Securities and Exchange Commission pursuant to Rule 14a-6(c) promulgated under
the Securities Exchange Act of 1934 not later than 120 days after the end of the
fiscal year covered by this report.
PART IV
ITEM 14
- -------
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
(1) The following financial statements are included in Part II, Item 8 to this
report:
Auditors' Report
Comments by Auditors for U.S. Readers on Canada - U.S. Reporting Conflict
Consolidated Balance Sheets at November 30, 1996 and 1995
Consolidated Statements of Operations and Accumulated Deficit, years ended
November 30, 1996, 1995 and 1994
Consolidated Statements of Cash Flows, years ended November 30, 1996, 1995
and 1994
Consolidated Statements of Changes in Share Capital and Capital Surplus,
years ended November 30, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
(2) Financial statement schedules:
No schedules are presented either because the required information is
disclosed elsewhere in the financial statements, or the schedules are not
applicable.
(3) Exhibits required to be filed are listed in Item 14(c).
(b) Reports on Form 8-K:
During the last quarter of the fiscal year covered by this report, no Form
8-K Current reports were filed by the Company.
(c) Exhibits
Consent of KPMG Peat Marwick Thorne.
(3) Articles of Incorporation and Bylaws
(i) (a) Altered memorandum of Silverado, including increase in authorized
capital to 50,000,000 shares without par value is incorporated by reference
to Exhibit 3 to Silverado's 10-Q for the quarter ended May 31, 1993.
(ii) (a) Articles of Aalenian Resources Ltd. is incorporated by reference to
Exhibit 3(c) to Silverado's Registration Statement on Form 10, No. 0-12132,
filed May 11, 1984, as amended on Form 8, July 10, 1984.
(4) Instruments Defining Rights of Security Holders, Including Indentures
(a) Specimen certificate representing shares of the capital stock of Silverado
is incorporated by reference to Exhibit 4(a) to Silverado's Report on Form
10, No. 0-12132, filed May 11, 1984, as amended on Form 8, filed July 10,
1984.
(10) Material Contracts
(a) Operating Agreement between Silverado and Tri-Con Mining Ltd. is
incorporated by reference to Exhibit 10 (d)(2) to Silverado's Form 10-Q for
the quarter ended May 31, 1988.
(b) Management Compensatory Plan - Silverado Mines Ltd. 1994 Stock Option and
Bonus Plan. Incorporated by reference to Exhibit 10.4 to Silverado's
Registration Statement on Form S-3, File No. 33-76880.
(e) Property Option Agreements.
(i) Grant Mine Property
(a) Agreement for Conditional Purchase and Sale of Mining Property -
Silverado/Burggraf (10/6/78) is incorporated by reference to Exhibit
10(e)(i)(a) to Silverado's Registration Statement on Form 10, No. 0-12132,
filed May 11, 1984, as amended on Form 8, filed July 10, 1984.
(d) Exploration and Mining Lease - Silverado Mines (U.S.), Inc./ Gilbert Dobbs
(11/6/84) is incorporated by reference to Exhibit 10(e)(f) to the
Registrant's Report on Form 10-K for the fiscal year ended November 30,
1984.
(ii) Range Minerals Property
(a) Agreement #1-Silverado/Taylor (8/30/80) is incorporated by reference to
Exhibit 10(e)(ii)(a) to Silverado's Registration Statement on Form 10,
0-12132, filed May 11, 1984, as amended on Form 8, filed July 10, 1984.
(b) Agreement #2 Silverado/Taylor (8/30/80) is incorporated by reference to
Exhibit 10(e)(ii)(b) to Silverado's Registration Statement on Form 10, No.
0-12132, filed May 11, 1984, as amended on Form 8, filed July 10, 1984.
(iii)St. Paul Barelka Property
(a) Equity Agreement - Silverado/Barelka/May/Thoennes (5/12/79) is incorporated
by reference to Exhibit 10(e)(iii)(a) to Silverado's Registration Statement
on Form 10, No. 0-12132, filed May 11, 1984, as amended on Form 8, filed
July 10, 1984.
(iv) Eagle Creek Property
(a) Option Agreement - Taylor/O'Hara/Tan (7/9/76) is incorporated by reference
to Exhibit 10(e)(v)(a) to Silverado's Registration Statement on Form 10,
No. 0-12132, filed May 11, 1984, as amended on Form 8, filed July 10, 1984.
(b) Assignment of Option - Aalenian (now Silverado)/Tan (8/26/76) is
incorporated by reference to Exhibit 10(e)(v)(b) to Silverado's
Registration on Form 10, No. 0-12132, filed May 11, 1984, as amended on
Form 8, filed July 10, 1984.
(c) Assignment of Option - Can-Ex. (8/4/89) is incorporated by reference to
Exhibit 10(e)(v)(c) to Silverado's Report on Form 10-K, for the fiscal year
ended November 30, 1989.
(v) Thompson Pup Property
(a) Option Agreement - Figlenski/Carlson/Silverado (6/9/81) is incorporated by
reference to Exhibit 0(e)(vi)(a) to Silverado's Registration Statement on
Form 10, No. 0-12132, filed May 11, 1984, as amended on Form 8, filed July
10, 1984.
(vi) French Peak Property
(a) Amendment of Agreement - Silverado / Can-Ex (now Anselmo Holdings)(9/19/80)
is incorporated by reference to Exhibit 10(e)(ix)(d) to Silverado's
Registration Statement on Form 10, No. 0-12132 filed May 11, 1984, as
amended on Form 8, filed July 10, 1984.
(b) Amendment of Agreement (7/21/83) is incorporated by reference to Exhibit
10(e)(ix)(e) to Silverado's Registration Statement on Form 10, No. 0-12132,
filed May 11, 1984, as amended on Form 8, filed July 10, 1984.
(vii)Smith Creek Property
(a) Purchase and Sales Agreement - Mickelson / Anderson / Silverado (08/20/93)
is incorporated by reference to Exhibit 10(vii)(a) to the Registrants
Report on Form 10-K for the fiscal year ended November 30, 1993.
(viii)Mary's Bench Property
(a) Purchase and Sales Agreement - Dionne / Dionne / Deveny / Silverado
(09/21/93) is incorporated by reference to Exhibit 10(viii)(a) to the
Registrants Report on Form 10-K for the fiscal year ended November 30,
1993.
(ix) Marshall Dome Property
Agreement for Purchase and Sale - Raymond Moore / "BJ" Hall / Silverado,
dated October 9, 1995.
(x) Hammond Property
Lease of Mining Claims with Option to Purchase - Alaska Mining Company Inc.
("ALMINCO") / Silverado, dated February 3, 1995.
(11) Statement Re Computation of Per Share Earnings The computation of per share
net earnings/loss as described in Note 1(h) to the financial statements set
forth in Item 8 of this report is by this reference incorporated herein.
(21) Subsidiaries of Registrant
The information required in Exhibit 21 is set forth in Item 1(a) of this
report and by this reference incorporated herein.
(23) Consents of Experts and Counsel
(a) Consent of of KPMG Peat Marwick Thorne, filed herewith.
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears below
hereby constitutes and appoints Garry L. Anselmo his true and lawful
attorney-in-fact and agent, with full power of substitution and restitution, for
him and in his name, place and stead, in any and all capacities, to sign any and
all amendments to this annual report on Form 10-K, and to file the same with all
exhibits thereto and any other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities on the dates indicated:
/s/ Garry L. Anselmo Feb 27, 1997
- ------------------------ ------------
Garry L. Anselmo
Chairman of the Board of Directors
/s/ J.P. Tangen Feb 26, 1997
- ------------------------ ------------
J.P. Tangen
Director
/s/ James F. Dixon Feb 26, 1997
- ------------------------ ------------
James F. Dixon
Director
/s/ K. Maxwell Fleming Feb 26, 1997
- ------------------------ ------------
K. Maxwell Fleming
Director
SIGNATURES
PURSUANT to the requirements of Section 1 of 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SILVERADO MINES LTD.
BY: /s/ Garry L. Anselmo Feb 27, 1997
- ------------------------ ------------
G.L. Anselmo, Chairman
Chief Financial Officer