<PAGE>
FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTER ENDED MAY 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number 0-12132
SILVERADO GOLD MINES LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
British Columbia, Canada 98 -0045034
- --------------------------------- --------------------------
(State or other jurisdiction (I.R.S. Employer I.D. No.)
of incorporation or organization)
Suite 505, 1111 West Georgia Street
- -------------------------------------------
Vancouver, British Columbia, Canada V6E 4M3 (604) 689-1535
- ------------------------------------------- ------------------------------
(Address of Principal Executive Offices) (Registrant's telephone number)
SILVERADO MINES LTD.
- ---------------------
(Former name, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the SECURITIES AND EXCHANGE ACT OF 1934
during the preceding 12 months (or for a 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 1, 1997
- ------------------ ---------------------------
Common stock (npv) 64,151,493
<PAGE>
<TABLE>
SILVERADO GOLD MINES LTD.
CONSOLIDATED BALANCE SHEETS AS AT
EXPRESSED IN U.S. DOLLARS MAY 31 NOVEMBER 30
1997 1996
---------------------------------
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 540,713 $ 1,925,469
Gold inventory (Note 2) 168,875 213,004
Accounts receivable 15,238 11,265
Prepaid expenses 585,654 479,959
Receivable from related parties 561,453 -
Deferred employment contract expense - 350,000
--------------------------------
1,871,933 2,979,697
Mineral Properties and Development
Claims and options 2,326,971 2,327,025
Deferred exploration and development expenditures 12,455,168 11,286,816
--------------------------------
14,782,139 13,613,841
Less accumulated amortization (1,384,338) (1,384,338)
--------------------------------
13,397,801 12,229,503
Building, Plant and Equipment 3,325,196 3,503,182
Deferred Financing Fees (net of amortization of $105,638, 1996 - $87,038) 80,362 98,962
--------------------------------
$ 18,675,292 $ 18,811,344
--------------------------------
--------------------------------
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued liabilities (Note 4) $ 367,475 $ 351,154
Loans payable secured by gold inventory - 66,511
Current portion of mineral claims payable 59,000 179,000
Capital lease obligations - current 47,784 64,939
--------------------------------
474,259 661,604
Long Term Liabilities
Capital lease obligations 92,214 92,214
Convertible debenture (Note 6) 2,000,000 2,000,000
--------------------------------
2,092,214 2,092,214
Shareholders' Equity
Share capital (Note 5)
Authorized: 100,000,000 common shares
Issued and outstanding: May 31, 1997 - 64,151,493 shares 40,860,811 38,506,711
November 30, 1996 - 56,406,493 shares
Capital surplus - 46,352
Deficit (24,751,992) (22,495,537)
--------------------------------
16,108,819 16,057,526
--------------------------------
$ 18,675,292 $ 18,811,344
--------------------------------
--------------------------------
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND ACCUMULATED DEFICIT
EXPRESSED IN U.S. DOLLARS
SIX MONTHS ENDED
MAY 31 MAY 31
1997 1996
---------------------------------
Revenue from gold sales $ 77,482 $ 98,648
Less Mining and processing costs 44,835 79,118
---------------------------------
Income from Operations 32,647 19,530
Administrative Expenditures 1,225,682 801,381
Employment contract expense (Note 5c) 1,063,420 1,656,778
---------------------------------
Loss for the period (2,256,455) (2,438,629)
Accumulated deficit at beginning of period (22,495,537) (18,165,277)
---------------------------------
Accumulated deficit at end of period $ (24,751,992) $ (20,603,906)
---------------------------------
---------------------------------
Loss per share $ (0.039) $ (0.060)
---------------------------------
---------------------------------
See accompanying notes to consolidated financial statements
<PAGE>
SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
EXPRESSED IN U.S. DOLLARS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31 MAY 31
1997 1996
------------------------------
<S> <C> <C>
CASH PROVIDED BY (USED FOR):
Operations:
Loss for the period $ (2,256,455) $ (2,438,629)
Items not involving cash:
Employment contract expense 1,063,420 1,656,778
Depreciation 233,331 100,281
Amortization of deferred financing fees 18,600 18,600
Changes in non-cash operating working capital:
Increase in accounts receivable (3,973) (7,255)
Increase in receivable from related parties (561,453) -
Decrease in gold inventory 44,129 79,118
Decrease (increase) in prepaid expenses (105,695) 40,490
Increase (decrease) in accounts payable and accrued liabilities 50,179 (150,531)
------------------------------
(1,517,917) (701,148)
Financing:
Shares issued for cash 1,560,470 2,830,000
Increase in unsecured loan - 100,000
Decrease in loans payable secured by gold inventory (66,511) (36,516)
Decrease in payable to related parties - (829,723)
Decrease in mineral claims payable (120,000) (211,000)
Decrease in capital lease obligation (17,155) (84,173)
------------------------------
1,356,804 1,768,588
Investments:
Mineral claims and options 54 (60,000)
Deferred exploration and development expenditures (1,168,352) (301,014)
Purchases of equipment (55,345) (3,413)
------------------------------
(1,223,643) (364,427)
Increase (decrease) in cash and cash equivalents (1,384,756) 703,013
Cash and cash equivalents at beginning of period 1,925,469 155,849
------------------------------
Cash and cash equivalents at end of the period $ 540,713 $ 858,862
------------------------------
------------------------------
Supplemental cash flow information
Interest paid $ 80,000 $ 80,000
------------------------------
------------------------------
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 1997
1. BASIS OF PRESENTATION
The financial information at May 31, 1997 and for the six month period
ended May 31, 1997 included herein is unaudited; however, such information
reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods. These consolidated financial
statements are presented in accordance with generally accepted accounting
principles in the United States. The results of operations for the six
month period ended May 31, 1997 are not necessarily indicative of the
results to be expected for the full year.
2. INVENTORIES
Gold inventory is valued at the lower of weighted average cost or estimated
net realizable value.
3. DEFERRED PRODUCTION EXPENDITURES
Costs associated with waste removal and preparation for gold recovery are
deferred and charged to production on a unit of production basis.
4. ACCOUNTS PAYABLE
Accounts payable and accrued liabilities consists of:
MAY 31, NOVEMBER 30,
1997 1996
---------- ----------
Accounts payable 194,548 118,858
Accrued interest 66,666 64,065
Accrued employment contract expense (Note 5c) 64,373 98,231
Accrued reclamation expenses 41,888 70,000
---------- ----------
$ 367,475 $ 351,154
---------- ----------
---------- ----------
5. SHARE CAPITAL
(a) INCREASE IN AUTHORIZED SHARES. At the Company's Annual General
Meeting of May 21, 1997, the shareholders approved an increase in the
Company's authorized shares from 75,000,000 shares to 100,000,000 shares.
(b) DIRECTORS OPTIONS. The Company has reserved 3,475,000 shares for
issuance, exercisable until August 14, 2004, in accordance with the terms
and conditions of its December 12, 1994, Stock Option Plan; and 450,000
shares for issuance, originally exercisable until June 1, 1997 but
subsequently extended to June 1, 2002, in accordance with the terms and
conditions of its June 1, 1992, Stock Option Plan.
<PAGE>
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 1997
(c) EMPLOYEE OPTIONS. From time to time, the Company issues options for
the purchase of common shares to selected part time Contract employees as
sole compensation for contracted services in accordance with the terms and
conditions of its April 20, 1994, Stock Option and Stock Bonus Plan. The
Company accounts for 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 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. The Company has reserved 1,029,750 shares for issuance,
exercisable until October 21, 1998, in accordance with the terms and
conditions of this plan.
(d) WARRANTS. The Company has reserved a total of 3,200,000 shares for
issuance with respect to a warrant for 600,000 shares exercisable until
March 6, 1998; a warrant for 2,000,000 shares exercisable until April 3,
1999; and a warrant for 600,000 shares exercisable until September 6, 1999.
(e) OTHER SHARE TRANSACTIONS. The Company has reserved 1,000,000 shares
for issuance upon the potential conversion of a convertible debenture, and
704,212 shares for issuance under the terms of its 14-for-13 forward stock
split of May 21, 1997. The Company has also reserved 1,100,000 shares with
respect to its outstanding offer to purchase the assets and liabilities of
Kintana Resources Ltd.
6. CONVERTIBLE DEBENTURE
In July, 1994, the Company issued an 8% convertible callable debenture
which 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 an original Conversion Price of
$2.00 U.S. per share (the "Conversion Price"), subsequently modified to
$1.857 as a result of the Company's 14/13 "forward stock split" approved
May 21, 1997. In addition, the Company may require the holder to convert
the debenture at the Conversion Price, in whole or in part, if the
average market price of the Company's shares has exceeded 125% of the
Conversion Price for a period of 20 consecutive trading days. Financing
fees paid related to the debenture have been deferred are being amortized
on a straight line basis over the five year term of the debenture.
7. COMMITMENTS AND CONTINGENCIES
The Company has 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.
<PAGE>
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 1997
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain factors which
have significantly affected the Company's financial position and operating
results during the period included in the accompanying condensed consolidated
financial statements.
SIX MONTHS 1997 V. 1996
Revenue during the first six months of 1997 was received from the on-going sale
of gold from the Company's existing gold inventory, though the majority of the
Company's cash was raised through equity funding of its activities by the
issuance of additional shares of its stock. Current liabilities decreased from
$661,604 to $474,259 primarily as a function of a reduction in the current
portion of mineral claims payable; while current assets decreased from
$2,979,697 to $1,871,933 as a function of the Company's continued commitment of
funds to its drilling and exploration programs on its Fairbanks, Alaska,
properties. Prepaid expenses remained relatively constant, representing
contractual payments to the Company's principal Alaska contractor to fund the
exploration and development work being conducted on the Company's properties
near Fairbanks. The Company's remaining long term liabilities consist primarily
of a $2,000,000 convertible debenture.
LIQUIDITY AND CAPITAL RESOURCES AT MAY 31, 1997
At May 31, 1997, the Company's cash position was reduced to $540,713 as it
continued to incur expenses in support of its active exploration and development
programs on its Fairbanks, Alaska, properties - primarily its Ester Dome Gold
Property where it drilled 30 new exploration holes. During the quarter, some
funds were received from sales of existing gold inventory, and additional funds
from shares issued in accordance with the provisions of Regulation "S". The
Company is continuing to focus its resources primarily upon the exploration and
development of its Fairbanks properties, principally the Ester Dome Gold Project
(see below). The Company plans to continue raising funds for this activity
through the development of additional equity, though it may consider a joint-
venture or similar arrangement with another company if it is advantageous for it
to do so.
RESULTS OF OPERATIONS
(a) ESTER DOME GOLD PROJECT
This is the Company's most active property, at present. At Ester Dome near
Fairbanks, Alaska, the Company is continuing to define the St. Paul Gold Deposit
through drilling and trenching programs and has completed drilling of 30 new
exploration holes, totaling 6,000 feet, in addition to the 20 holes it drilled
during the first quarter. Surface trenching has shown the St. Paul Gold Deposit
to be at least 3,000 feet long and open to extension in all directions. Detailed
drilling on a 700 foot long section of the deposit has shown intersections of 10
to 125 feet and average gold grades from 0.02 to 0.17 ounces per ton. The
Company intends to continue drilling this property for the purpose of proving-up
minable gold deposits which it can then put into production.
<PAGE>
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 1997
(d) CHATANIKA PROPERTY
This property, consisting of 774 mining claims and 24 prospecting sites, was
newly staked by the Company in late 1996 in response to aerial and ground
anomalies which it observed. The Company plans to commence evaluation of these
claims in 1997.
(c) NOLAN GOLD PROJECT
At the Nolan Gold Project in northern Alaska, the Company continued off-season
reclamation and maintenance activities as it continued to focus its primary
efforts, and resources, on its Fairbanks properties. However, it still plans to
continue further development of both its placer and lode deposits later in 1997.
(d) HAMMOND PROPERTY
This property, located adjacent to the Company's Nolan Gold Project in northern
Alaska, has a history of gold production which the Company plans to further
explore and define later in 1997 in conjunction with its activities on the Nolan
Gold Project.
OTHER INFORMATION
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS *
The Annual General Meeting of Shareholders was held on May 21, 1997. Results of
the voting were as follows:
<TABLE>
<CAPTION>
(a) ELECTION OF DIRECTORS IN FAVOR AGAINST WITHHELD
--------------------- -------- ------- --------
<S> <C> <C> <C> <C>
Garry L. Anselmo 46,930,559 17,050 437,069
K. Maxwell Fleming 47,098,319 17,050 274,309
James F. Dixon 47,105,319 17,050 267,309
(b) KPMG AS AUDITORS IN FAVOR AGAINST WITHHELD
---------------- -------- ------- --------
47,524,271 397,864 106,433
(c) CHANGE NAME TO SILVERADO GOLD MINES LTD. IN FAVOR AGAINST WITHHELD
---------------------------------------- -------- ------- --------
46,571,572 1,421,521 108,575
(d) FORWARD STOCK SPLIT IN FAVOR AGAINST WITHHELD
------------------- -------- ------- --------
36,097,728 2,956,585 399,290
(e) INCREASE AUTHORIZED SHARES TO 100,000,000 IN FAVOR AGAINST WITHHELD
----------------------------------------- -------- ------- --------
35,151,526 3,813,082 445,325
(f) EMPLOYMENT SEVERANCE AGREEMENT WITH IN FAVOR AGAINST WITHHELD
----------------------------------- -------- ------- --------
GARRY L. ANSELMO
15,092,068 4,854,548 428,760
<PAGE>
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 1997
(g) AMEND ARTICLES RE BUSINESS COMBINATIONS IN FAVOR AGAINST WITHHELD
--------------------------------------- -------- ------- --------
16,355,270 3,195,560 628,173
(h) AMEND ARTICLES RE CERTAIN COMPANY IN FAVOR AGAINST WITHHELD
--------------------------------- -------- ------- --------
PURCHASES OF STOCK 15,826,479 3,698,601 624,073
------------------
(i) AMEND THE 1994 STOCK OPTION PLAN IN FAVOR AGAINST WITHHELD
-------------------------------- -------- ------- --------
14,491,207 4,308,329 461,573
</TABLE>
* 14,723,575 Shares Not Voted
ITEM 5 OTHER INFORMATION.
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 3(i)(b) Articles of Amendment filed herewith.
- ------------------------------------------------------------------------------
Pursuant to the requirements 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 GOLD MINES LTD.
/s/ G.L. Anselmo
G.L. Anselmo
President / CEO / CFO
<PAGE>
FORM 20
(Section 371)
Certificate of
Incorporation No. 57,126
COMPANY ACT
ORDINARY RESOLUTION
The following ordinary resolution was passed by the undermentioned company
on the date stated:
Name of company: SILVERADO MINES LTD.
Date resolution passed: MAY 21, 1997
Resolution [see note (a)]:
"Resolved, as an Ordinary Resolution, that the Memorandum of the Company be
altered by increasing the authorized capital from 80,769,230 shares without
par value to 100,000,000 shares without par value."
THE MEMORANDUM AS ALTERED IS ATTACHED AS SCHEDULE A.
Certified a true copy May 21, 1997.
/s/ Stuart B. Morrow
--------------------
Signature
Company Solicitor
---------------------------
Relationship to the Company
Note:
(a) Insert text of ordinary resolution.
(b) See section 1(1) for definition of "ordinary resolution".
<PAGE>
SCHEDULE A
ATTACHED TO THE ORDINARY RESOLUTION DATED MAY 21, 1997
OF SILVERADO MINES LTD.
COMPANY ACT
------
MEMORANDUM
(Altered)
OF
SILVERADO GOLD MINES LTD.
1. The name of the company is "SILVERADO GOLD MINES LTD."
2. The Company is restricted from carrying on all businesses except the
following:
(a) To acquire by purchase, lease, hire, discovery, location or otherwise,
and hold mines, mineral claims, mineral leases, mining lands,
prospects, licenses and mining rights of every description, and to
work, develop, operate, turn to account, sell, or otherwise dispose
thereof.
(b) To dig, drill, or bore for, raise crush, wash, smelt, reduce, refine,
amalgamate, assay, analyse, and otherwise treat gold, silver, copper,
lead, iron, coal, petroleum, natural gas, and any other ore, deposit,
metal, or mineral whatsoever, whether belonging to the Company or not,
and to render the same merchantable, and to buy, sell, and deal in the
same or any product thereof.
(c) To engage in any branch of mining, smelting, milling, and refining
minerals.
(d) To acquire by purchase, lease, hire, exchange, or otherwise timber
lands, leases, or claims, rights to cut timber, surface rights and
rights-of-way, water rights and privileges, patents, patent rights and
concessions, and other real or personal property.
(e) To acquire by purchase, lease, hire, exchange, or otherwise, and to
construct, operate, maintain, or alter, trails, roads, ways, tramways,
reservoirs, dams, flumes, race and other ways, water-courses, canals,
aqueducts, pipe-lines, wells, tanks, bridges, wharves, piers, mills,
pumping plants, factories, foundries, furnaces, coke-ovens, crushing
works, smelting-works, concentrating works, refining works, hydraulic,
electrical, and other works and appliances, power devices and plants
of every kind, laboratories, warehouses, boarding houses, dwellings,
buildings, machinery, plant, and other works and conveniences, and to
buy, sell, manufacture, and deal in all kinds of goods, stores,
provisions, implements, chattels, and effects.
<PAGE>
-2-
(f) To build, purchase, lease, hire, charter, navigate, use and operate
cars, wagons, and other vehicles, boats, ships, and other vessels.
(g) To sell or otherwise dispose of ore, metal, oil, gas, or mineral
product, and to take contracts for mining work of all kinds, and to
accept as the consideration shares, stock, debentures, or other
securities of any limited company, whatsoever incorporated and
carrying on any business, directly or indirectly, conductive to the
objects of a specially limited company, if such shares (except the
shares of a company having non-personal liability), stock, debentures,
or other securities are fully paid up, and to sell or to otherwise
dispose thereof.
3. The authorized capital of the Company consists of 100,000,000 shares
without par value.
<PAGE>
-1-
FORM 19
(Section 371)
Certificate of
Incorporation No. 57,126
COMPANY ACT
SPECIAL RESOLUTION
The following special resolution was passed by the undermentioned company
on the date stated:
Name of company: SILVERADO MINES LTD.
Date resolution passed: MAY 21, 1997
Resolution:
1. Resolved, as a Special Resolution, that the Memorandum of the Company be
altered by changing the Company's name to "Silverado Gold Mines Ltd".
2. Resolved, as a Special Resolution, that the Memorandum of the Company be
altered by subdividing all of the 75,000,000 shares without par value in
the capital the Company into 80,769,230 shares without par value, each 13
shares being subdivided into 14 shares.
3. Resolved, as a Special Resolution, that the Company's Articles be altered
by the addition of new Parts 20 and 21 in the form set out in Schedule A
attaching to and forming a part of this resolution.
4. Resolved, as a Special Resolution, that the Company's Articles be altered
by repealing and replacing the existing sections 6.1 and 6.2, and by the
addition of new Part 22 in the form set out in Schedule B attaching to and
forming a part of this resolution.
THE MEMORANDUM AS ALTERED IS ATTACHED AS SCHEDULE C
Certified a true copy May 21, 1997.
/s/ Stuart B. Morrow
-----------------------
(Signature)
Company Solicitor
-----------------------
Relationship to Company
<PAGE>
SILVERADO MINES LTD.
Schedule A attaching to Special Resolutions (Form 21) dated May 21, 1997
PART 20 CERTAIN BUSINESS COMBINATIONS
20.1 The Company may not consummate a "Business Combination" with any
"Interested Shareholder" for a period of three years following the date
that such member became an Interested Shareholder unless the Business
Combination:
a. (i) is approved by the holders of a majority of the outstanding
voting shares of the Company held by members other than
Interested Shareholders; or
(ii) is approved by a majority of the Board of Directors who are
not Interested Shareholders and who were members of the
Board of Directors prior to the time that the Interested
Shareholder became an Interested Shareholder; and
b. is made at a price per share which is no less than the higher of
(i) the price offered in any tender offer, as defined by rules of
the Securities and Exchange Commission ("SEC"), in which any
Interested Shareholder participated, or (ii) the average of the
closing sale price of the Company's shares as reported by NASDAQ
during the period of six years immediately preceding the Business
Combination.
A "Business Combination" means merger, asset sale, acquisition,
disposition, or any other transaction involving assets or
consideration with a value equal to at least 10% of the Company's
net worth, determined by the Company's most recent audited balance
sheet.
An "Interested Shareholder" means a person who:
(i) announces or publicly discloses a plan or intention to
become the beneficial owner of voting shares of the Company
representing ten percent or more of the Company's
outstanding voting shares; or
(ii) at any time within the three year period immediately prior
to the date in question beneficially owned ten percent or
more of the Company's outstanding voting shares; or
(iii) is an affiliate or associate (within the meaning of those
terms in the Company Act of British Columbia) of the
foregoing.
20.2 This Part 20 may not be repealed, amended or modified except with the
approval of the greater of:
a. 75% of votes cast in person or by proxy at a general meeting; or
<PAGE>
-2-
b. the holders of a majority of the Company's outstanding voting
shares held by members other than Interested Shareholders.
PART 21 EQUAL TREATMENT OF MEMBERS
21.1 No bidder shall make a tender offer to members unless:
a. the tender offer is open to all members of the class of securities
subject to the tender offer; and
b. the consideration paid to any member pursuant to the tender offer
is the highest consideration paid to any other member during such
tender offer.
21.2 This Part 21 may not be repealed, amended or modified except with the
approval of the greater of:
a. 75% of votes cast in person or by proxy at a general meeting; or
b. the holders of a majority of the Company's outstanding voting
shares held by members other than Interested Shareholders.
<PAGE>
SILVERADO MINES LTD.
Schedule B attaching to Special Resolutions (Form 21) dated May 21, 1997
PART 6 PURCHASE AND REDEMPTION OF SHARES
6.1 Subject to Part 22, the Company may purchase any of its shares unless the
special rights and restrictions attached thereto otherwise provide.
6.2 Subject to Part 22, if the Company proposes to redeem some but not all of
the shares of any class, the Directors may, subject to the special rights
and restrictions attached to such class of shares, decide the manner in
which the shares to be redeemed are to be selected.
PART 22 CERTAIN COMPANY PURCHASES OF STOCK
22.1 The Company may not purchase any shares of the Company's voting shares,
or any securities which are convertible into shares of the Company's
voting shares, from any "Interested Shareholder" for a period of three
years following the date that such member became an Interested
Shareholder unless the purchase of such shares:
a. (i) is approved by the holders of a majority of the outstanding
voting shares of the Company held by members other than
Interested Shareholders; or
(ii) is approved by a majority of the Board of Directors who are
not Interested Shareholders and who were members of the
Board of Directors prior to the time that the Interested
Shareholder became an Interested Shareholder; and
b. is made at a price per share which is not in excess of the average
of the closing bid price of the Company's shares as reported by
NASDAQ during the period of six years immediately preceding the
date the Interested Shareholder became an Interested Shareholder.
22.2 An "Interested Shareholder" means a person who:
a. announces or publicly discloses a plan or intention to become the
beneficial owner of voting shares of the Company representing ten
percent or more of the Company's outstanding voting shares; or
b. at any time within the three year period immediately prior to the
date in question beneficially owned ten percent or more of the
Company's outstanding voting shares; or
c. is an affiliate or associate (within the meaning of those terms in
the Company Act of British Columbia) of the foregoing.
<PAGE>
-2-
22.3 This Part 22 shall not apply to any convertible security outstanding
prior to the date of the adoption of this Part 22 nor to any security
issued pursuant to any stock option or bonus plan or other compensatory
plan or arrangement which is in effect on the date this Part 22 is
approved by the members of the Company.
22.4 This Part 22 may not be repealed, amended or modified except with the
approval of a majority of the Company's outstanding voting shares held by
members other than Interested Shareholders.
<PAGE>
SCHEDULE C
ATTACHED TO THE SPECIAL RESOLUTION DATED MAY 21, 1997
OF SILVERADO GOLD MINES LTD.
COMPANY ACT
------
MEMORANDUM
(Altered)
OF
SILVERADO GOLD MINES LTD.
1. The name of the company is "SILVERADO GOLD MINES LTD."
2. The Company is restricted from carrying on all businesses except the
following:
(a) To acquire by purchase, lease, hire, discovery, location or
otherwise, and hold mines, mineral claims, mineral leases, mining
lands, prospects, licenses and mining rights of every description,
and to work, develop, operate, turn to account, sell, or otherwise
dispose thereof.
(b) To dig, drill, or bore for, raise crush, wash, smelt, reduce,
refine, amalgamate, assay, analyse, and otherwise treat gold,
silver, copper, lead, iron, coal, petroleum, natural gas, and any
other ore, deposit, metal, or mineral whatsoever, whether
belonging to the Company or not, and to render the same
merchantable, and to buy, sell, and deal in the same or any
product thereof.
(c) To engage in any branch of mining, smelting, milling, and refining
minerals.
(d) To acquire by purchase, lease, hire, exchange, or otherwise timber
lands, leases, or claims, rights to cut timber, surface rights and
rights-of-way, water rights and privileges, patents, patent rights
and concessions, and other real or personal property.
(e) To acquire by purchase, lease, hire, exchange, or otherwise, and
to construct, operate, maintain, or alter, trails, roads, ways,
tramways, reservoirs, dams, flumes, race and other ways,
water-courses, canals, aqueducts, pipe-lines, wells, tanks,
bridges, wharves, piers, mills, pumping plants, factories,
foundries, furnaces, coke-ovens, crushing works, smelting-works,
concentrating works, refining works, hydraulic, electrical, and
other works and appliances, power devices and plants of every
kind, laboratories, warehouses, boarding houses, dwellings,
buildings, machinery, plant, and other works and conveniences, and
to buy, sell, manufacture, and deal in all kinds of goods, stores,
provisions, implements, chattels, and effects.
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(f) To build, purchase, lease, hire, charter, navigate, use and
operate cars, wagons, and other vehicles, boats, ships, and other
vessels.
(g) To sell or otherwise dispose of ore, metal, oil, gas, or mineral
product, and to take contracts for mining work of all kinds, and
to accept as the consideration shares, stock, debentures, or other
securities of any limited company, whatsoever incorporated and
carrying on any business, directly or indirectly, conductive to
the objects of a specially limited company, if such shares (except
the shares of a company having non-personal liability), stock,
debentures, or other securities are fully paid up, and to sell or
to otherwise dispose thereof.
3. The authorized capital of the Company consists of 80,769,230 shares
without par value.
