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Welcome to this update on Madison Enterprises, now Madison Minerals, Ltd.,  (MMR-V; MMRSF -OTC), a junior exploration company focusing on the discovery of gold and silver. For those of you not even vaguely familiar with Madison, I’d suggest going to their website at www.madisonminerals.com because it is there that you will acquire a plethora of information regarding the company and it’s projects (the old website was www.madison-enterprises.com).

Madison Minerals is under the umbrella of Mine-tech, a larger company based in Vancouver, British Columbia, which has several other excellent exploration companies in its portfolio. The management team is seasoned, principled, and has many exploration successes under their belt dating back some 20 odd years. Currently Mine-Tech has properties with enormous potential in several different parts of the globe. Some of that potential has already been realized and yet it would appear that they are on the cusp of realizing ever so much more.

Madison Has Two Superbly Placed Exploration Projects currently under development.

One is the Mt. Kare project in Papua New Guinea (PNG) where successful exploration has been progressing for approximately eight years. It is an extraordinarily compelling story. Rarely do you find a junior exploration company having in excess of 1.8 million ounces of gold and over 20 million ounces of silver in its portfolio. That is exactly what Madison has discovered at Mt. Kare according to a resource calculation computed by an independent and well respected Canadian engineering firm, Watts, Griffis, and McOuat, (Press release of March 19, 2004). They have continued work on the project and in the latter half of 2004 have made some additional discoveries that can only be described as excellent.  Mt. Kare is directly contiguous to Placer Dome’s Porgera property where over 800,000 ounces of gold were mined in 2003. The geology of the two properties is eerily similar and one can only conclude that better things, much better things are yet to come.

Madison's other exploration project is the F.W. Lewis Property located in Lander County, Nevada. Madison is planning to resume exploration activities, including additional drilling, at the Lewis Property in mid-November of 2004. We should not lose sight of the fact that the Nevada property is contiguous to Newmont’s Phoenix-Fortitude Complex where millions of ounces of gold and silver have already been mined and where there is an additional resource of 6,000,000 ounces of gold.

Succinctly put, Madison is controlling two properties in two totally different parts of the world and those properties have enormous potential because they not only stand on their own merits but because they also abut two very successful properties controlled by senior mining companies.  

The Long and Short of it from the Technical side

I could sit here for hours and reel off a string of figures, anomalies, similar structural trends and so on till we are blue in the face and the eyes glaze over. Again, please consider visiting Madison’s Web site and reading the press releases from the last six months. I believe you will glean the essence of the progress on both properties. Mt. Kare is where the focus has recently been placed and so that is where you’ll find the emphasis.

However, truth be told, I am not a geologist but I have been in very close contact with the geologists on the projects along with the project engineer for the past six months. I know for a fact that the progress being made is as exciting as any in the industry. After all, PNG has five or six of the world’s most productive gold mines and Madison is located literally smack-dab in the middle of these discoveries.

Rather than cite chapter and verse, I am going to list seven things of which you should be aware; again this is on the technical side and most of these points pertain to Mt. Kare.

1. An extensive (30 kilometers plus!) “IP” (Induced Polarization) program has been completed with much success

2. A corresponding trenching program has been completed that has been terrifically successful

3. The target area of known mineralization has recently been increased threefold at Mt. Kare in Papua New Guinea 

4. A completely new gold zone has been discovered at Mt. Kare

5. Madison is proposing a one for five reverse split with a $5 million dollar financing to immediately follow

6. After the consolidation and financing, drilling will commence at Mt. Kare, the proposed date to be in mid-November. High potential targets have already been identified so there will be no “lag time”. Madison will “hit the ground running” as the work has already been completed to identify said targets.

7. Work will simultaneously begin again at the Lewis property in Nevada where outstanding results have already been established.

Item #4: The New High-Grade Gold Discovery at Mt. Kare

Before we go any further, I have to say that when the news about the new high-grade gold zone that was recently discovered at Mt. Kare was announced, I became quite encouraged. (Madison Press Release dated September 1, 2004). For a trench-testing program to return grades as high as 17.2 g/t and 150 g/t silver over 4.2 meters is an exciting discovery. When you combine those results with the fact that other nearby pit samples returned values of up to 15.5 g/t gold, and the excitement really begins to take hold.  The future appears to be so much more positive because of these excellent results and that is why I feel in the long run, this is going to work out quite well for shareholders.  Of course these areas will be further tested by a drilling program and one could reasonably consider the possibility that the news will eventually be even more positive. Nothing is guaranteed in this business and that is why it is best to take a guarded, cautiously optimistic approach.

Please consider that only quite recently the target area of known mineralization at Mt. Kare has tripled from what had previously been recognized. Then consider the fact that Madison’s latest IP survey shows that the geophysical trend remains open to considerable further expansion to the south as well as northward towards, and within, the extensive Pinuni Creek structural corridor. We begin to realize the expansiveness of this project and the endless possibilities. The results from the most recent drill program that was announced in mid-September was again very encouraging because two out of five holes is a 40% success rate and that “ain’t too shabby” regardless of where you are drilling.  This particular section of the property where the most recent drilling occurred holds extraordinary potential. There are many additional positives which are just beginning to manifest themselves after eight years of hard work.

Inquiring Minds Want to Know!

Remember that saying from some tabloid newspaper? Well it applies to all of us because we want to know both the story and the story behind the story, I think what people really want to know is the commitment of management to seeing these projects through to their logical conclusions. I can assure you the commitment is of the highest caliber. After ten years at Mt. Kare, dozens of hurdles already circumvented, and $33,000,000 already spent, one can only suppose that this management team wants to see this project through to its profitable conclusion. To view it any other way would be to misinterpret the facts of the matter.

These last six or eight months have been a trying time for the junior gold exploration companies and for gold in particular. We cannot lose sight of the fact that the 2004 US Presidential election has played its own unique role in affecting the precious metals markets. Once those elections are behind us, I personally believe that there are significant indications that gold could really “take off”. Isn’t that what we’ve been waiting for? When gold begins to substantially appreciate in price, the juniors should also appreciate, and the argument could be made that the investment scenario will be similar to the “dot-com” environment of 2000.

Choose your investments wisely and listen to only your most trusted advisors. There will be a lot of coal mixed in with the diamonds (in this case gold and silver), and as always, when a market heats up, the “Johnny come latelys” have “got a deal for you”.  Always review the history of the company, the management team, the geologists involved and then, and only then, examine the details of the project. Follow these guidelines and it should be apparent to you that this team at Madison, and these projects are worthy of your inquiring mind. You will also have a template with which to judge other worth while exploration projects revolving around the precious metals.

The Consolidation of Shares has been Approved by the Shareholders.

I think it only fair to briefly discuss the consolidation issue because there are always misconceptions about these types of matters, and quite honestly it has been a major topic of conversation. The consolidation was approved by a 90% vote.

Please remember that reverse splits or consolidations are not universally negative situations. Understandably, Madison shareholders had their own particular travails to overcome with regard to this matter. The one for five consolidation was not something that Madison’s senior management wanted, and it was certainly not a benefit to them personally. It was an action mandated by the markets and by how the gold environment evolved over these past five years. In actuality it was a way of protecting their very valuable assets; of course I’m talking about Mt. Kare in PNG and the Lewis Property in Nevada.  

Historically speaking, any junior gold exploration company that managed to get through that extended and horrendous 20 year bear market in gold in one piece is to be commended. Madison not only survived but actually advanced their projects. We have to keep that in mind and give the company credit for the accomplishment.

Of course the consolidation caused consternation among all parties concerned: shareholders and management alike. Don’t ever forget that management took just as much of a “hit” as did shareholders. Their options, as well as the shares they hold, are being rolled back on a one for five basis and then those options become five times as expensive. For example, 100 stock options become 20 options and if they were previously$.20 each, they become $1.00 each. So please do not be under the mistaken impression that management benefits from this course of action. In many ways it would have been easier to do nothing. This course of action will ultimately be of great benefit to all those involved with the company.

Management is looking after the company’s assets and shareholder’s best interest. In the long term, I personally and firmly believe that if you stay the course, you will not be unhappy. Again, precedents are often broken and roll backs are not always negative. In fact, sometimes they can produce positive developments and I believe this will be the case in this instance.

Why? The main reason is because they have two excellent properties from which to launch further explorations. Another is because they’ve already spent $33,000,000 on Mt. Kare alone and will now have the financial wherewithal to return to that particular property and increase the scope of their exploration.  Simultaneously the company will also have the financial resources be able to return to the Lewis Property in Nevada and continue on exploring this exciting project. This will all be done in a gold environment that appears to be appreciating. In other words, this consolidation allows the company to aggressively move forward and in this gold environment, that could prove more valuable than one could possibly imagine.

In Summary, The Reasons for the Consolidation Were as Follows:

1. To make the company financially stronger

2. To “tighten up” Madison’s stock in the market so there are less shares outstanding.

3. To create an environment for an immediate and subsequent financing to occur at more realistic levels; levels that are more in line with the appreciating assets of the company’s projects in PNG and Nevada.

4. To create an environment in which it is possible to aggressively move these projects forward thereby proving up more ounces in the ground and more value for the company and its shareholders

5. To put all of these elements together in a way that will make the company receptive to the benefits of this long term bull market in gold that is currently unfolding

Ultimately, we must realize that this consolidation of shares was about positioning Madison so it can acquire adequate funding in order to advance the exploration on both properties that it controls. Now that it has been completed

Conclusions

It’s an exciting new day for Madison Minerals.

The company has just transcended some tedious obstacles. It was a difficult but necessary process. The actions taken were in the best interests of the company and its shareholders. Their two properties are “world class” in the sense that they both have the potential for multi-million ounce deposits of gold and silver, that case already having been proven at Mt. Kare. These factors come together to create a positive future dynamic for Madison that is second to none. And don’t for a minute lose sight of the fact that their management team is professional, seasoned, and dedicated.

Remember that in one of their most recent press releases, the company indicated that they were ready to begin drilling at Mt. Kare almost immediately upon completion of the consolidation? That is because the drill targets have already been identified. Over the past six months the ground work has been laid. Hundreds of thousands of dollars have been spent to identify those targets. That facilitates the commencing of a drill program as soon as this next financing occurs. That financing is occurring because of the consolidation. All of these things fit together hand in glove. All of that ground work is about to bear fruit. Stay the course because the future for junior exploration companies in general and Madison Minerals in particular, is looking so much brighter as the environment for gold grows more positive by the week.

Best regards,

Stewart Armstrong

Consultant to Madison Minerals