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MADISON ENTERPRISES CORP.
(the "Company")
MANAGEMENT DISCUSSION FOR MT. KARE PROPERTY During the quarter ended July 31, 1999, the Company reached an agreement with its joint venture partner, Carpenter Pacific Resources NL (“Carpenter”), to acquire from Carpenter all of Carpenter’s 25% indirect interest in the Mt. Kare Joint Venture. This acquisition will be effected by the sale to the Company of all of the issued shares of two Carpenter subsidiaries, Frontier Mining & Exploration NL and Oakland Limited and will result in the Company owning an effective 90% interest in the Mt. Kare property. The remaining 10% interest will be held in trust by the Company for the Mt. Kare landowners. The purchase price for Carpenter’s 25% interest will be satisfied by the issuance of 10,000,000 shares of the Company and 3,175,000 three year share purchase options exercisable at $1.00 for two years and at $1.50 in the third year. This acquisition is subject to the completion of formal documentation and all necessary shareholder and regulatory approvals. The Company has convened an extraordinary general meeting of its shareholders to be held October 15, 1999 in order to obtain shareholder approval to the acquisition. The Company believes the consolidation of ownership of Mt. Kare will enhance the overall value of the project and facilitate financing to enable the Company to vigorously pursue its ongoing exploration of Mt. Kare. During the period drilling on the Mt. Kare property was directed at expanding, infilling and increasing confidence in the initial resource estimate prepared by Watts, Griffis & McOuat which, at a 1.0 g/t gold equivalent cut-off, was:
The initial resource estimate was released November 26, 1998 and included up to hole 110. The Company has since drilled 106 additional holes and is presently carrying out a property wide data compilation, three dimensional resource modelling and metallurgical testwork in preparation for an update by Watts, Griffis & McOuat of the initial resource estimate and the next phase of drilling. CAPITAL STOCK The Company did not issue any securities during the period. LIQUIDITY AND CAPITAL RESOURCES The Company’s mineral exploration activities have been funded through the sale of share capital and the Company expects that it will continue to be able to utilize this source of financing until it develops cash flow from its operations. There is no assurance that such financing can be obtained by the Company and the failure to obtain such financing will result in the curtailment of exploration activities until such financing is obtained. The Company may require additional financing during the upcoming fiscal year to maintain its previous pace of exploration. Other than as discussed herein, the Company is not aware of any trends, demands, commitments, event or uncertainties that may result in its liquidity either materially increasing or decreasing at present or in the foreseeable future. Material increases or decreases in the Company’s liquidity will be substantially determined by the success or failure of the exploration work currently being carried out on its Mt. Kare property as well as by the success or failure of its exploration programs on its other mineral property. The Company handles investor relations activities by assigning various duties to officers, directors, employees and consultants. These duties consist primarily of responding to enquiries from the Company’s shareholders and the public, distribution of news and information about the Company and other developments in the mining industry, preparation for and attendance at industry conferences, maintenance of web sites on the Internet, increasing the Company’s shareholder base and assisting in raising any capital which the Company might require. YEAR 2000 ISSUES The Company remains committed to ensuring that all its geological, mineral, accounting and corporate data are adequately protected and available for management analysis and reporting. To that end, management monitors computer software and hardware performance for maximum efficiency and cost effectiveness. The Company has identified each of its computer software and hardware components, which have been purchased within the past year, and is testing and confirming with the manufacturers and suppliers that all components are capable of functioning properly into the year 2000 and beyond. Those components that do not comply, none of which are critical to the operation of the Company, will be upgraded and tested to ensure their ability to function into the year 2000 and beyond. The Company has not identified any significant supplier or machinery upon which it is reliant that is unlikely to function due to computer chip or software incompatibility with the year 2000. |
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