|                |                                                                                                    
|--------------- | ---------------------------------------------------------------------------------------------------
|[letter001.jpg] | info@madisonminerals.com
        www.madisonminerals.com
        TSX.V  MMR
        OTC.BB - MMRSF





2000-1055 West Hastings Street, Vancouver, B.C. V6E 2E9 Canada          T.604.331.8772    F.604.331.8773   Toll Free 1.877.529.8475





|              |         
|------------- | --------
|March 3, 2008 | BY EDGAR



U.S. Securities and Exchange Commission

Document Control, Room 1004

Judiciary Plaza Office Building

450 Fifth Street, N.W.

Washington, D.C.

U.S.A. 20549



Dear Sir or Madam:



Re:                  Form 20-F Annual Report - Commission File Number 0-29250



Please find enclosed for filing, pursuant to the Securities and Exchange Act of 1934, as amended from time to time, Madisons Annual Report on Form 20-F for its October 31, 2007 fiscal year end, including exhibits.



Please do not hesitate to call me if you have any questions or comments regarding this matter.



Yours Truly,



MADISON MINERALS INC.



Ian Brown



per:

Ian Brown

Chief Financial Officer



IB/sh



cc:

Davidson & Company, Attn: D. Harris

Miller Thomson LLP, Attn: Rupert Legge

Standard & Poors Corporation (3 copies)

OTCBB Filings, Attn.: Pam Morris





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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,  D.C.  20549





FORM 20-F



(Mark One)







REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934



or



X

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended

October 31, 2007



or





TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or





SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





Date of event requiring this shell company report ___________________________



For the transition period from ___________________ to ______________________





Commission file number:

0-29250





|                                                                       
|-----------------------------------------------------------------------
|Madison Minerals Inc.                                                  
|(Exact name of Company as specified in its charter)                    
|                                                                       
|                                                                       
|Not applicable                                                         
|(Translation of Companys name into English)                           
|                                                                       
|                                                                       
|Province of British Columbia, Canada                                   
|(Jurisdiction of incorporation or organization)                        
|                                                                       
|                                                                       
|Suite 2000, 1055 West Hastings Street, Vancouver, B.C., Canada, V6E 2E9
|(Address of principal executive offices)                               





|                                       
|---------------------------------------
|Page 1 of 74 Pages                     
|The Exhibit Index is located on Page 73
|                                       
|                                       





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2



Securities registered or to be registered pursuant to Section 12(b) of the Act.



|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|                    |  |                                          
|None                |  |                                          





Securities registered or to be registered pursuant to Section 12(g) of the Act.



|                               
|-------------------------------
|Common Shares Without Par Value
|(Title of Class)               





Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.



|                
|----------------
|None            
|(Title of Class)





Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.



|          
|----------
|35,437,076
|          

Indicate by check mark whether the Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.



Yes ______  No X



Indicate by check mark whether the Company (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 Company 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 whether the Company is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.  (Check one):



Large accelerated filer ______  Accelerated filer ___________ Non-accelerated filerX



Indicate by check mark which financial statement item the Company has elected to follow.



Item 17 X  Item 18  _________



If this is an annual report, indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes _______  No X



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



---

3



Indicate by check mark whether the Company has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.



Yes ______  No ______  Not Applicable X



The information set forth in this Annual Report on Form 20-F is as at October 31, 2007 unless an earlier or later date is indicated.



Financial information is presented in accordance with accounting principles generally accepted in Canada.  Measurement differences between accounting principles generally accepted in Canada and in the United States, as applicable to the Company, are set forth in Item 5 of this Annual Report and in Note 16 to the accompanying Financial Statements of the Company.



Statements in this Annual Report regarding expected completion dates of feasibility studies, anticipated commencement dates of mining or metal production operations, projected quantities of future metal production and anticipated production rates, operating efficiencies, costs and expenditures are forward-looking statements.  Actual results could differ materially depending upon the availability of materials, equipment, required permits or approvals and financing, the occurrence of unusual weather or operating conditions, the accuracy of reserve estimates, lower than expected ore grades or the failure of equipment or processes to operate in accordance with specifications.  See Risk Factors for other factors that may affect the Companys future financial performance.



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4



SECURITIES AND EXCHANGE COMMISSION



FORM 20-F



TABLE OF CONTENTS







|                         |                                                                                                                                                                                                                                                                                                                   |         
|------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|                         |                                                                                                                                                                                                                                                                                                                   | Page No.
|GLOSSARY OF MINING TERMS | 8                                                                                                                                                                                                                                                                                                                
|                         |                                                                                                                                                                                                                                                                                                                   |         
|PART I                   |                                                                                                                                                                                                                                                                                                                   | 11      
|                         |                                                                                                                                                                                                                                                                                                                   |         
|ITEM 1.                  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                                                                                                                                                                                                                                                             | 11      
|                         |                                                                                                                                                                                                                                                                                                                   |         
|ITEM 2.                  | OFFER STATISTICS AND EXPECTED TIMETABLE                                                                                                                                                                                                                                                                           | 11      
|                         |                                                                                                                                                                                                                                                                                                                   |         
|ITEM 3.                  | KEY INFORMATION                                                                                                                                                                                                                                                                                                   | 11      
|                         |                                                                                                                                                                                                                                                                                                                   |         
|A.                       | Selected Financial Data                                                                                                                                                                                                                                                                                           | 11      
|B.                       | Capitalization and Indebtedness                                                                                                                                                                                                                                                                                   | 12      
|C.                       | Reasons For The Offer and Use of Proceeds                                                                                                                                                                                                                                                                         | 12      
|D.                       | Risk Factors                                                                                                                                                                                                                                                                                                      | 13      
|                         | Exploration Risks                                                                                                                                                                                                                                                                                                 | 13      
|                         | Title Matters                                                                                                                                                                                                                                                                                                     | 13      
|                         | Conflicts of Interest                                                                                                                                                                                                                                                                                             | 14      
|                         | Currency Fluctuations                                                                                                                                                                                                                                                                                             | 14      
|                         | Additional Funding Requirements                                                                                                                                                                                                                                                                                   | 14      
|                         | History of Net Losses; Accumulated Deficit; Lack of Revenue From Operations                                                                                                                                                                                                                                       | 14      
|                         | Limited Experience with Development-Stage Mining Operations                                                                                                                                                                                                                                                       | 15      
|                         | Stock Subject to Penny Stock Rules                                                                                                                                                                                                                                                                                | 15      
|                         | Competition                                                                                                                                                                                                                                                                                                       | 15      
|                         | Mineral Prices                                                                                                                                                                                                                                                                                                    | 15      
|                         | Foreign Countries and Regulatory Requirements                                                                                                                                                                                                                                                                     | 16      
|                         | Environmental and Other Regulatory Requirements                                                                                                                                                                                                                                                                   | 16      
|                         | Papua New Guinea Political Risks                                                                                                                                                                                                                                                                                  | 17      
|                         | Dividends                                                                                                                                                                                                                                                                                                         | 17      
|                         | Share Price Volatility; Price Fluctuations                                                                                                                                                                                                                                                                        | 17      
|                         | Companys Officers and Directors Resident Outside U.S.; Potential Unenforceability of Civil Liabilities and Judgements                                                                                                                                                                                            | 18      
|                         | If the Company is Unable to Successfully Develop and Subsequently Generate Sufficient Cash Flow from its Properties, the Company Could be Treated as a Passive Foreign Investment Company for U.S. Tax Purposes, Possibly Resulting in Additional Taxes to Its U.S. Stockholders and Less Liquidity for the Stock | 18      
|                         |                                                                                                                                                                                                                                                                                                                   |         
|ITEM 4.                  | INFORMATION ON THE COMPANY                                                                                                                                                                                                                                                                                        | 18      
|A.                       | History and Development of the Company                                                                                                                                                                                                                                                                            | 18      
|                         | Acquisition of the Mt. Kare Property, Papua New Guinea                                                                                                                                                                                                                                                            | 19      
|                         | Acquisition of the Belencillo Property, Panama                                                                                                                                                                                                                                                                    | 21      
|                         | Acquisition of the Lewis Property, Nevada                                                                                                                                                                                                                                                                         | 22      



---

5





|        |                                                                                           |   
|------- | ----------------------------------------------------------------------------------------- | --
|B.      | Business Overview                                                                         | 22
|C.      | Organizational Structure                                                                  | 24
|D.      | Property Plants and Equipment                                                             | 24
|        | Mt. Kare Property, Papua New Guinea                                                       | 25
|        | Title                                                                                     | 25
|        | Location, Access & Physiography                                                           | 27
|        | Plant and Equipment                                                                       | 28
|        | Exploration History                                                                       | 28
|        | Exploration - Recent Results                                                              | 29
|        | Regional and Local Geology                                                                | 30
|        | Mineralization                                                                            | 30
|        | Proposed Exploration  2008                                                               | 30
|        | Doing Business in Papua New Guinea                                                        | 30
|        | Lewis Property, Nevada                                                                    | 34
|        | Title                                                                                     | 34
|        | Location, Access & Physiography                                                           | 34
|        | Plant and Equipment                                                                       | 35
|        | Regional and Local Geology                                                                | 35
|        | Mineralization                                                                            | 36
|        | Exploration History                                                                       | 36
|        | Exploration - Recent Results                                                              | 38
|        |                                                                                           |   
|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                              | 39
|A.      | Operating Results                                                                         | 39
|        | Fiscal Year Ended October 31, 2007 Compared to Fiscal Year Ended
        October 31, 2006 | 40
|        | Fiscal Year Ended October 31, 2006 Compared to Fiscal Year Ended
        October 31, 2005 | 41
|        | Fiscal Year Ended October 31, 2005 Compared to Fiscal Year Ended
        October 31, 2004 | 41
|B.      | Liquidity and Capital Resources                                                           | 42
|        | October 31, 2007 Compared to October 31, 2006                                             | 42
|        | October 31, 2006 Compared to October 31, 2005                                             | 43
|        | October 31, 2005 Compared to October 31, 2004                                             | 43
|        | Material Differences between Canadian and U.S. Generally Accepted Accounting Principles   | 44
|        | Outlook                                                                                   | 44
|C.      | Research and Development, Patents and Licenses, etc.                                      | 44
|D.      | Trend Information                                                                         | 44
|E.      | Off-Balance Sheet Arrangements                                                            | 45
|F.      | Tabular Disclosure of Contractual Obligations                                             | 45
|        |                                                                                           |   
|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                                | 45
|A.      | Directors and Senior Management                                                           | 45
|B.      | Compensation                                                                              | 46
|        | Option Grants in Last Fiscal Year                                                         | 47
|        | Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values         | 47
|        | Defined Benefit or Actuarial Plan Disclosure                                              | 48
|        | Termination of Employment, Change in Responsibilities and Employment Contracts            | 48
|        | Directors                                                                                 | 48
|        | Securities Authorized For Issuance Under Equity Compensation Plans                        | 49
|C.      | Board Practices                                                                           | 49
|D.      | Employees                                                                                 | 50



---

6





|         |                                                            |   
|-------- | ---------------------------------------------------------- | --
|E.       | Share Ownership                                            | 50
|         |                                                            |   
|ITEM 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS          | 51
|A.       | Major Shareholders                                         | 51
|B.       | Related Party Transactions                                 | 51
|C.       | Interests of Experts and Counsel                           | 51
|         |                                                            |   
|ITEM 8.  | FINANCIAL INFORMATION                                      | 52
|A.       | Consolidated Statements and Other Financial Information    | 52
|B.       | Significant Changes                                        | 52
|         |                                                            |   
|ITEM 9.  | THE OFFER AND LISTING                                      | 52
|A.       | Offer and Listing Details                                  | 52
|B.       | Plan of Distribution                                       | 53
|C.       | Markets                                                    | 53
|D.       | Selling Stockholders                                       | 53
|E.       | Dilution                                                   | 53
|F.       | Expenses of the Issue                                      | 53
|         |                                                            |   
|ITEM 10. | ADDITIONAL INFORMATION                                     | 54
|A.       | Share Capital                                              | 54
|B.       | Memorandum and Articles of Association                     | 54
|C.       | Material Contracts                                         | 56
|D.       | Exchange Controls                                          | 56
|E.       | Taxation                                                   | 58
|         | Material Canadian Federal Income Tax Consequences          | 58
|         | Dividends                                                  | 58
|         | Capital Gains                                              | 59
|         | Material United States Federal Income Tax Consequences     | 59
|         | U.S. Holders                                               | 60
|         | Distributions on Common Shares of the Company              | 60
|         | Foreign Tax Credit                                         | 61
|         | Information Reporting and Backup Withholding               | 61
|         | Disposition of Common Shares of the Company                | 61
|         | Currency Exchange Gains or Losses                          | 62
|         | Other Considerations                                       | 62
|         | Foreign Personal Holding Company                           | 62
|         | Foreign Investment Company                                 | 62
|         | Passive Foreign Investment Company                         | 62
|         | Controlled Foreign Corporation                             | 63
|F.       | Dividends and Paying Agents                                | 64
|G.       | Statements by Experts                                      | 64
|H.       | Documents on Display                                       | 64
|I.       | Subsidiary Information                                     | 64
|         |                                                            |   
|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 64
|         |                                                            |   
|PART II  |                                                            | 65
|         |                                                            |   
|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES     | 65
|         |                                                            |   
|ITEM 13. | DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES               | 65
|         |                                                            |   
|         |                                                            |   



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7





|               |                                                                              |   
|-------------- | ---------------------------------------------------------------------------- | --
|ITEM 14.       | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 65
|               |                                                                              |   
|ITEM 15.       | CONTROLS AND PROCEDURES                                                      | 66
|               |                                                                              |   
|ITEM 16A.      | AUDIT COMMITTEE FINANCIAL EXPERT                                             | 66
|               |                                                                              |   
|ITEM 16B.      | CODE OF ETHICS                                                               | 66
|               |                                                                              |   
|ITEM 16C.      | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       | 66
|               |                                                                              |   
|ITEM 16D.      | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | 67
|               |                                                                              |   
|ITEM 16E.      | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       | 67
|               |                                                                              |   
|PART III       |                                                                              | 67
|               |                                                                              |   
|ITEM 17.       | FINANCIAL STATEMENTS                                                         | 67
|               |                                                                              |   
|ITEM 18.       | FINANCIAL STATEMENTS                                                         | 68
|               |                                                                              |   
|ITEM 19.       | EXHIBITS                                                                     | 68
|               |                                                                              |   
|SIGNATURES     | 70                                                                          
|               |                                                                             
|CERTIFICATIONS | 71                                                                          
|               |                                                                             
|EXHIBIT INDEX  | 73                                                                          



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8





GLOSSARY OF MINING TERMS



The following is a glossary of some of the terms used in the mining industry and referenced herein:



|                           |                                                                                                                                                                                                                                                                 
|-------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Allochthonous              | Rocks or materials which have formed at a different place than where they are currently found; having a foreign origin.                                                                                                                                         
|Alluvial                   | A general term for clay, silt, sand, gravel or similar unconsolidated detrital material deposited during comparatively recent geological time by a stream or other body of running water.                                                                       
|Alluvium                   | Detrital deposits created by streams on riverbeds, flood plains and alluvial fans.  A deposit of silty clay laid down, often during periods of flooding.                                                                                                        
|Argillite                  | A compact rock derived from mudstone or shale that is more highly indurated than either of these rocks.  Argillite also lacks the fissility of shale or the cleavage of slate.                                                                                  
|Arsenopyrite               | A tin-white or steel-gray orthorhombic mineral comprised of iron, arsenic and sulphur (FeAsS).  It commonly occurs in crystalline rocks as disseminations and within veins, often associated with lead and silver veins.  It is the principal ore of Arsenic.   
|Autochthonous              | Rocks or materials which are presently located in their place of origin.                                                                                                                                                                                        
|Bornite                    | A red-brown isometric mineral comprised of copper, iron and sulphur (Cu5FeS4).  Bornite readily tarnishes to iridescent blue or purple, often referred to as peacock ore.   It is an important Copper ore.                                                    
|Breccia                    | A general term applied to rock formations consisting mainly of angular fragments hosted by a fine-grained matrix.                                                                                                                                               
|Calcareous                 | The term calcareous, when applied to a rock name, implies that as much as 50% of the rock is comprised of calcium carbonate (Ca CO3).                                                                                                                           
|Chalcopyrite               | A bright brass-yellow tetragonal mineral comprised of copper, iron and sulphur (CuFeS2).  It commonly occurs as disseminations, veins and masses.  It is the principal ore of Copper.                                                                           
|Chargeability              | An electrical survey parameter identifying the conductive nature of geologic units subjected to an introduced electrical charge.  In geophysical survey methods, chargeability is most often a measure of sulphide content as well as differing geologic units. 
|Chert                      | A hard, dense, compact crytocrystalline sedimentary rock comprised chiefly of extremely fine grained interlocking crystals of quartz.  It displays a distinctive conchoidal fracture and occurs in a variety of colors.  The term flint is synonymous.          
|Coeval                     | A term applying to items having the same age or date of origin.                                                                                                                                                                                                 
|Colluvial                  | A general term applied to any loose, heterogenous and incoherent mass of soil material or rock fragments deposited chiefly by mass-wasting, usually at the base of a steep slope or cliff.                                                                      
|Comagmatic                 | Igneous rocks displaying a common set of chemical and mineralogical features.  As such, they are regarded as having derived from the same parent magma.                                                                                                         
|Conglomerate               | A coarse grained, clastic sedimentary rock composed of rounded to sub-angular fragments larger than 2 millimetres in diameter, within a fine grained matrix of sand or silt.  It is commonly cemented by calcium carbonate, iron oxide, silica or hardened clay.
|Dilatant
        structure | An increase in bulk volume during deformation, caused by a change from close packed structure to open-packed structure, accompanied by an increase in the pore volume.                                                                                          
|Diorite                    | A group of plutonic rocks intermediate in composition between acidic and basic.                                                                                                                                                                                 
|Drilling within solids     | Drilling within the 3D shape that defines the volumetric limits of a mineralised zone.                                                                                                                                                                          
|Dyke                       | A tabular body of igneous rock that cuts across the structure of adjacent rocks or cuts across massive rocks.  Due to its cross-cutting nature, it has clear implications regarding the timing of geologic events.                                              



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9





|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|----------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Epithermal                                      | Refers to a mineral deposit formed by precipitation of ore minerals in open spaces from watery fluids within about 1 kilometre of the earths surface and in the temperature range of 50° -200° C, occurring mainly as veins.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Feasibility Study                               | A detailed report showing the feasibility of placing a prospective ore body or deposit of the minerals within a mineral property into production, which report typically includes, inter alia, the specific portion or portions of the property that should be included, in a development block, conclusions and recommendations regarding any adjustments that should be made to the boundaries of a development block, a description of the work to be performed in order to develop the mineral resources within the development block and to construct a mine or mines and related facilities on the development block, the estimated capital and operating costs thereof, a proposed schedule for the timing of development and mine construction, and the information obtained and evaluations made in respect thereof.
|Galena                                          | A gray metallic mineral comprised of lead and sulphur (PbS).  It is distinguished by its, perfect cubic cleavage, relative softness and heaviness.   Galena occurs as disseminations, veins (often associated with silver) and occasionally masses.  It is the principal ore of Lead.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Gangue                                          | The valueless rock or mineral aggregates within an ore body that cannot be avoided during the mining process.  Gangue is not economically desirable material that is separated from the ore during the mine concentration process.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|g/t                                             | Grams per metric tonne.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|GPS Surveying                                   | Global Positioning System method of surveying.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Grade cutting                                   | Grade cutting indicates that assay values in excess of a defined grade are reduced to that defined grade or upper limit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Hydrothermal                                    | Of or pertaining to hot water, the action of hot water, or the products of such action including mineral deposition precipitated from a hot aqueous solution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Induced Polarization                            | A geophysical survey technique that measured various electrical properties.  This system introduces a strong electrical charge into the sub-surface and then measures its charging intensity and strength at various controlled stations over distance distribution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Karst                                           | A type of topography that is formed over limestone, dolomite, or gypsum by dissolution, and that is characterised by sinkholes, caves, and underground drainage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Magmatism                                       | Referring to the development and movement of magma, and its subsequent solidification into igneous rock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mesothermal                                     | Refers to a mineral deposit formed by precipitation of ore minerals in open spaces from watery fluids at considerable depth and in the temperature range of 200° - 300° C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Mineral Deposit or
        Mineralised Material | A mineralised body which has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metal(s).  Such a deposit does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries and other material factors conclude legal and economic feasibility.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Mineralization                                  | A natural aggregate of one or more metallic minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Ounces                                          | Troy ounces.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Plutonic                                        | Pertaining to igneous rocks formed at great depths by crystallisation of magma or chemical alteration.  These rocks are commonly coarse to medium grained and displaying a granitoid texture.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Pyrite                                          | A very common yellow isometric mineral comprised of iron and sulphur (FeS2) that displays a brilliant metallic lustre and an absence of cleavage.  It is the most common, widespread and abundant of the sulphide minerals, and occurs in all rock types in various forms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



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10





|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Pyrrhotite                      | A common red-brown to bronze pseudohexagonal mineral comprised of iron and sulphur (Fe1-xS).  This mineral is darker and softer than pyrite.  Some forms are magnetic.  It commonly occurs as masses with pentlandite (a nickel ore) and may contain considerable nickel, in such cases mined as a nickel ore.                                                                                                                                     
|Quartzite                       | A granoblastic metamorphic rock consisting predominantly of quartz, formed by the recrystallisation of sandstone through the action of regional or thermal metamorphic action.                                                                                                                                                                                                                                                                     
|RC/Reverse Circulation Drilling | A rapid type of drilling using a fluid/air to recover the drill cuttings from the rotary down-hole hammer bit.  Similar to oil wells                                                                                                                                                                                                                                                                                                               
|Reserves                        | That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.                                                                                                                                                                                                                                                                                                             
|Resistivity                     | An electrical survey parameter identifying the resistive nature of geologic units subjected to an introduced electrical charge.  In geophysical survey methods, resistivity identifies variations in alteration, structure and geology.                                                                                                                                                                                                            
|Roscoelite                      | A vanadium rich mica mineral.                                                                                                                                                                                                                                                                                                                                                                                                                      
|Sinkholes                       | A circular depression in a karst area.  Its drainage is subterranean.                                                                                                                                                                                                                                                                                                                                                                              
|Skarn                           | Rocks primarily composed of lime-bearing silicates derived from nearly pure limestones and dolomites that have been significantly altered during the introduction of large amounts of iron, aluminium, silica and magnesium, most often related directly to plutonic and magmatic events.  This compositional and chemical change is often associated with the emplacement and concentration of metallic minerals as well, creating skarn deposits.
|Sphalerite                      | A yellow, brown or black isometric mineral comprised of zinc, iron and sulphur (Zn, Fe, and S) and is most distinguished by its resinous to adamantine lustre and distinctive cleavage.  It occurs as disseminations, veins and masses.  Sphalerite is one of the most common Zinc ores.                                                                                                                                                           
|Stibnite                        | A lead gray mineral comprised of antimony and sulphur (Sb2S3) which has a brilliant metallic lustre and perfect cleavage.  It is the principal ore of Antimony.                                                                                                                                                                                                                                                                                    
|Stratigraphy                    | The science of studying rock strata, concerning the characteristics and attributes of rock strata formation.  This includes interpretation in terms of origin and geologic history.  All classes of rocks, consolidated or unconsolidated, fall within the general scope of stratigraphy.  It is also the arrangement of strata (layered rocks) relative to geographic position and chronological order of sequence.                               
|Tenement                        | Refers to an area of land held under the Papua New Guinea Mining Act 1992 as an exploration licence; special mining lease; mining lease; alluvial mining lease; lease for mining purposes; or mining easement.                                                                                                                                                                                                                                     
|Tetrahedrite                    | A metallic isometric mineral comprised of copper, iron, antimony and sulphur ((Cu,Fe)12Sb4S13).  It often contains silver or other metals partially replacing copper in its make-up.  It is an important Copper and Silver ore.                                                                                                                                                                                                                    
|Thrust Faults                   | A structural displacement (fault) displaying a dip angle of 45 degrees or less over much of its extent, on which the hanging wall appears to have moved upwards relative to the foot wall.   Horizontal compression rather than vertical displacement is the characteristic feature.                                                                                                                                                               
|Tonne                           | A metric ton (2,204 pounds).                                                                                                                                                                                                                                                                                                                                                                                                                       
|Turbidites                      | Turbidites are sediments deposited from a turbidity current (A density current commonly occurring as a bottom-flowing movement that stirs up sediment creating the density difference with the overlying undisturbed water).  The deposits are characterised by graded bedding, moderate sorting and well-developed primary structures, including lamination.                                                                                      



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PART I



ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS



This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.



ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE



This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.



ITEM 3.

KEY INFORMATION



A.

Selected Financial Data



The following tables summarise selected financial data for the Company (stated in Canadian dollars) prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP).  The information in the table was extracted from the more detailed financial statements and related notes included herein and should be read in conjunction with these financial statements and with the information appearing under the heading Item 5  Operating And Financial Review And Prospects.  Note 15 of the financial statements of the Company included herein sets forth the measurement differences were such information to be presented in accordance with United States generally accepted accounting principles (U.S. GAAP).



Results for the periods ended October 31, 2007 are not necessarily indicative of results for future periods.



INFORMATION IN ACCORDANCE WITH CANADIAN GAAP:



|           |                                            |             |              |               |             |            
|---------- | ------------------------------------------ | ----------- | ------------ | ------------- | ----------- | -----------
|           | Year Ended October 31                     
|2007       | 2006                                       | 2005        | 2004         | 2003         
|           |                                            |             |              |              
|(a)        | Total revenue                              | $0          | $0           | $0            | $0          | $0         
|(b)        | Earnings (loss) before extraordinary items |             |              |               |             |            
|           | Total                                      | $2,833,604  | ($2,035,938) | ($45,694,375) | ($970,743)  | ($729,046) 
|Per Share1 | $0.08                                      | ($0.08)     | ($2.25)      | ($0.06)       | ($0.05)    
|(c)        | Total assets                               | $13,051,241 | $9,946,640   | $2,752,148    | $46,127,849 | $44,267,125
|(d)        | Total long-term debt                       | $0          | $0           | $0            | $0          | $0         
|(e)        | Capital stock                              | $68,001,686 | $67,968,686  | $60,528,028   | $58,131,339 | $55,882,956
|(f)        | Total shareholder equity                   | 11,923,179  | $9,443,677   | $2,397,212    | $45,399,348 | $44,138,131
|(g)        | Cash dividends declared per share          | none        | none         | none          | none        | none       
|(h)        | Net earnings (loss) for the year           |             |              |               |             |            
|           | Total                                      | $2,833,604  | ($2,035,938) | ($45,694,375) | ($970,743)  | ($729,046) 
|Per Share1 |                                            | ($0.08)     | ($2.25)      | ($0.06)       | ($0.05)    



(1)

On October 29, 2004, the Companys issued and outstanding common shares were consolidated on the basis of five old shares for one new share.  Accordingly, amounts presented for earnings (loss) per share have been restated to show comparative figures giving effect to the consolidation.  The effect of potential share issuances pursuant to the exercise of options and warrants would be anti-dilutive and, therefore, basic and diluted losses are the same.





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INFORMATION IN ACCORDANCE WITH U.S. GAAP:



|           |                                            |             |              |              |               |             
|---------- | ------------------------------------------ | ----------- | ------------ | ------------ | ------------- | ------------
|           | Year Ended October 31                     
|2007       | 2006                                       | 2005        | 2004         | 2003        
|(a)        | Total revenue                              | $0          | $0           | $0           | $0            | $0          
|(b)        | Earnings (loss) before extraordinary items |             |              |              |               |             
|           | Total                                      | $1,309,243  | ($2,262,189) | ($2,316,511) | ($13,223,014) | ($2,871,440)
|Per Share1 | $0.04                                      | ($0.08)     | ($0.11)      | ($0.80)      | ($0.21)      
|(c)        | Total assets                               | $8,920,641  | $7,372,191   | $372,160     | $222,565      | $10,856,861 
|(d)        | Total long-term debt                       | $0          | $0           | $0           | $0            | $0          
|(e)        | Capital stock                              | $68,001,686 | $67,968,686  | $60,528,028  | $58,131,339   | $55,882,956 
|(f)        | Total shareholder equity (deficiency)      | 7,792,579   | $6,869,228   | $17,224      | ($505,936)    | $10,727,867 
|(g)        | Cash dividends declared per share          | n/a         | n/a          | n/a          | n/a           | n/a         
|(h)        | Net earnings (loss) for the year           |             |              |              |               |             
|           | Total                                      | $1,309,243  | ($2,262,189) | ($2,316,511) | ($13,223,014) | ($2,871,440)
|Per Share1 | $0.04                                      | ($0.08)     | ($0.11)      | ($0.80)      | ($0.21)      



(1)

On October 29, 2004, the Companys issued and outstanding common shares were consolidated on the basis of five old shares for one new share.  Accordingly, amounts presented for earnings (loss) per share have been restated to show comparative figures giving effect to the consolidation.  The effect of potential share issuances pursuant to the exercise of options and warrants would be anti-dilutive and, therefore, basic and diluted losses are the same.



The Company has not declared or paid any dividends in any of its last five financial years.



In this Annual Report on Form 20-F, unless otherwise specified, all monetary amounts are expressed in Canadian dollars.  On February 25, 2008, the exchange rate, based on the noon buying rate published by The Bank of Canada, for the conversion of Canadian dollars into United States dollars (the Noon Rate of Exchange) was $1.0020.



The following table sets out the high and low exchange rates for each of the last six months.



|                |          |          |         |           |        |       
|--------------- | -------- | -------- | ------- | --------- | ------ | ------
|                | 2008     | 2007    
|January         | December | November | October | September | August
|High for period | 1.0149   | 1.0075   | 0.9715  | 0.9785    | 1.0287 | 1.0626
|Low for period  | 1.0060   | 0.9989   | 0.9616  | 0.9724    | 1.0221 | 1.0542



The following table sets out the average exchange rates for the five most recent financial years calculated by using the average of the Noon Rate of Exchange on the last day of each month during the period.



|                       |                       |        |        |        |       
|---------------------- | --------------------- | ------ | ------ | ------ | ------
|                       | Year Ended October 31
|2007                   | 2006                  | 2005   | 2004   | 2003  
|Average for the period | 1.1008                | 1.1417 | 1.2135 | 1.3149 | 1.4377



B.

Capitalization and Indebtedness



This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.



C.

Reasons For The Offer and Use of Proceeds



This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.





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13



D.

Risk Factors



The following is a brief discussion of those distinctive or special characteristics of the Companys operations and industry that may have a material impact on, or constitute risk factors in respect of, the Companys future financial performance.



Exploration Risks



The Company is engaged in the business of acquiring interests in mineral properties in the hope of locating mineral reserves.  The Company's property interests are in the exploration stage only and are without a known body of commercial ore.  Accordingly, there is little likelihood that the Company will realise any profits in the short to medium term.  Any profitability in the future from the Company's business will be dependent upon locating mineral reserves, which itself is subject to numerous risk factors.



The business of exploring for minerals involves a high degree of risk.  Few properties that are explored are ultimately developed into producing mines.  In exploring its mineral deposits, the Company will be subjected to an array of complex economic factors and accordingly there is no assurance that a positive feasibility study or any projected results contained in a feasibility study of a mineral deposit will be attained.



Technical considerations, delays in obtaining governmental approvals, inability to obtain financing or other factors could cause delays in exploring properties.  Such delays could materially adversely affect the financial performance of the Company.



The business of mining is subject to a variety of risks such as cave-ins and other accidents, flooding, environmental hazards, the discharge of toxic chemicals and other hazards.  Such occurrences may delay production, increase production costs or result in liability.  The Company will have insurance in amounts that it considers to be adequate to protect itself against certain risks of mining and processing.  However, the Company may become subject to liability for hazards against which it cannot insure itself or which it may elect not to insure against because of premium costs or other reasons.  In particular, the Company is not insured for environmental liability or earthquake damage.



Should the Company ultimately find itself with a funding interest in a joint venture to develop the Mt. Kare Property, located in Papua New Guinea, its contribution to the costs necessary to build the necessary mining and processing infrastructure facilities, including electricity, transportation, etc., would be substantial. Should the Company ultimately find itself with a funding interest in a joint venture to develop the Lewis Project, located in Nevada, its contribution to the costs necessary to build the necessary mining and processing infrastructure facilities, including electricity, transportation, etc., would be substantial.



Title Matters



While the Company has diligently investigated title to all exploration concessions and, to the best of its knowledge, title to all properties is in good standing, this should not be construed as a guarantee of title.  Other parties (including indigenous landowners) may dispute title to the exploration properties in which the Company has an interest or the right to acquire an interest.  The properties may be subject to prior unregistered agreements or transfers or aboriginal land claims and title may be affected by undetected defects.



In particular, at the Mt. Kare Property in Papua New Guinea, there has been a complicated series of title disputes and litigation in recent years, which has in the past affected orderly exploration of the property. There can be no assurance that additional title disputes will not arise and in such event the Company's ability to explore and exploit the Mt. Kare Property could be adversely affected by factors unrelated to the geological potential of the property.  (For further detail, see Item 4 - Information on the Company - D. Property, Plants and Equipment - Mt. Kare Property, Papua New Guinea - Title).





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Under the terms of EL 1093, the exploration licence which comprises the Mt. Kare Property, the Government of Papua New Guinea may, at any time prior to commencement of mining, purchase up to a 30% equity interest in any mineral discovery on the property which would cause dilution of the Company's interest in this property on a pro-rata basis.



Conflicts of Interest



Certain of the directors of the Company are directors of other reporting companies or have significant shareholdings in other mineral resource companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation.  In the event that such a conflict of interest arises at a meeting of the directors of the Company, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms.  In appropriate cases the Company will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict.  In accordance with the laws of the Province of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company.  In determining whether or not the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to the Company, the degree of risk to which the Company may be exposed and its financial position at that time.  Other than as indicated, the Company has no other procedures or mechanisms to deal with conflicts of interest.



Currency Fluctuations



The Company maintains its accounts in Canadian dollars.  The Companys operations in Papua New Guinea and Nevada may make it subject to foreign currency fluctuations.  The Company does not at the present nor does it plan in the future to engage in foreign currency transactions to hedge any exchange rate risks.



Additional Funding Requirements



The Company has not received cash flow from operations in the past and cash flow is not expected in the next few years to satisfy the Companys operational requirements and cash commitments.  In the past, the Company has relied on sales of equity securities to meet most of its cash requirements, together with management fees, property payments and sales or joint ventures of properties.  There can be no assurance that funding from these sources will be sufficient in the future to satisfy operational requirements and cash commitments.



The Company presently has sufficient financial resources to undertake its share of the cost of the next phase of exploration on its Lewis Property for the coming year. Further significant exploration programs, if adopted in future years, will require additional financing to proceed. The exploration of the Companys properties depends upon the Companys ability to obtain financing through any or all of the joint venturing of projects, debt financing, equity financing or other means. There is no assurance that the Company will be successful in obtaining the required financing. Failure to obtain additional financing on a timely basis could cause the Company to forfeit all or a portion of its interest in its properties or reduce or terminate its operations on such properties.



History of Net Losses; Accumulated Deficit; Lack of Revenue From Operations



The Company has incurred significant net losses to date. Its deficit as of October 31, 2007 was $59,119,087.  The Company has not yet had any revenue from the exploration activities on its properties, nor has the Company yet found that development activity is warranted on any of its properties. Even if the Company does undertake development activity on any of its properties, the Company may continue to incur losses beyond the period of commencement of such activity.  There is no certainty that the Company will produce revenue, operate profitably or provide a return on investment in the future.





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Limited Experience with Development-Stage Mining Operations



The Company has limited experience in placing resource properties into production, and its ability to do so will be dependent upon using the services of appropriately experienced personnel or entering into agreements with other major resource companies that can provide such expertise.  There can be no assurance that the Company will have available to it the necessary expertise when and if the Company places its resource properties into production.



Stock Subject to Penny Stock Rules



The capital stock of the Company would be classified as penny stock as defined in Reg. § 240.3a51-1 promulgated under the Securities Exchange Act of 1934 (the 1934 Act).  In response to perceived abuse in the penny stock market generally, the 1934 Act was amended in 1990 to add new requirements in connection with penny stocks.  In connection with effecting any transaction in a penny stock, a broker or dealer must give the customer a written risk disclosure document that (a) describes the nature and level of risk in the market for penny stocks in both public offerings and secondary trading, (b) describes the brokers or dealers duties to the customer and the rights and remedies available to such customer with respect to violations of such duties, (c) describes the dealer market, including bid and ask prices for penny stock and the significance of the spread between the bid and ask prices, (d) contains a toll-free telephone number for inquiries on disciplinary histories of brokers and dealers, and (e) defines significant terms used in the disclosure document or the conduct of trading in penny stocks.  In addition, the broker-dealer must provide to a penny stock customer a written monthly account statement that discloses the identity and number of shares of each penny stock held in the customers account, and the estimated market value of such shares.  The extensive disclosure and other broker-dealer compliance related to penny stocks may result in reducing the level of trading activity in the secondary market for such stocks, thus limiting the ability of the holder to sell such stock.



Competition



Significant and increasing competition exists for the limited number of mineral property acquisition opportunities available, both in Papua New Guinea and Nevada.  As a result of this competition, some of which is with large established mining companies with substantial capabilities and greater financial and technical resources than the Company, the Company may be unable to acquire additional attractive mineral properties on terms it considers acceptable.  Accordingly, there can be no assurance that the Companys exploration and acquisition programs will yield any new reserves or result in any commercial mining operation.



Mineral Prices



The mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of minerals are discovered, a profitable market will exist for the sale of same. Factors beyond the control of the Company may affect the marketability of any substances discovered.  The prices of gold and silver have experienced volatile and significant price movements over short periods of time, and are affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the U.S. dollar relative to other currencies), interest rates and global or regional consumption patterns (such as the development of gold coin programs), speculative activities and increased production due to improved mining and production methods.  The supply of and demand for gold is affected by various factors, including political events, economic conditions and production costs in major producing regions and governmental policies with respect to holdings by a nation or its citizens.  There can be no assurance that the price of gold will be such that the Companys properties can be mined at a profit.





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Foreign Countries and Regulatory Requirements



Currently, two of the Companys properties are located in Papua New Guinea and Panama.  Consequently, the Company is subject to certain risks associated with foreign ownership, including currency fluctuations, inflation, political instability and political risk.  Mineral exploration and mining activities in foreign countries may be affected in varying degrees by political stability and government regulations relating to the mining industry. Any changes in regulations or shifts in political conditions are beyond the control of the Company and may adversely affect its business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, restriction of earnings, taxation laws, expropriation of property, environmental legislation, water use and mine safety.  In particular, the status of Papua New Guinea and Panama as developing countries may make it more difficult for the Company to obtain any required production financing for its properties from senior lending institutions.



Environmental and Other Regulatory Requirements



The current or future operations of the Company, including development activities and commencement of production on its properties, require permits from various governmental authorities and such operations are and will be subject to laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.  Companies engaged in the development and operation of mines and related facilities generally experience increased costs, and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits.  There can be no assurance that approvals and permits required to commence production on its various properties will be obtained.  Additional permits and studies, which may include environmental impact studies conducted before permits can be obtained, may be necessary prior to operation of the properties in which the Company has interests and there can be no assurance that the Company will be able to obtain or maintain all necessary permits that may be required to commence construction, development or operation of mining facilities at these properties on terms which enable operations to be conducted at economically justifiable costs.



The Companys potential mining and processing operations and explora­tion activities are subject to various federal and state or provincial laws governing land use, the protection of the environ­ment, prospecting, development, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, mine safety and other matters.  Such operations and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that the Company obtain permits from various governmental agencies.  The Company believes it is in substantial compliance with all material laws and regulations that currently apply to its activities.  There can be no assurance, however, that all permits the Company may require for construction of mining facilities and conduct of mining operations will be obtainable on reasonable terms or that such laws and regulations would not have a material adverse effect on any mining project the Company might undertake.



Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions.  Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.



Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or abandonment or delays in advancement of new exploration properties.





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To the best of the Company's knowledge, it is currently operating in compliance with all applicable environmental regulations.



Papua New Guinea Political Risks



Papua New Guinea is a country subject to a relatively high degree of political risk.  In February 1995, for example, the Export Finance and Insurance Corporation of the Commonwealth of Australia downgraded Papua New Guinea to the D political risk category, which is its category of highest risk. The Company's property in Papua New Guinea is subject to political, economic and other uncertainties, including the risk of civil rebellion, expropriation, nationalisation, renegotiation or nullification of existing contracts, mining licences and permits or other agreements, changes in laws or taxation policies, currency exchange restrictions, changing political conditions and international monetary fluctuations. Future Papua New Guinea Government actions concerning the economy or the operation and regulation of nationally important facilities such as mines could have a significant effect on the Mt. Kare Property. No assurances can be given that the Mt. Kare Property will not be adversely affected by future developments in Papua New Guinea.



There have been instances of civil unrest within Papua New Guinea.  In 1989, civil unrest on Bougainville Island (which is one of the New Guinea Islands) developed into an armed rebellion against the Papua New Guinea Government by the Bougainville Revolutionary Army and Bougainville Island purported to secede from Papua New Guinea resulting in, among other things, the closure of the Panguna copper mine, which has not reopened.



In August 1991, local landowners and alluvial miners in the Mt. Kare area destroyed the alluvial mining facilities of the previous operator at the Mt. Kare Property.  All hardrock exploration was halted shortly thereafter and the previous operator elected not to renew its licence that expired in September 1993. Although the Minister for Mining and Petroleum of Papua New Guinea has advised that many of the local landowners have expressed a desire to see the Mt. Kare project progress, there can be no assurance that the Company's relations with the local landowners and alluvial miners will be more co-operative or will prevent unrest leading to disruption of activities on the property.



Dividends



All of the Company's available funds will be invested to finance the growth of the Company's business and therefore investors cannot expect and should not anticipate receiving a dividend on the Company's common shares in the foreseeable future.



Share Price Volatility; Price Fluctuations



In recent years, the securities markets in Canada have experienced a high level of price and volume volatility, and the market prices of securities of many companies, particularly junior mineral exploration companies like the Company, have experienced wide fluctuations which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies.  In particular, the per share price of the Company's common stock fluctuated from a low of $0.28 to a high of $0.415 in the period beginning October 31, 2007 and ending on the date of this Annual Report. It is probable that such price fluctuations will continue to occur.





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Company's Officers and Directors Resident Outside U.S.; Potential Unenforceability of Civil Liabilities and Judgements



The Company and its officers and all but one of its directors are residents of countries other than the United States.  As a result, it may not be possible for investors to effect service of process within the United States upon such persons or enforce in the United States against such persons judgements obtained in United States courts, including judgements predicated upon the civil liability provisions of United States federal securities laws or state securities laws.



The Company believes that a judgement of a United States court predicated solely upon civil liability under United States securities laws would probably be enforceable in Canada if the United States court in which the judgement was obtained has a basis for jurisdiction in the matter that was recognised by a Canadian court for such purposes.  However, there is doubt whether an action could be brought in Canada in the first instance on the basis of liability predicated solely upon such laws.



If the Company is Unable to Successfully Develop and Subsequently Generate Sufficient Cash Flow from its Properties, the Company Could be Treated as a Passive Foreign Investment Company for U.S. Tax Purposes, Possibly Resulting in Additional Taxes to Its U.S. Stockholders and Less Liquidity for the Stock



The Company, as a foreign corporation with U.S. stockholders, could potentially be treated as a passive foreign investment company (PFIC) for U.S. tax purposes.  U.S. stockholders owning shares of a PFIC can be subject to adverse tax consequences.  In general, the Company would be considered a PFIC if:  75% or more of its gross income in a taxable year is passive income such as dividends and interest; or, the average percentage of the Companys assets (by value) during the taxable year which produce passive income or which are held for production of same is at least 50%.  A U.S. stockholder owing shares of a PFIC, who does not make certain elections for tax purposes, is subject to an additional tax and to an interest charge based on the value of deferral of tax for the period during which the common shares of the PFIC are owned.  Also, gain realised on the disposition of common shares of the PFIC would be treated as ordinary income rather than capital gains.  If U.S. stockholders are subject to adverse tax consequences related to their ownership of the Companys stock, they might be less willing to acquire the stock, which could result in reduced market activity and liquidity for the stock.



ITEM 4.

INFORMATION ON THE COMPANY



A.

History and Development of the Company



Madison Minerals Inc. (the Company) is a British Columbia company engaged in the acquisition and exploration of natural resource properties.  The Company was incorporated on August 20, 1979 as Collingwood Energy Inc. by filing a Memorandum and Articles with the Registrar of Companies under the Company Act (British Columbia).  The Company subsequently changed its name to Collins Resources Ltd. on July 17, 1984 and further changed its name to Madison Enterprises Corp. on June 25, 1992 at which time its shares were consolidated on a 1 for 2.5 basis and on October 29, 2004 further changed its name to Madison Minerals Inc. at which time its shares were consolidated on a 1 for 5 basis.  The Company has three wholly-owned direct subsidiaries, Madison Enterprises (Latin American), S.A., a Panamanian corporation, Madison Enterprises (Nevada) Inc. and Madison Enterprises (BVI) Inc., a British Virgin Islands corporation which, in turn, has one wholly-owned direct subsidiary, Madison Enterprises (PNG) Ltd., a Papua New Guinea corporation.  Madison Enterprises (PNG) Ltd. has two wholly-owned direct subsidiaries, Frontier Mining & Exploration Limited and Oakland Limited, both Papua New Guinea corporations, which in turn collectively own a 100% interest in Matu Mining Limited, a Papua New Guinea corporation.  Frontier Mining & Exploration Limited has one wholly-owned direct subsidiary, Demil Limited which is a Papua New Guinea corporation.  See Item 4 - Information on the Company - C. Organisational Structure below.



The head office and principal office address of the Company is located at Suite 2000, 1055 West Hastings Street, Vancouver, British Columbia, Canada V6E 2E9.  Its telephone number is 604-331-8772.



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Acquisition of the Mt. Kare Property, Papua New Guinea



In July, 1996, the Company became a party to an option agreement dated June 26, 1996 (the Option Agreement) between Carpenter Pacific Resources NL (Carpenter), an Australian public company, and Matu Mining Ltd. (Matu), its majority-owned Papua New Guinea subsidiary, as optionors, and Nell Dragovan, then Chairman of the Board of the Company, as optionee, whereby Ms. Dragovan had the right to acquire a 65% interest in the Mt. Kare Property.  The Option Agreement was assigned to the Company by Ms. Dragovan on July 15, 1996 for reimbursement of the US$320,000 signing fee paid by Ms. Dragovan to Carpenter and Matu.



In order to fully exercise its option, the Company was required to incur exploration expenditures of US$8,000,000 on or before June 26, 2001.  These expenditures were incurred by the Company prior to October 1997 resulting in the Company acquiring its interest in the Mt. Kare Property.  In March 1998, the Company, its wholly owned Papua New Guinea subsidiary, Madison Enterprises (PNG) Limited, Carpenter, Matu, Ramsgate Resources NL, Oakland Limited and Kare-Puga Development Corporation Pty Limited entered into a joint venture agreement to govern future exploration and development of the Mt. Kare Property and this agreement and the Companys interest in the Mt. Kare Property were both registered in April, 1998.  In November 1999, the Company acquired a further 25% beneficial interest in the Mt. Kare Property from Carpenter pursuant to a sale agreement dated September 30, 1999 between the Company, Madison Enterprises (PNG) Ltd. and Carpenter.  The purchase price for this 25% interest was C$8,567,167 and was satisfied by the issuance of 10,000,000 common shares of the Company and non-transferable share purchase warrants entitling the purchase of up to 3,175,000 additional common shares of the Company at a price of $1.00 per share until November 17, 2001 and thereafter at a price of $1.50 per share until November 17, 2002.



In July 2005, the Company signed a letter agreement with Longview Investment Ltd. (Longview Investment), a private Irish company, that was subsequently superseded in October 2005 by a formal agreement as amended in November 2005 by a supplementary agreement and an amending agreement dated June 22, 2006 (collectively the Longview Agreement) between the Company, Madison Enterprises (BVI) Inc. (MBVI), Madison Enterprises (PNG) Ltd. (MPNG)and Longview Capital Partners Limited (Longview), a wholly-owned subsidiary of Longview Investment, whereby Longview gained the rights to acquire interests in the Mt. Kare Property on the following terms:



(a)

Longview will complete and deliver to the Company a preliminary feasibility study by July 4, 2007, provided however, that Longview must, by August 31, 2006, have made significant progress in the preparation of such preliminary feasibility study;



(b)

Upon having delivered a preliminary feasibility study in accordance with paragraph (a) above and made the payments referred to in paragraph (c) below, Longview will have acquired 49% of the shares of MPNG, the holder of the Mt. Kare Property, and shall be entitled to elect a majority of the directors of MPNG;



(c)

Longview will pay the Company a total of CAD$650,000 by October 1, 2006, all of which has been paid;



(d)

The Company will continue to have significant input into the evaluation of the Mt. Kare Property until Longview delivers a bankable final feasibility study through representation on a management committee;



(e)

Following the delivery of a preliminary feasibility study, Longview will have the right to acquire a further 2% interest in MPNG by paying a further $500,000 on or before August 15, 2007;



(f)

Upon having acquired a 51% interest in MPNG, Longview can elect to complete and deliver to the Company a bankable Final Feasibility Study within eighteen months following the date of delivery of a Preliminary Feasibility Study and on completion and delivery to the Company of a bankable Final Feasibility Study, Longview will have acquired a further 14% of the shares of MPNG, for an aggregate ownership interest of 65%;



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20





(g)

Upon having acquired a 51% interest in MPNG or upon having delivered a bankable Final Feasibility Study in accordance with paragraph (f) above, Longview will have sole and exclusive option to acquire the remaining shares of MPNG owned by MBVI on the following terms and conditions:



(i)

Longview and the Company shall use their best efforts to agree on and appoint a qualified person (as that term is defined in National Instrument 43-101) to value, at Longviews cost, the remaining shares of MPNG owned by MBVI;



(ii)

If Longview and the Company cannot agree on and appoint a mutually acceptable qualified person, Longview may unilaterally appoint the qualified person, provided Longview has delivered the bankable Final Feasibility Study in accordance with paragraph (f) above;



(iii)

If Longview and the Company cannot agree on and appoint a mutually acceptable qualified person and Longview has not delivered the bankable Final Feasibility Study in accordance with paragraph (f) above, it shall complete and deliver to the Company a bankable Final Feasibility Study within eighteen months following the date of delivery of a Preliminary Feasibility Study, whereupon it may unilaterally appoint the qualified person to value, at Longviews cost, the remaining shares of MPNG owned by MBVI;



(iv)

Upon the qualified person having been appointed, he must complete and deliver the valuation to the parties within thirty days of his appointment, whereupon Longview may acquire, within thirty days following the delivery of the valuation, the remaining shares of MPNG owned by MBVI by paying to MBVI consideration equal to the valuation as determined by the qualified person either in cash or, if Longview is a public company whose shares trade on a recognised stock exchange in North America, in shares of Longview based on the 30 day volume weighted average price of Longviews shares for the twenty trading days prior to Longview exercising its option to acquire the remaining shares of MPNG owned by MBVI, or any combination of cash and shares of Longview;



(h)

If Longview elects not to acquire the remaining shares of MPNG owned by MBVI, Longview and the Company will use their best efforts to negotiate and settle the terms of an agreement to associate as a single purpose joint venture for the development of the Mt. Kare Property on terms which are generally standard in the North American mining industry, including the requirement that the parties will bear all future costs associated with the exploration and development of the Mt. Kare Property on a pro rata basis, or be subject to dilution.



Longview Investment also purchased 800,000 units of the Company at a price of $0.25 per unit, each unit comprised of one common share of the Company and one half of a non-transferable share purchase warrant, each whole warrant entitling the purchase of an additional share of the Company at a price of $0.35 per share until July 5, 2006.  In October 2005, Longview granted to Buffalo Gold Ltd., a Canadian public company related by a director in common, an option to acquire all of its interest in the Longview agreement.  See Item 4 - Information on the Company - D. Property, Plants and Equipment - Mt. Kare Property, Papua New Guinea - Title below.  As at October 31, 2005, the Company had spent $45,322,341 on capital expenditures including the exploration of the Mt. Kare Property, however, this amount was written down to $500,000 due to the uncertainty of the recoverability of the historical carrying value of the property.  During the fiscal year ended October 31, 2006 option payment proceeds of $500,000 were received, resulting in the carrying value of the property being reduced to $Nil.





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21



Effective June 25, 2007, Longview, Buffalo Gold Ltd., a public company whose shares are listed for trading on the TSX Venture Exchange (Buffalo), Buffalos subsidiary Buffalo Gold (PNG) Ltd. (BPNG), the Company, MBVI and MPNG entered into a new agreement replacing all previous agreements in respect of the Mt. Kare project (the 2007 Mt. Kare Agreement). The principal terms of this agreement are:



(a)

The grant by MBVI to BPNG of an option to acquire 60% of the shares of MPNG, exerciseable in consideration of (i) the issue to MBVI of 3,000,000 shares of Buffalo, and (ii) the payment by Buffalo to MBVI of $500,000, or its equivalent in shares of Buffalo determined by reference to a 20 trading day volume weighted average trading price of Buffalo shares;



(b)

The grant by MBVI to BPNG of an option to acquire a further 15% of the shares of MPNG, exerciseable in consideration of the delivery of a bankable feasibility study on or before June 25, 2011, subject to a deferral to June 25, 2012 provided Buffalo or BPNG have actively carried out a minimum of $500,000 of eligible expenditures on the Mt. Kare project in each of the years ending June 25, 2008, 2009, 2010 and 2011;



(c)

Grant of the right to Buffalo or BPNG upon delivery of a bankable feasibility study to elect to purchase MBVIs remaining interest for fair value as established by an independent valuations professional, which may be paid in cash or in whole or in part by the issue of Buffalo shares (or those of an assignee of Buffalo) based on a 20 trading day volume weighted average trading price of Buffalo shares (or those of Buffalos assignee);



(d)

In the event Buffalo or BPNG do not exercise the option to acquire a further 15% of the shares as set out in paragraph (b) above, BPNG and MBVI will enter into a 60%/40% joint venture to further develop the Mt. Kare project, subject to dilution provisions;



(e)

In the event Buffalo or BPNG do not elect to purchase MBVIs remaining interest as set out in paragraph (c) above, BPNG and MBVI will enter into a 75%/25% joint venture to further develop the Mt. Kare project, subject to dilution provisions.



Buffalo and BPNG exercised the option set out in paragraph (a) above effective June 28, 2007 and issued a total of 3,521,648 Buffalo shares to MBVI. Because the carrying value of the Mt. Kare project in the Companys accounts had previously been reduced to $Nil, the fair value of these shares, an amount of $3,375,500 less certain cash transaction costs of $9,619, was recorded in income as recovery of mineral property costs previously written down.



BPNG may terminate its further option and election rights at any time by providing 90 days notice to MBVI.



Acquisition of the Belencillo Property, Panama



In August 1993, the Company was granted an option by Adrian Resources, S.A. (Adrian), to acquire a 50% interest in two exploration concessions known collectively as the Belencillo Property located in the Republic of Panama.



In order to exercise its option, the Company was required to pay Adrian an aggregate of $250,000 over four years ($50,000 payable on signing and $50,000 payable on each anniversary of the date of signing of the agreement for four years), issue to Adrian 200,000 common shares over three years and fund expenditures on exploration and development of the Belencillo Property of not less than $2,500,000 in the aggregate, on or before August 31, 1997.  In addition, the Company is required to issue to Adrian an additional 100,000 shares on the commencement of commercial production from Belencillo.  To date, the Company has paid Adrian $200,000, issued 200,000 shares to Adrian and incurred expenditures totalling approximately $1.5 million on the Belencillo Property.  In January 1999, the Company and Adrian agreed to amend the terms on which the Company could acquire an interest in the Belencillo Property, resulting in the Companys relinquishment of its right to acquire a 50% interest in the Belencillo Property in exchange for the immediate vesting of a 31.12% interest.  See Item 4 - Information on the Company - D. Property, Plants and Equipment - Belencillo Property, Panama below.  Any capital expenditures on the Belencillo Property will most likely be funded through the sale of share capital.  The Company is presently in discussions with Adrians parent company, Petaquilla Minerals Ltd., to carry out further exploration of the Belencillo Property.



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For financial reporting purposes, since no further exploration was intended for the Belencillo Property at the time, the Company wrote off to operations resource property and deferred costs totalling $2,267,471 during the fiscal year ended October 31, 2001.  During the fiscal year ended October 31, 2006, the Company spent $42,322 on sampling and trenching carried out by Petaquilla Minerals Ltd., the Companys joint venture partner. During the fiscal year ended October 31, 2007 the Company made no expenditures on the Belencillo Property; however, subsequently the Company has made modest expenditures for legal compliance in Panama to maintain its interests in good standing.



Acquisition of the Lewis Property, Nevada



In June 2002, the Company became a party to agreements whereby it held the option to acquire up to a 75% interest in the Lewis Property, a contiguous block of 381 unpatented and 8 patented claims located in Lander County covering some 20 square miles in the Battle Mountain District of central Nevada.



The Company, along with Great American Minerals, Inc. (GAM) (formerly Great American Minerals Exploration LLC), held certain rights, pursuant to an exploration and option to purchase agreement dated June 1, 2002 (the Lewis Agreement) with F.W. Lewis, Inc. (Lewis) to jointly acquire a 100% interest in the Lewis Property.  As set out in Note 16 to the October 31, 2007 audited financial statements, subsequent to that fiscal year end the Joint Venture met all their obligations and exercised their option and made the $2,000,000 payment.  The Joint Venture now owns 100% interest in the Lewis Claims, with the Company holding a 60% interest and GAM a 40% interest.



The Lewis Property is subject to an advance minimum royalty of US$60,000 per year commencing on the exercise of the purchase option (subject to annual escalation based upon the consumer price index), a 5% gross royalty on gold or silver and a 4% net smelter returns royalty on all other metals in favour of Lewis.  These royalties can be purchased for US$4,000,000 for a period of one year following the exercise of the purchase option.  The purchase price for the royalties increases by US$500,000 per annum on each anniversary of the date of exercise of the purchase option for a period of 35 years. The advance royalty for the first year was paid by the Joint Venture in December 2007 at the time of exercising the purchase option.



The rights of the Company and GAM concerning the Lewis Agreement are governed by a joint venture letter agreement between them dated May 23, 2002 (the GAM Agreement).  Under the GAM Agreement, the Company could acquire a 51% interest in the Lewis Agreement by paying GAM US$25,000 on regulatory approval of the acquisition (paid), paying the property payments due pursuant to the Lewis Agreement before December 31, 2004 as described (which total US$111,000) and spending US$650,000 on exploration by December 31, 2004, in accordance with the terms of the Lewis Agreement.  The Company had an option to acquire a further 9% interest (60% in the aggregate) by paying the property payments due pursuant to the Lewis Agreement from January 1, 2005 to December 31, 2006 (which total US$72,000 and have been paid) and spending a further US$500,000 on exploration by December 1, 2006, with US$250,000 to be spent in each year. Prior to the end of the fiscal year ending October 31, 2006, the Company had made sufficient exploration expenditures and other required payments on the Lewis Property to acquire a 60% interest in the Lewis Agreement, and the Company and GAM in 2006 formed a 60/40 joint venture for ongoing exploration and development of the Lewis Property.



B.

Business Overview



Since its incorporation in 1979, the Company has been in the business of the acquisition and exploration of mineral properties, with the primary aim of advancing them to a stage where they can be exploited at a profit. At that stage, the Companys operations would, to some extent, be dependent on the prevailing market prices for any of the minerals produced by such operations.  At present, however, none of the Companys properties has a known body of commercial ore nor are any of such properties at the commercial development or production stage, and all such properties are in the exploration stage.



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Prior to 1993, the Company was engaged in the exploration of mineral properties that were subsequently abandoned and written off.  From 1993 to 1996, the Company was primarily focussed on the exploration of the Belencillo Property in the Republic of Panama.  From 1996 to 2005, the Company was primarily focussed on the exploration of the Mt. Kare Property in Papua New Guinea.  In 2002, the Company began exploring the Lewis Property in Nevada, and since 2005 has been primarily focussed on the exploration of this project.  See Item 4 - Information on the Company - D. Property, Plants and Equipment below.



The Companys operations in Papua New Guinea are governed primarily by the Mining Act 1992 (Mining Act).  The Mining Act and related regulations cover all the salient points of the application process, land tenure, responsibilities and reporting guidelines for exploration and mining companies as well as compensation matters and issues relating to the local population.



On 1 January 2006, the Mineral Resources Authority Act 2005 (MRA Act) came into operation.  One of the purposes of the MRA Act is that it establishes the Mineral Resources Authority (Authority) as an independent statutory body to replace the existing Department of Mining (Department) in carrying out its various functions as the principal regulatory body over the mining industry in Papua New Guinea.  Under the MRA Act, the administration and enforcement of the Mining Act is the responsibility of the Authority.   At the date of this disclosure, the replacement of the Department with the Authority is in a transitional phase.  As a result, the Department is continuing to act as the regulatory body until such time as the Authority is operational, which has led to some uncertainty in the mining industry.



The MRA Act also amended various provisions of the Mining Act, effective from 1 January 2006.  One amendment to the Mining Act, is the replacement of the Mining Advisory Board with the Mining Advisory Council (Council), whose function is to advise the Minister for Mining (Minister) on such matters as the Minister may refer to the Council.



Under the Mining Act, an Exploration Licence (EL) is granted and renewed by the Minister for Mining, on advice and recommendations from the Council.  At the date of this disclosure, the replacement of the Mining Advisory Board with the Mining Advisory Council is in a transitional phase.  As a result, any applications for the grant or renewal of tenements are not being considered by the Minister until the Council has been constituted.  An application to extend (i.e. renew) the term of EL 1093 was lodged with the Department on 23 May 2006.  Pursuant to section 112 of the Mining Act, EL 1093 continues in effect until such time as the Minister has determined the application on advice and recommendations from the Council.



An EL confers on the holder the right to carry out exploration for minerals over a defined area and to enter and occupy the land and to take samples of rock, earth, soils or minerals for the purposes of carrying out exploration.  An EL is normally granted for two years and is renewable on a discretionary basis for an indefinite number of two-year periods, provided work and expenditure commitments under the EL have been fulfilled.  For an EL exceeding an area of 30 sub-blocks, a reduction of at least 50% of the tenement area is generally required upon each renewal; however, where the area of the EL does not exceed 75 sub-blocks, the licence holder may apply for a waiver of the relinquishment.  Minimum expenditure commitments under an EL are K300 per sub-block per year in the first two year term of an EL, K700 per sub-block per year in the second two year term of an EL and K1,500 per sub-block per year in the third and subsequent terms of an EL.  One kina is approximately equal to Cdn.$0.40 and there are approximately 3.4 square kilometres in each sub-block.



The Papua New Guinea Government has a policy of reserving its right to acquire at cost up to a 30% participating interest in any major mineral development in Papua New Guinea.  To exercise this right, the government repays the developer 30% (or such lesser percentage interest as is to be acquired by the government) of the developer's accumulated costs to that date and commits to fund its 30% (or the lesser interest to be acquired by the government) share of ongoing development costs.  EL 1093 contains a condition granting this 30% acquisition right to the government.



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Under the Mining Act, all dealings concerning a legal or equitable interest in a mineral tenure are subject to approval by the Minister for Mining as well as a requirement for registration in the Register of Tenements.



C.

Organizational Structure



The following chart sets out the Companys corporate structure and the mineral properties owned by each of the Companys subsidiaries as at February 15, 2008:



|                                                                                                |                                                                                               |                                                                                                          |                                                                               |                                                                                                |                                                                         |  |                                           |  |  |  |  |  |  |  |  |  | 
|----------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- |  | ----------------------------------------- |  |  |  |  |  |  |  |  |  | 
|                                                                                                | Madison Minerals Inc.
        (Incorporated in B.C.)                                          |                                                                                                         
|                                                                                                |                                                                                               |                                                                                                          |                                                                               |                                                                                                |                                                                         |  |                                          
|                                                                                                |                                                                                               |                                                                                                          |                                                                               |                                                                                                |                                                                         |  |                                           |  |  |  |  |  | 
|Madison Enterprises
        (Latin American), S.A
        100%
        (Incorporated in Panama) |                                                                                               | Madison Enterprises
        (BVI) Inc.
        100%
        (Incorporated in the British Virgin Islands) |                                                                               | Madison Enterprises (Nevada) Inc.
        100%
        (Incorporated in Nevada)               
|                                                                                                |                                                                                               |                                                                                                          |                                                                               |                                                                                                |                                                                         |  |                                          
|                                                                                                | Belencillo Property
        Panama
        31.12%                                             |                                                                                                          |                                                                               | Madison Enterprises
        (PNG) Ltd.
        40%*
        (Incorporated in Papua New Guinea) |                                                                         |  | Lewis Property
        Nevada
        60% | 
|                                                                                                |                                                                                               |                                                                                                          |                                                                               |                                                                                                |                                                                         |  |                                          
|                                                                                                |                                                                                               |                                                                                                          |                                                                               |                                                                                                |                                                                         |  |                                          
|                                                                                                | Frontier Mining & Exploration Limited
        100%
        (Incorporated in Papua New Guinea) |                                                                                                          | Mt. Kare Property
        PNG
        100%                                    |                                                                                                | Oakland Limited
        100%
        (Incorporated in Papua New Guinea) | 
|                                                                                                |                                                                                               |                                                                                                         
|                                                                                                | Matu Mining Limited
        66.67%
        (Incorporated in Papua New Guinea)                 |                                                                                                          | Matu Mining Limited
        33.33%
        (Incorporated in Papua New Guinea) |                                                                                               



*

Subject to the right of Buffalo Gold Ltd. to acquire up to a 100% interest in Madison Enterprises (PNG) Ltd.  See Item 4 - Information on the Company - D. Property, Plants and Equipment - Mt. Kare Property, Papua New Guinea - Title below.





D.

Property Plants and Equipment



All properties of the Company are in the exploration stage only and are without a known body of commercial ore.  The Company has no producing properties and has not had any revenue from any mineral in the last three fiscal years.  Gerald McArthur, P. Geo., the Companys consulting geologist, is the qualified person responsible for the preparation of the technical information in this document.





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Mt. Kare Property, Papua New Guinea



Title



The Companys formerly wholly-owned indirect subsidiary Madison Enterprises (PNG) Ltd. (MPNG), owns a 90% beneficial interest in the Mt. Kare Property. The other 10% is held in trust for Kare-Puga Development Corporation Pty Limited (KDC), a private Papua New Guinea company that represents the traditional landowners at Mt. Kare and in turn, holds its 10% beneficial interest in trust for such traditional landowners. Pursuant to an Amended and Restated Option Agreement dated June 25, 2007, MPNG is now held, indirectly through subsidiaries, 60% by Buffalo and 40% by the Company.



On March 20, 1998, the Company, its predecessors in title and KDC entered into a joint venture agreement (the Joint Venture Agreement) to govern future exploration and development of the Mt. Kare Property.   The Joint Venture Agreement is now only relevant to the extent that it defines the rights and obligations of the Company and KDC as between themselves.  The Joint Venture Agreement provides that all costs up until the delivery of a feasibility report will be borne by the Company; KDC is obliged to pay its proportionate share of costs following the delivery of a feasibility report, failing which its interest will convert to a royalty interest equal to 10% of net profits.



In July 2005, the Company signed a letter agreement with Longview Investment Ltd. (Longview Investment), a private Irish company, that was subsequently superseded in October 2005 by a formal agreement as amended in November 2005 by a supplementary agreement (collectively the Longview Agreement) between the Company, Madison Enterprises (BVI) Inc. (MBVI), MPNG and Longview Capital Partners Limited (Longview), a wholly-owned subsidiary of Longview Investment, whereby Longview acquired the rights to acquire interests in the Mt. Kare Property on the following terms:



(a)

Longview will complete and deliver to the Company a preliminary feasibility study by July 4, 2007, provided however, that Longview must, by August 31, 2006, have made significant progress in the preparation of such preliminary feasibility study;



(b)

Upon having delivered a preliminary feasibility study in accordance with paragraph (a) above and made the payments referred to in paragraph (c) below, Longview will have acquired 49% of the shares of MPNG, and shall be entitled to elect a majority of the directors of MPNG;



(c)

Longview will pay the Company a total of CAD$650,000 by October 1, 2006, all of which has been paid;



(d)

The Company will continue to have significant input into the evaluation of the Mt. Kare Property until Longview delivers a bankable final feasibility study through representation on a management committee;



(e)

Following the delivery of a preliminary feasibility study, Longview will have the right to acquire a further 2% interest in MPNG by paying a further $500,000 on or before August 15, 2007;



(f)

Upon having acquired a 51% interest in MPNG, Longview can elect to complete and deliver to the Company a bankable Final Feasibility Study within eighteen months following the date of delivery of a Preliminary Feasibility Study and on completion and delivery to the Company of a bankable Final Feasibility Study, Longview will have acquired a further 14% of the shares of MPNG, for an aggregate ownership interest of 65%;



(g)

Upon having acquired a 51% interest in MPNG or upon having delivered a bankable Final Feasibility Study in accordance with paragraph (f) above, Longview will have sole and exclusive option to acquire the remaining shares of MPNG owned by MBVI on the following terms and conditions:



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(i)

Longview and the Company shall use their best efforts to agree on and appoint a qualified person (as that term is defined in National Instrument 43-101) to value, at Longviews cost, the remaining shares of MPNG owned by MBVI;



(ii)

If Longview and the Company cannot agree on and appoint a mutually acceptable qualified person, Longview may unilaterally appoint the qualified person, provided Longview has delivered the bankable Final Feasibility Study in accordance with paragraph (f) above;



(iii)

If Longview and the Company cannot agree on and appoint a mutually acceptable qualified person and Longview has not delivered the bankable Final Feasibility Study in accordance with paragraph (f) above, it shall complete and deliver to the Company a bankable Final Feasibility Study within eighteen months following the date of delivery of a Preliminary Feasibility Study, whereupon it may unilaterally appoint the qualified person to value, at Longviews cost, the remaining shares of MPNG owned by MBVI;



(iv)

Upon the qualified person having been appointed, he must complete and deliver the valuation to the parties within thirty days of his appointment, whereupon Longview may acquire, within thirty days following the delivery of the valuation, the remaining shares of MPNG owned by MBVI by paying to MBVI consideration equal to the valuation as determined by the qualified person either in cash or, if Longview is a public company whose shares trade on a recognised stock exchange in North America, in shares of Longview based on the 30 day volume weighted average price of Longviews shares for the twenty trading days prior to Longview exercising its option to acquire the remaining shares of MPNG owned by MBVI, or any combination of cash and shares of Longview;



(h)

If Longview elects not to acquire the remaining shares of MPNG owned by MBVI, Longview and the Company will use their best efforts to negotiate and settle the terms of an agreement to associate as a single purpose joint venture for the development of the Mt. Kare Property on terms which are generally standard in the North American mining industry, including the requirement that the parties will bear all future costs associated with the exploration and development of the Mt. Kare Property on a pro rata basis, or be subject to dilution.



Longview Investment also purchased 800,000 units of the Company at a price of $0.25 per unit, each unit comprised of one common share of the Company and one half of a non-transferable share purchase warrant, each whole warrant entitling the purchase of an additional share of the Company at a price of $0.35 per share until July 5, 2006.  In October 2005, Longview granted to Buffalo Gold Ltd., a Canadian public company related by a director in common, an option to acquire all of its interest in the Longview agreement.



Effective June 25, 2007, Longview, Buffalo, BPNG, the Company, MBVI and MPNG entered into a new agreement replacing all previous agreements in respect of the Mt. Kare project (the 2007 Mt. Kare Agreement). The principal terms of this agreement are:



(a)

The grant by MBVI to BPNG of an option to acquire 60% of the shares of MPNG, exercisable in consideration of (i) the issue to MBVI of 3,000,000 shares of Buffalo, and (ii) the payment by Buffalo to MBVI of $500,000, or its equivalent in shares of Buffalo determined by reference to a 20 trading day volume weighted average trading price of Buffalo shares;



(b)

The grant by MBVI to BPNG of an option to acquire a further 15% of the shares of MPNG, exercisable in consideration of the delivery of a bankable feasibility study on or before June 25, 2011, subject to a deferral to June 25, 2012 provided Buffalo or BPNG have actively carried out a minimum of $500,000 of eligible expenditures on the Mt. Kare project in each of the years ending June 25, 2008, 2009, 2010 and 2011;



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27





(c)

Grant of the right to Buffalo or BPNG upon delivery of a bankable feasibility study to elect to purchase MBVIs remaining interest for fair value as established by an independent valuations professional, which may be paid in cash or in whole or in part by the issue of Buffalo shares (or those of an assignee of Buffalo) based on a 20 trading day volume weighted average trading price of Buffalo shares (or those of Buffalos assignee);



(d)

In the event Buffalo or BPNG do not exercise the option to acquire a further 15% of the shares as set out in paragraph (b) above, BPNG and MBVI will enter into a 60%/40% joint venture to further develop the Mt. Kare project, subject to dilution provisions;



(e)

In the event Buffalo or BPNG do not elect to purchase MBVIs remaining interest as set out in paragraph (c) above, BPNG and MBVI will enter into a 75%/25% joint venture to further develop the Mt. Kare project, subject to dilution provisions.



Buffalo and BPNG exercised the option set out in paragraph (a) above effective June 28, 2007 and issued a total of 3,521,648 Buffalo shares to MBVI.



BPNG may terminate its further option and election rights at any time by providing 90 days notice to MBVI.



EL 1093 is an exploration licence granted under the Mining Act 1992 of Papua New Guinea on August 29, 1994 to Matu for a two-year term.  EL 1093 was renewed for an additional two-year term on December 6, 1996 without a reduction in the area of the licence.  EL 1093 was renewed for a third two-year term on April 7, 1999 without a reduction in the area of the licence. EL 1093 was renewed again in the years 2000, 2002, 2004 and in 2006 a further application for renewal was submitted.  This application is pending.  EL 1093 provides that, at any time prior to commencement of mining at Mt. Kare, the Government may purchase up to a 30% equity interest in any mineral discovery on the property, for a price equal to its proportionate share (up to 30%) of the accumulated historical exploration expenditures of the owner(s), and then will be required to participate pro rata in additional required development expenditures.



Location, Access & Physiography



The Mt. Kare Property is comprised of a 220 km2 exploration licence, EL 1093, located in the Enga Province of the central highlands of mainland Papua New Guinea as shown on the location map below.  The centre of the property corresponds to approximately 5o34S latitude and 142o59E longitude. The Porgera gold mining operation is located 17 kilometres to the northeast and the Mt. Kare Property is contiguous to the Porgera property.



Access to the Mt. Kare Property is by helicopter, with the closest airstrip being at Porgera, 17 km to the northeast on the existing Papua New Guinea road network.  The airport at Mt. Hagen, 140 km to the southeast, has regularly scheduled flights from Port Moresby.  Current exploration work at Mt. Kare is helicopter supported; however a road leading to Porgera passes within 3 km of the property boundary and a high voltage power transmission line which extends from a gas-turbine generating station on the south coast of PNG a distance of 72 km to Porgera passes across the southeast portion of the Mt. Kare property.  All electrical power for the Mt. Kare project is currently produced on site using two diesel generators.



The project is located in subdued hills at an elevation ranging from 2,600 m to 3,225 m above sea level.  The area is drained by the Ere River which flows to the southwest, and the Pagubiea and Yamberei Rivers which flow towards the north.  However, karsted areas of limestone cover are characterised by internal drainage into sinkholes.





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PROPERTY LOCATION



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Plant and Equipment



At present, there is no hardrock mining equipment on the Mt. Kare Property.  A fifty-man exploration camp has been constructed to house personnel working on the diamond drilling and surface exploration programs.



Exploration History



Reports of gold in the Porgera area to the northeast of Mt. Kare date back to 1938 when Government patrol officers identified pannable gold in the drainages downstream from Porgera.  The first geological work in the area was conducted during 1948 by the Australian Bureau of Mineral Resources and gold was discovered in altered diorite bedrock.  A small gold rush occurred the same year, but little gold was recovered.  There is no record of any activity by local residents having worked alluvial deposits in the Mt. Kare area during this period.





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The first significant exploration work conducted on the Mt. Kare Property was by CRA Exploration Pty. Ltd. (CRA) of Australia between 1986 and 1991.  This included preliminary regional reconnaissance geochemical exploration followed by trenching, geological mapping, geophysical surveying, sampling, petrological studies, diamond drilling and an evaluation of alluvial gold resources.



Between 1989 and 1990, the Mt. Kare Property was the subject of an alluvial and colluvial gold rush.  At the peak of the rush, as many as 10,000 alluvial and colluvial miners may have been working on the property now covered by EL1093. All of the alluvial and colluvial gold recovered was by primitive manual methods using shovels and gold pans.



Mechanised alluvial mining at Mt. Kare commenced on SML 1 in early 1991 under CRA operatorship and continued until August 1991 when the CRA exploration camp at Mt. Kare was destroyed by discontented local landowners and alluvial miners.  All hardrock exploration was halted shortly thereafter and CRA undertook no further fieldwork at Mt. Kare.  CRA elected not to renew the exploration licence when it expired in September 1993.



Between 1993 and 1996, little exploration work was undertaken, due to litigation relating to title to the Mt. Kare Property that was settled in 1996.



The Company carried out extensive exploration of the Mt. Kare Property between 1996 and 2005, including construction of a 50-man exploration camp; prospecting and trenching; surveying; geological mapping; geochemical sampling; structural interpretation based on satellite and airphoto imagery, airborne and ground geophysical surveying; metallurgical testing; and 240 diamond drill holes totalling approximately 38,000 metres.



In 1998, the Company commissioned the independent engineering firm of Watts, Griffis and McOuat (WGM) to prepare an independent estimate (the Estimate) of the grade and volume of mineralised material for the Mt. Kare Property which incorporated all drill data available as of September 10, 1998.  In addition, WGM completed a project audit.  WGM employed 3-D block modelling to estimate the Mt. Kare gold and silver mineralised material with and without the cutting of high-grade gold assays to 30 g/t gold.  The Estimate was completed in November 1998.  In December 1999 the Company commissioned WGM to produce an update to the Estimate (the Update) to include the 216 holes drilled to the end of 1999 by the Company, in addition to the 32 holes drilled on the property by CRA.  Using similar methodology to the Estimate, WGM employed 3-D block modelling to estimate the Mt. Kare gold and silver mineralised material with and without the cutting of high grade gold assays to 30 g/t gold.  The Update was completed in February 2000.



Exploration - Recent Results



Since late 2005, exploration at Mt. Kare has been undertaken by Buffalo Gold Ltd. (Buffalo) as part of its option to acquire, initially, a 49% interest, subsequently amended to an earned 60% interest, in MPNG, the holder of the Mt. Kare Property.  The Company has been advised by Buffalo that this work has been comprised of commencing the preparation of a pre-feasibility study on the existing resources; an investigation of the potential for increasing the resource base by extending the known ore zones both along the strike and down dip; the evaluation and exploration of other known targets that exist on the property that have yet to be investigated and measured; and a re-evaluation and assessment of the regional potential.  The most progress update issued by Buffalo was on October 17, 2007, when drill results from the last of the holes drilled in an early summer program were released. Those holes were drilled to test new targets based on geological interpretation, magnetic survey results and surface sampling. Buffalos CEO was quoted as saying that once final data were in and Buffalos technical team were able to evaluate all the data, he believed Buffalo would have some excellent targets for follow-up drilling.





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Regional and Local Geology



Papua New Guinea forms part of an island arc; it is located in an area where plates of the earth's crust have interacted in recent geological times. The Mt. Kare Property occurs at a point where large scale northwest-southeast structures running parallel to the island arc are intersected by the northeast-southwest trending Porgera Transfer Structure, a very important regional feature controlling gold mineralization in this area.  The intersection of these two major structures has produced a conduit from the upper mantle along which mineralised magmas have risen. The Mt. Kare Property covers a 12 kilometre strike length of the Porgera Transfer Structure.



At the Mt. Kare property, epithermal gold mineralization is genetically related to a mafic intrusive complex that was emplaced within the Porgera Transfer Structure.  The emplacement of these intrusives at Mt. Kare produced zones of brecciation and shattered rock providing a plumbing network through which mineralised fluids have circulated and deposited gold.  Mafic intrusive rocks of the unique age and composition of those at Mt. Kare are not known to occur anywhere in Papua New Guinea other than within the Porgera Transfer Structure.



Mineralization



There are two distinct types of gold mineralization at Mt. Kare:



1.

Early, mesothermal, carbonate-base metal-gold mineralization, which occurs in broad zones of brecciation which trend NE, paralleling the Porgera Transfer Structure. This type of mineralization has been defined in several zones at Mt. Kare and has been tested in trenches and numerous drill holes.



2.

Late stage, epithermal quartz-roscoelite-gold mineralization.



The quartz-roscoelite-gold mineralization occurs in dilatant (tension gash) features occurring within and proximal to the breccia zones which host carbonate-base metal-gold mineralization. These dilatant features can occur in variable orientations within the Porgera Transfer Structure.



Proposed Exploration  2008



The Company has no plans to conduct any further exploration on the Mt. Kare Property, because all proposed work is for the account of, and at the sole cost of, Buffalo Gold Ltd. or BPNG pursuant to the 2007 Mt. Kare Agreement. In February 2008 Buffalo announced that an IP survey is being conducted to test the southern extension of the Western Roscoelite Zone (WRZ) on EL 1093, which hosts the high grade zone of the Mt. Kare resource. Buffalo announced that it expects to receive results from this survey in the first quarter of 2008, and that any drilling would likely occur in the second half of the year once work is completed on all three licenses held at Mt. Kare by Buffalo.



Doing Business in Papua New Guinea



The following information has been compiled by the Company from various sources which it believes to be reliable.



Introduction



The Independent State of Papua New Guinea is located in the southwest Pacific and adjoins Indonesia, which occupies the western half of the island of New Guinea.  The population of Papua New Guinea was approximately 3.76 million at the time of the last census in 1990, and its land area is approximately 462,000 square kilometres.  English is the principal language of government and commerce.





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Papua New Guinea was granted independence from Australia in 1975 and rapidly assumed full management of its own affairs.  Since independence, Papua New Guinea has engaged in several general elections smoothly undergoing a number of democratic changes of government.



Papua New Guinea is not without problems.  In recent years, there have been law and order or security concerns, particularly in the cities and parts of the highlands.  In undertaking mineral exploration in Papua New Guinea, it is considered essential to co-ordinate continually with local landowners in planning the early stages of exploration through to potential mine development.  (See Item 3 - Key Information  - D. Risk Factors - Papua New Guinea Political Risks).



The title to minerals is reserved in favour of the independent state of Papua New Guinea.  The ownership and responsibility for minerals and mineral exploration and development lies with the National Government.  From a practical viewpoint however, it is also necessary to maintain good relationships with and seek approvals from provincial governments and local landowners.



Foreign Investment Issues



Since achieving self-government in 1973 and independence in 1975, Papua New Guinea has maintained a consistent policy of welcoming direct foreign investment in most activities and foreign investment in the mining sector in particular.  The Investment Promotion Act 1992 assures foreign investors that they will have the right to remit after-tax profits and to make external debt-service and supplier payments, and that there will be no expropriation without adequate compensation.



Papua New Guinea has a system of currency exchange controls, which is administered by the Bank of Papua New Guinea as the Central Bank under the Central Banking (Foreign Exchange and Gold) Regulation and the Exchange Control Notices issued thereunder (Foreign Exchange Regulations).



The Foreign Exchange Regulations control, among other things, the following activities by any person resident in Papua New Guinea (including a resident corporation):



(a)

any dealing in foreign currency;



(b)

any transfer or removal of Papua New Guinea currency or foreign currency out of Papua New Guinea;



(c)

any payment or commitment to make a payment, or dispose of property, or acknowledge a debt, to or in favour of a person resident outside Papua New Guinea; and



(d)

any borrowings from a person resident outside Papua New Guinea.



In order to do any of these things, a resident of Papua New Guinea needs currency exchange control authority.  Such authority can be obtained from the Central Bank or, in many instances, from one of the commercial banks operating in Papua New Guinea, all of which have been appointed as authorized dealers under the Foreign Exchange Regulations with delegated authority to authorise transactions within certain limits.



The Foreign Exchange Regulations describe but do not define who are considered to be residents of Papua New Guinea for exchange control purposes.  For companies, those which are locally incorporated or which are foreign companies actively operating in Papua New Guinea on a branch basis are regarded as residents.  However, with a foreign company, it is the local branch as distinct from the overseas head office that is treated as a resident.  The Company has a Papua New Guinea subsidiary for carrying out its activities in the country.





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Under the Foreign Exchange Regulations, the Central Bank also controls the proceeds of exports. Normally, proceeds of the export and sale of goods overseas must be remitted to Papua New Guinea and converted into Papua New Guinea currency (Kina).  However, in the case of large mining projects, currency exchange concessions are generally granted under the negotiated Mining Development Contract at the time when a project proceeds to development under a Special Mining Lease (see Mineral Tenure Guidelines below).  Typically, these concessions include permission to retain certain funds in foreign currency in offshore accounts on a three month rolling basis to meet:



(a)

debt service payments in foreign currency to offshore lenders;



(b)

payments in foreign currency for goods and services supplied from outside Papua New Guinea; and



(c)

dividend payments to non-Papua New Guinea shareholders on a quarterly basis out of distributable profits from the mining project.



The Company does not currently have these concessions but would look to negotiate for them if it proceeds to develop a major mining project in Papua New Guinea under a Special Mining Lease and Mining Development Contract (each term defined below).



Under the Foreign Exchange Regulations, authority from the Central Bank is required for any person in Papua New Guinea to export gold or sell it to a person resident outside Papua New Guinea.  In the past, such authority has been readily forthcoming for gold producers in Papua New Guinea.  However, under a Mining Development Contract, the Papua New Guinea Government may require a percentage of the gold produced from a project to be refined in Papua New Guinea if this can be done by a local refiner producing an internationally acceptable and marketable product on commercially competitive terms.



No other licence or approval is necessary to export gold from Papua New Guinea.



Mineral Tenure Guidelines



The Mining Act enacted by the Papua New Guinea government became effective on August 26, 1992.  The Mining Act and related regulations cover all the salient points of the application process, land tenure, responsibilities and reporting guidelines for exploration and mining companies as well as compensation matters and issues relating to the local population.



Recent changes have been made to the legislation governing mining in Papua New Guinea including the coming into operation of the MRA Act on 1 January 2006 and subsequent amendments to various provisions of the Mining Act (See Item 4. - Information On The Company - B. Business Overview).



Key to the exploration industry is the Mining Warden's office that deals with land compensation matters for local landowners and provides government-sponsored public hearings to ensure landowners and indigenous residents understand the purpose and method of mineral exploration and development.  Such hearings are intended to establish productive public relations and community awareness at the onset of exploration and to allow all parties to assess the degree of community receptiveness to potential development.



An EL confers on the holder the right to carry out exploration for minerals over a defined area and to enter and occupy the land and to take samples of rock, earth, soils or minerals for the purposes of carrying out exploration.  An EL is normally granted for two years and is renewable on a discretionary basis for an indefinite number of two-year periods, provided work and expenditure commitments under the EL have been fulfilled.  For an EL exceeding an area of 30 sub-blocks, a reduction of at least 50% of the tenement area is generally required upon each renewal; however, where the area of the EL does not exceed 75 sub-blocks, the licence holder may apply for a waiver of the relinquishment.





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Following the renewal of EL 1093 on 29 August 2004, the area of EL 1093 remains at 65 sub-blocks, the Minister for Mining having waived the requirement for relinquishment of one-half of the area of the licence upon renewal.  Minimum expenditure commitments under an EL are K300 per sub-block per year in the first two-year term of an EL, K700 per sub-block per year in the second two-year term of an EL and K1500 per sub-block per year in the third and subsequent terms of an EL.  One kina is approximately equal to Cdn.$0.40 and there are approximately 3.4 square kilometres in each sub-block.



A major mine would be developed on a Special Mining Lease (SML) granted by the Governor General on the advice of the National Executive Council.  The mine developer is usually required to enter into a Mining Development Contract with the Government of Papua New Guinea in relation to each major or very large mine.  Any such agreement would be based on the format of the Government's Standard Mining Development Contract, although various parts of this Contract are open to negotiation depending on the particular circumstances of each development.



Small and medium mines can be developed on a Mining Lease (ML).  The grant of an ML requires only the approval of the Minister for Mining.  If an EL has been granted with respect to a particular property, then an application for an SML or an ML may only be made by the holder of the EL, on its own or together with its proposed transferee.



The Papua New Guinea Government has a policy of reserving its right to acquire at cost up to a 30% participating interest in any major mineral development in Papua New Guinea.  To exercise this right, the government repays the developer 30% (or such lesser percentage interest as is to be acquired by the government) of the developer's accumulated costs to that date and commits to fund its 30% (or the lesser interest to be acquired by the government) share of ongoing development costs.  EL 1093 contains a condition granting this 30% acquisition right to the government.



Under the Mining Act, all dealings concerning a legal or equitable interest in a mineral tenure are subject to approval by the Minister for Mining as well as a requirement for registration in the Register of Tenements.



Taxation



The rate of income tax under an SML for resident corporations is 35%.  The rate of income tax for an ML is 25%.  Dividends paid by resident corporations to foreign shareholders are subject to withholding tax at a rate of 17%.  The tax legislation relating to large mining operations provides relief from taxation in the initial years of the life of a mine, referred to as the investment recovery period, by allowing accelerated tax deductions for capital expenditures, including exploration expenditures on the property in question and, to a lesser extent, on other exploration licences throughout Papua New Guinea in the previous 11 years.  In addition to income tax, there is provision for an Additional Profits Tax which is calculated on the net cash receipts from a project and is payable when the rate of return on capital invested exceeds a specified level.  For each mine, a company is entitled to a return on capital invested at the rate of 20% after income tax but before the Additional Profits Tax is payable unless, in the first 90 days following the granting of an SML, it has elected to have the allowed rate of return set at 12% plus the average annual United States of America prime interest rate.  The rate of Additional Profits Tax is (70-n) where n is the applicable rate of income tax.  The structure of and scheduling of capital investment and the various available deductions has meant that on mining projects in Papua New Guinea over the past 30 years Additional Profits Tax has rarely been paid.  The Companys Papua New Guinea subsidiaries are currently delinquent in the filing of Papua New Guinea tax returns.



A royalty is payable on all mine products to the Government of Papua New Guinea at the rate of 2% of the value of the mineral ore sale price, where the mine products are directly or indirectly exported from Papua New Guinea, or the net smelter returns applicable to deliveries of mine products where the mine products are smelted and refined in Papua New Guinea.  0.75% of the amount of this royalty can be used as a tax credit in years subsequent to payment of the royalty and 1.25% of the royalty is deductible against income.





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Environment



Protection of the environment of Papua New Guinea is regulated by the Environment Act 2000 which came into operation on 1 January 2004.  The Minister for the Department of Environment and Conservation is responsible for the Act.  The Director is responsible for the administration of the Act and an Environment Council is established, whose role is to provide advice to the Minister or Director. All mine developments require an approved environmental plan prepared in accordance with the Environment Act 2000. Licences may also be required under the Environment Act 2000.



The requirements for environmental plans in Papua New Guinea are less rigorous than the environmental impact statements required in North America.  However, it is considered prudent for any exploration project, and the Company intends its project, to meet generally accepted international environmental standards.



Lewis Property, Nevada



Title



The Company, along with Great American Minerals, Inc. (GAM) (formerly Great American Minerals Exploration LLC), (collectively, the Phoenix Joint Venture) acquired, pursuant to an exploration and option to purchase agreement dated June 1, 2002 (the Lewis Agreement) with F.W. Lewis, Inc. (Lewis) the rights to jointly acquire a 100% interest in the Lewis Property,a contiguous block of 381 unpatented and 8 patented claims located in Lander County covering some 20 square miles in the Battle Mountain District of central Nevada.



From June 2002 to December 2007, the Phoenix Joint Venture fulfilled all their obligations to exercise the option and in December 2007 paid the specified purchase price of $2,000,000 acquiring a 100% interest in the Lewis Property. The Lewis Property is subject to an advance minimum royalty of US$60,000 per year commencing on the exercise of the purchase option, a 5% gross royalty on gold and a 4% net smelter returns royalty on all other metals in favour of Lewis, now held by Allied Nevada Gold Corp. (parent company of Victory Exploration Inc. formerly Lewis).  These royalties can be purchased for US$4,000,000 for a period of one year following the exercise of the purchase option, after which the purchase price for the royalties increases by US$500,000 per annum on each anniversary of the date of exercise of the purchase option.



The rights of the Company and GAM concerning the Lewis Agreement are governed by a joint venture agreement between them dated March 29, 2006 (the JV Agreement).  The initial interests of the Company and GAM in the joint venture to acquire the Lewis Property are 60% and 40%, respectively.  Under the terms of the JV Agreement, the Company and GAM must bear all future costs associated with the exploration and development of the Lewis Property on a pro rata basis, or their interests will be subject to dilution.



Location, Access & Physiography



The Lewis Property consists of a contiguous group of 361 unpatented and 8 patented mining claims comprising approximately 2,225 hectares.  It is located within T. 31 N., R. 43 E.  Sections 2-5, 8-11, 15-16 and 20-21 and, T. 32 N., R. 43 E.  Sections 32 and 34 Battle Mountain Mining District, Lander County, Nevada.  The Lewis Propertyis situated approximately 19 kilometres southwest of the town of Battle Mountain, Nevada, the nearest population centre.  Access to the Lewis Property is excellent with year round four-wheel-drive vehicle the preferred method.  Travelling 15 kilometres south from Battle Mountain on State Highway 305 and then west for an additional 8 kilometres along the improved gravel and dirt-based Galena Canyon road allows access to the central portion of the property.  A series of drill roads provides adequate access to many other parts of the Lewis Property.



The Lewis Property is situated in a region of moderate to locally steep relief in north central Nevada, at elevations ranging from 1,525 to 2,400 metres above sea level.  Vegetation consists of sparse sagebrush with local juniper and cottonwood trees.  The climate is hot and semi-arid in the summer with occasional snow in winter.  The operating season is year round.



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Plant and Equipment



At present, there is no underground or surface plant or equipment on the Lewis Property.



Regional and Local Geology



The Lewis Property is located in the Battle Mountain Range, in the Battle Mountain Mining District.  The Battle Mountain mineral trend hosts a number of significant modern and historic gold mines.  Most of the historic production was from high-grade underground deposits. Modern producers include Lone Tree, Trenton Canyon, Marigold and Phoenix-Fortitude.



In the Battle Mountain area in general, the stratigraphy comprises Lower and Upper Paleozoic sediments and volcanics ranging in age from Cambrian to Devonian (Harmony, Valmy and Scott Canyon Formations) juxtaposed by a series of thrust faults (Valmy, Dewit and Roberts Mountain thrusts).  These older Lower Paleozoic units are unconformably overlain by sedimentary rocks of the Pennsylvanian and Permian age platformal Antler sequence (Battle Mountain, Antler Peak, and Edna Mountain Formations).  An Upper Paleozoic siliceous and volcanic basinal assemblage comprised of the Pumpernickel and Havallah Formations are thrust over the Lower and Upper Paleozoic rocks along the Golconda and Willow Creek thrust faults, forming parts of the Golconda Allochthon.  All of these formations have been intruded by small bodies of granitic rock of Tertiary age and are overlain by small patches of Tertiary and Quaternary volcanics and recent alluvium.



Rocks of the district were initially complexly folded and later faulted. Most of the faults trend northwest, north or northeast and both normal and thrust faults are common.  Important north-trending faults on the property include the Trinity, Plumas, Hayden, Virgin-Hider, Copper Canyon-Buena Vista and Willow Creek structures.



On the Lewis Property, the Devonian Scott Canyon Formation and the Early to Middle Ordovician Valmy Formation are exposed to the east below the Dewit thrust, a major splay or imbricate thrust of the Roberts Mountain sole thrust.  The Scott Canyon Formation comprises approximately 1,524 metres (5,000 feet) of chert, argillite and volcanics with lessor limestone, quartzite and sandstone.  The Early to Middle Ordovician Valmy Formation locally has been subdivided into three members.  Member 1 is composed of 544 metres (1,785 feet) quartzite, chert, black shale and volcanic; Member 2 is composed of 1,120 metres (3,675 feet) chert, shale, quartzite and volcanic and Member 3 is composed of 914 metres (3,000 feet) black shale, green and black chert.  The Scott Canyon and Valmy Formations represent a western siliceous and volcanic facies assemblage deposited in deep water adjacent to the Cordilleran platform.



The structurally overlying Late Cambrian Harmony Formation represents a transitional assemblage of quartzo-feldspathic sandstone with lessor shale, limestone and volcanic, approximately 914 metres (3,000 feet) thick, which crops out in the central portion of the property.  These formations were transported eastward along the Roberts Mountain thrust fault. The Roberts Mountain thrust fault is not exposed and is postulated to occur at depth.  The Dewit Thrust separates the Harmony Formation in the hanging wall from foot wall Scott Canyon Formation.



Unconformably overlying the allochthonous Lower Paleozoic siliceous and volcanic and transitional assemblages are autochthonous Upper Paleozoic clastics and carbonates of the Antler sequence comprising three formations.  The basal Battle Formation comprises 222 metres (730 feet) of conglomerate and sandstone with lessor interbedded shale and limestone of Pennsylvanian age.  The middle Antler Peak Formation comprises 60  518 metres (200  1,700 feet) of fossiliferous limestone with subordinate sandy and shaley layers of Late Pennsylvanian and Early Permian age.  The upper Edna Mountain Formation comprises 30  60 metres (100  200 feet) of calcareous shale, limestone, sandstone and conglomerate of Permian age.  These rocks crop out in the central part of the property along the Virgin Fault and Golconda Thrust.





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The allochthonous Havallah assemblage of Pennsylvanian to Permian age, the basinal equivalent of the Antler sequence, has been transported from the west along the Golconda sole thrust.  The Havallah assemblage, which crops out in the western part of the property, has been divided into the Pumpernickel and Havallah Formations.  The Pumpernickel Formation slope facies comprises over 1,500 metres (5,000 feet) of chert, argillite and minor volcanic separated from the Havallah Formation basinal turbidites by the Willow Creek imbricate thrust a major splay of the Golconda thrust.  The Havallah Formation, exposed west of the Willow Creek thrust, has been subdivided into three members.  The oldest Jordy member comprises 387 metres (1,272 feet) of sandstone, chert, shale and conglomerate; the middle Trenton Canyon member, 300 metres (1,000 feet) of varied colour shale and chert; and the upper Mill Canyon member, 727 metres (2,385 feet) of quartzite, calcareous sandstone, shale, chert and conglomerate.



Late Cretaceous to Pliocene magmatism affected large parts of the Battle Mountain mining district.  The Late Cretaceous plutonic bodies at Trenton Canyon and in the Buckingham area produced porphyry molybdenum type mineralization (Theodore et. al, 1992). Most of the plutonic rocks in the area are late Eocene to early Oligocene in age (Theodore et al, 1973).  These include the granodiorites of Copper Canyon and intrusives at Copper Basin and Buffalo Valley all of which were responsible for the formation of significant copper-gold-silver mineralization that has been mined since the 1870s (Theodore et al, 1975, 1990).



Early Oligocene welded ash-flow tuffs of the Caetano Tuff cap some of the higher ridges. The Caetano Tuff is coeval and comagmatic with the granodiorite intrusions.  Pliocene basalts locally cover some areas of lower elevation.  Recent alluvium locally fills the valley bottoms.



The complex Paleozoic structural history is further complicated by Mesozoic and Tertiary deformation, indicated by northwest, north, and northeast-trending structures.  Northwest-trending structures are commonly granodiorite dykes and broad folds.  North-trending normal faults are common throughout the district.  Some are pre-Eocene in age, probably reflecting the onset of Basin and Range extensional tectonics.  Locally they controlled the emplacement of intrusives and hydrothermal fluids as for example the Virgin Fault at Copper Canyon (Theodore & Blake, 1975).  Other north-trending faults, such as the range fronts, show Quaternary movement. Northeast-trending normal faults may represent the Midas trend in this part of north central Nevada.



Mineralization



Sulphide mineralization is vertically and concentrically zoned about the intrusions and along northerly-trending structural conduits as veins, replacements and disseminations. The mineral zones roughly correspond to the silicate mineral alteration zones, with an inner copper-gold, a middle gold-silver, an outer lead-zinc-silver-gold and possible distal arsenic-antimony zonation. Sulphide minerals on the Lewis Property include pyrite, galena, sphalerite, chalcopyrite, bornite, stibnite, arsenopyrite, pyrrhotite and tetrahedrite, which occur with a calcite-quartz gangue.  Known mineralization is confined to the sedimentary wallrocks and structural conduits and is controlled by the reactive (calcareous) lithology, structure and proximity to intrusions.





Exploration History



Mining in the Battle Mountain mining district dates back to 1863 when silver was discovered in Galena Canyon in the south-central part of the district.  Discoveries of copper and silver in the vicinity of Copper Canyon in 1864 led to the formation of the Battle Mountain mining district in 1866.  The Central Pacific Railroad came through in 1869 and aided in the development of the area.  Several small mills and smelting works were soon in operation at Galena Canyon and thirty small near surface oxidised and enriched ore bodies by 1885, and the district was quiet until 1909 when gold was discovered at Bannock near the present-day access to Copper Canyon.





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Copper deposits at Copper Canyon and Copper Basin were actively mined by underground methods during both Worlds Wars.  Duval Corp. acquired the copper properties in 1961 and began large-scale open-pit operations at both Copper Canyon and Copper Basin in 1967.  Copper mining continued until 1981 when depressed prices caused operations to be suspended.  Duval Corp. continued mining gold and silver which had started with the discovery of precious metal skarns at the Tomboy and Minnie deposits in the mid 1970s.  Discoveries of the Upper and Lower Fortitude deposits at Copper Canyon soon followed in 1980.  In 1980, Hart River Mines optioned the Lewis Property and, during the next five years, conducted drill exploration on a number of historic mineral occurrences including the Virgin, Buena Vista, Hider, White & Shiloh and Trinity showings.  In December of 1984, the Battle Mountain Gold Mining Co. was formed to assume the gold mining operations of Duval Corp., including the newly discovered Fortitude deposit at Copper Canyon.  The Lower Fortitude orebody produced over 71.5 metric tonnes (2.3 million ounces gold) and 336 metric tonnes (10.8 million ounces silver).



In 1986, American Barrick optioned the Lewis Property.  During the next three years they conducted geological mapping, geochemistry, geophysics and drilled a number of historic mineral occurrences (Virgin, Buena Vista, Trinity and Hider) as well as several new exploration targets in the south and southwest and at Antler Peak to the north.  Homestake joint ventured with Barrick and reinterpreted the data before terminating the agreement in 1989.  F.W. Lewis worked the property from 1989 until 1994 when it was optioned by Santa Fe Pacific Gold Corp. who conducted drilling at Hider target and at the historic Trinity occurrence.  F.W. Lewis Inc. negotiated a new boundary agreement in 1996 with Battle Mountain Gold.  Nighthawk North Exploration and United Tex-Sol optioned the Lewis Property in 1996-97 and completed detailed drilling at the historic Virgin-Blossom occurrence.  In 1998, Golden Phoenix optioned the property and redrilled three of the earlier Barrick holes (FWL 39, 43, 47).



Battle Mountain Gold merged with Hemlo Gold Mines in 1996.  Battle Mountain Gold announced that the new proposed Phoenix project contained a 168 metric tonne (4.9 million ounce) gold reserve in 1999. Battle Mountain Gold was bought by Newmont Mining in 1999 following their earlier acquisition of Santa Fe Pacific Gold Corp. making Newmont the largest land holder and gold producer in the district.  Following the amalgamation, Newmont announced in 2000 a 6 million-ounce gold reserve at the Phoenix/Fortitude project.  Newmont optioned the Lewis Property in 2000 and conducted drilling in the Antler Peak area before terminating the agreement.



Exploration within the Lewis Property has outlined a virtually identical geological environment to that underlying the Phoenix-Fortitude area, including a direct on-strike extension to the hosting Antler Sequence stratigraphy (Edna Mountain, Antler Peak and Battle Formations), controlling structures (Virgin and Copper Canyon Structural Zones) and mineralization style.  The Lewis Property covers an area including a three mile strike extent of highly prospective ground northward along this favourable stratigraphic-structural corridor.



The most advanced gold target on the Lewis Property is the Virgin Structural Zone. Surface exposures and limited preliminary drilling by previous operators have partially traced the Virgin Structural Zone for a minimum strike length of approximately 1,000 feet on the Lewis Property.  On the adjacent Phoenix-Fortitude Property and within the Fortitude deposit in particular, the Virgin Structural Zone acts as a major ore-bearing host and mineralising conduit to the favourable calcareous Antler Sequence stratigraphy, host to the majority of Newmonts reported reserves.



In November 2002, the Company carried out an initial nine hole 5,835-foot reverse circulation drilling program on the Lewis Property.  This program tested stratigraphic and structural targets along a 400-foot north-south extent of the Virgin Structural Zone, starting four hundred feet north of the Newmont boundary.  The objectives of this initial phase of exploration drilling were to confirm geology, structure, mineralization and continuity and expand the along-strike and up-dip extensions of Virgin style mineralization identified by previous operators.



The drilling successfully met its objectives and encountered mineralization in all of the holes.  Compilation and interpretation of previous drilling results and the Companys recently obtained drilling results, confirms that the mineralising system at the Fortitude deposit (the Virgin Structural Zone) continues on to the Lewis Property for considerable distance.   These results also suggest that the Virgin Structural Zone is open to expansion in every direction.





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Through 2003, the Company continued to focus its exploration on the Virgin Structural Zone.  The Company carried out preliminary structural mapping, geochemical and geophysical (9 line km MT-IP) surveying and drilled 24 holes totalling 18,050 feet on the Virgin Structural Zone for a cumulative total of 33 holes totalling 23,885 feet.



Results suggest that the Virgin Structural Zone is comprised of two distinct styles of mineralization: sub-vertical, structurally controlled mineralization and sub-horizontal stratigraphically controlled mineralization.  Drilling has confirmed excellent lateral and vertical continuity of mineralization from surface to a minimum depth of 700 feet.  The gold-bearing mineralization, at least 1,850 feet in strike extent, takes the form of a continuous sub-vertical, linear body with a series of sub-horizontal, amoeba-shaped zones.



Exploration - Recent Results



During the summer of 2004, the Company undertook a preliminary prospecting and sampling program at the Lewis Property.  Exploration was conducted north and northeast of the Companys previous drilling along the Virgin Structural Zone.  Target areas evaluated included the Trinity, White & Shiloh and Hider structural trends.



The exploration program included analysis of 25 rock samples and approximately 200 soil samples.  A number of encouraging precious metal and base metal results were identified, worthy of follow-up evaluation.  The soil sampling was over four widely spaced grid lines at the Trinity structural trend.  Results from a mobile metal ion analysis of the soil samples has partially outlined a nearly continuous, geochemically anomalous trend measuring a minimum of 3,000 metres in length and averaging 40 to 50 metres in width.  Additional sampling and prospecting follow-up is warranted based on these results.



During the fiscal year ending October 31, 2005, the Company did not undertake any additional field exploration at the Lewis Property.



From August to November 2006, the Company undertook forty-nine reverse circulation drill holes totalling 31,690 feet and collected 6124 samples for analysis.  Seven widely spaced holes totalling 5,400 feet tested a 1,800 foot strike extent of the Buena Vista mineral trend.   The Buena Vista is a subparallel northwest trending zone of historic mineralization located 1,640 feet west across the valley from the Virgin Zone.  Drilling intersected potentially economic mineralization in five of the holes, confirming the potential of this subparallel mineral trend.



Forty-two holes totalling 26,290 feet were drilled as in-fill and step-out holes along a 2,000 foot strike length of the northwest trending Virgin Mineral trend.   Fifty-foot in-fill holes have been completed along a 800 foot segment of the south central Virgin Zone.    Step-out drilling extended the zone to the south and along strike to the north.  Drilling confirmed excellent lateral and vertical continuity of both styles of mineralization: subvertical structural and subhorizontal stratagraphic controlled.   In addition drilling has identified several new mineralized cross-structures.   These cross-structures appear to localize higher grade mineralization at structural intersections.



From July to November 2007 the Phoenix Joint Venture undertook ten core & thirty-four reverse circulation drill holes totalling 31,643 feet.  Ten core holes were drilled to evaluate structure, geology and confirm previous RC drill results.  Thirty-four reverse circulation holes were drilled as infill  and stepout holes at 100 foot centres along three north-south drill sections to test the Virgin Zone mineralization along strike to the north and down-dip to the west and enable the company to define a future preliminary resource estimate.  The program met its objective intersecting previous metal mineralization in all the holes and confirming previous RC drill results.



The Company intends to undertake further drilling on the Virgin and Buena Vista mineral zones including both reverse circulation and core drilling. Programs and budgets for 2008 have not been established but are expected to be significant, focusing on continued drilling.





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39



In addition the Company carried out an Induced Potential (IP) geophysical survey to further define areas of interest within and along the strike of both the Virgin and Buena Vista mineral trends.  Zonge Geophysics of Reno was contracted and completed twenty lines of IP survey, totaling 57,500 feet, approximately ten miles.





ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS



A.

Operating Results



The Company is in the business of the acquisition, exploration, exploration management and sale of mineral properties, with the primary aim of advancing them to a stage where they can be exploited at a profit.  At that stage, the Company's operations would, to some extent, be dependent on the prevailing market prices for any of the minerals produced by such operations.  The Company does not currently have any producing properties and its current operations on its various properties are exploratory searches for mineable deposits of minerals.  During the fiscal year ended October 31, 2007, the Company was primarily engaged in the continued exploration of its Lewis Property in Nevada.  The Company has no plans to conduct any further exploration on its Mt. Kare Property in Papua New Guinea at the present time as all proposed work is being carried out by Buffalo Gold Ltd. (Buffalo) as part of its option, as amended during the year, to acquire, initially, a 60% interest in Madison Enterprises (PNG) Ltd., the holder of the Mt. Kare Property.  The Companys potential future mineral exploration and potential mining activities on the Mt. Kare Property may be affected in varying degrees by Papua New Guinea's political stability and government regulation, all of which are beyond the control of the Company.  See Item 3 -  Key Information - D. Risk Factors.



As at October 31, 2007, the Company had incurred $4,414,539 in option fees and exploration costs at its Lewis Property in Nevada.  During the fiscal year ended October 31, 2007, the Company incurred option and exploration expenditures of $1,557,572 on the Lewis Property, comprised of assay costs of $240,446, camp costs of $19,730, contractors and geological staff costs of $262,244, drilling costs of $875,964, geological supplies and equipment costs of $18,204, insurance costs of $6,845, land and legal costs of $38,293, option fees of $33,211, travel and accommodation costs of $32,825 and trenching costs of $29,810.



Exploration within the Lewis Property has outlined a virtually identical geological environment to that underlying the Phoenix-Fortitude area, including a direct on-strike extension to the hosting Antler Sequence stratigraphy (Edna Mountain, Antler Peak and Battle Formations), controlling structures (Virgin and Copper Canyon Structural Zones) and mineralization style.  The Lewis Property covers an area including a three mile strike extent of highly prospective ground northward along this favourable stratigraphic-structural corridor.



The most advanced gold target on the Lewis Property is the Virgin Structural Zone. Surface exposures and limited preliminary drilling by previous operators have partially traced the Virgin Structural Zone for a minimum strike length of approximately 1,000 feet on the Lewis Property.  On the adjacent Phoenix-Fortitude Property and within the Fortitude deposit in particular, the Virgin Structural Zone acts as a major ore-bearing host and mineralising conduit to the favourable calcareous Antler Sequence stratigraphy, host to the majority of Newmonts reported reserves.



The Company intends to undertake a further drilling on the Virgin and Buena Vista mineral zones including both reverse circulation and core drilling.  Programs and budgets for 2008 have not been established but are expected to be significant, focusing on continued drilling.



The Companys significant accounting policies are summarized in Note 2 to the consolidated financial statements.   The preparation of the Companys consolidated financial statements in conformity with generally accepted accounting principles in Canada requires management to make judgements with respect to certain estimates and assumptions.   These estimates and assumptions, based on managements best judgment, affect the reported amounts of certain assets and liabilities, including disclosure of contingent liabilities. Management re-evaluates these estimates and assumptions on an ongoing basis. Actual amounts, however, could differ significantly from those based on such estimates and assumptions.



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40





Significant areas critical in understanding the judgements that are involved in the preparation of the Companys consolidated financial statements and the uncertainties inherent within them include the treatment of mineral property expenditures, asset retirement obligations, foreign currency translation and stock-based compensation.



Mineral Properties



All costs related to the acquisition, exploration and development of mineral properties are capitalized by property.  If economically recoverable ore reserves are developed, capitalized costs of the related property are reclassified as mining assets and amortized using the unit of production method.  When a property is abandoned, all related costs are written off to operations.  If, after management review, it is determined that the carrying amount of a mineral property is impaired, that property is written down to its estimated net realizable value.  A mineral property is reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.



The amounts shown for mineral properties do not necessarily represent present or future values.  Their recoverability is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and future profitable production or proceeds from the disposition thereof.



Asset Retirement Obligations



The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made.  The carrying amount of the related long-lived asset is increased by the same amount as the liability.



Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation.  The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations.  Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease to the carrying amount of the liability and the related long-lived asset.



Foreign Currency Translation



Foreign operations are integrated and translated using the temporal method.  Under this method, monetary assets and liabilities are translated at period-end exchange rates, non-monetary assets and liabilities are translated at rates prevailing at the respective transaction dates, and revenue and expenses, except for amortization, are translated at rates approximating those in effect at the transaction dates.  Translation gains and losses are reflected in the loss for the period.  Monetary accounts of the Company denominated in foreign currency are translated at the period-end exchange rate.  Exchange gains and losses on translation are recognized in the period they arise



Stock-based Compensation



The fair value of stock options granted is determined using the Black-Scholes option pricing model and recorded as stock-based compensation expense over the vesting period of the stock options.



Fiscal Year Ended October 31, 2007 Compared to Fiscal Year Ended October 31, 2006



During the fiscal year ended October 31, 2007, the Company recorded a recovery of resource property costs previously written down of $3,366,331, interest earned of $236,044, project management fees of $142,425 and a foreign exchange loss of $128,600. During the fiscal year ended October 31, 2006 the Company recorded a recovery of resource property costs previously written down of $150,000, interest earned of $44,607, a foreign exchange gain of $8,193 and other exploration cost recoveries of $65,023.



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41





The very material resource property cost recovery was a non-cash item resulting from a disposition of 60 per cent of the Companys interest in the Mt. Kare project in consideration for a large stock position in an arms length public company, described in detail in Notes 4 and 5 to the 2007 financial statements. This source of income is clearly of a non-recurring nature. Increased interest earned reflects much larger cash balances held in fiscal 2007 arising from a financing late in the 2006 fiscal year. The foreign exchange loss arose principally from a holding in U.S. funds during a period when that currency was declining against our reporting currency, the Canadian dollar.



Expenses for the fiscal year ended October 31, 2007 were $782,594, down significantly from $2,303,761 for the fiscal year ended October 31, 2006, principally resulting from a large reduction in stock-based compensation costs, from $1,620,691 in fiscal 2006, when a large grant to numerous optionees was made, to $54,407 in fiscal 2007, when one-half of a single grant vested. Increases of $10,000 or more occurred in salaries and benefits, public relations and travel costs arising from higher compensation and increased activities in these cost centres. No costs were incurred in fiscal 2007 in the cost centres consulting and miscellaneous property expenditures, resulting in a reduction from fiscal 2006.



Fiscal 2007 yielded net income for the year of $2,833,604 or $0.08 per share compared to a net loss in fiscal 2006 of $2,035,938, a loss of $0.08 per share. The principal components of the swing from loss to earnings were the recovery of property costs and the large reduction in stock-based compensation. The Company expects to return to a net loss position for the fiscal year ending October 31, 2008, since the property cost recovery is non-recurring.



Fiscal Year Ended October 31, 2006 Compared to Fiscal Year Ended October 31, 2005



During the fiscal year ended October 31, 2006, the Company recorded interest income of $44,607, exploration cost recoveries of $65,023, a foreign exchange gain of $8,193 and a recovery of resource property costs previously written down of $150,000.  During the fiscal year ended October 31, 2005, the Company recorded interest income of $3,674, a foreign exchange gain of $11,632, a gain on the sale of marketable securities of $785 and a write-down of resource property of $44,772,341.



Expenses for the fiscal year ended October 31, 2006 were $2,303,761, up significantly from $938,125 for the fiscal year ended October 31, 2005 primarily as a result of increased stock-based compensation charges which rose by $1,368,908 from the previous fiscal year due to the grant of incentive stock options.



The net loss for the fiscal year ended October 31, 2006 was $2,035,938 or $0.08 per share as compared with a net loss for the fiscal year ended October 31, 2005 of $45,694,375 or $2.25 per share.



Fiscal Year Ended October 31, 2005 Compared to Fiscal Year Ended October 31, 2004



During the fiscal year ended October 31, 2005, the Company recorded interest income of $3,674, a foreign exchange gain of $11,632, a gain on the sale of marketable securities of $785 and a write-down of resource property of $44,772,341.  During the fiscal year ended October 31, 2004, the Company recorded interest income of $9,258 and a foreign exchange loss of $5,352.



Expenses for the fiscal year ended October 31, 2005 were $938,125, down slightly from $974,649 for the fiscal year ended October 31, 2004.  As components of this change, consulting fees decreased by $36,454, legal fees decreased by $21,927 and public relations costs decreased by $18,196 as a result of decreased financing activity during the year.  In addition, net office and rent decreased by $64,903 and wages decreased by $43,627 as a result of revised cost sharing arrangements with the other companies with which the Company shares office space.  These decreases were offset by increases in interest charges and loan bonus due primarily to loan bonus shares valued at $27,693, stock-based compensation due to incentive stock options granted during the year and travel costs, which rose by $30,991, $90,984 and $34,323 respectively from the previous fiscal year.





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42



The net loss for the fiscal year ended October 31, 2005 was $45,694,375 or $2.25 per share as compared with a net loss for the fiscal year ended October 31, 2004 of $970,743 or $0.06 per share.





B.

Liquidity and Capital Resources



In management's view, given the nature of the Company's activities, which consist of the acquisition, exploration, exploration management and sale of mineral properties, the most meaningful and material financial information concerning the Company relates to its current liquidity and capital resources.  The Company does not currently own or have an interest in any mineral producing properties.



The Company's mineral exploration activities have been funded through sales of common shares, 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 can be no assurance, however, that the Company will be able to obtain required financing in the future on acceptable terms, or at all, and should this occur, doubt could arise about the ability of the Company to continue as a going concern.  In the near term, the Company plans to continue its exploration activities on its currently held properties.  See Item 4 - Information on the Company - D. Property, Plants and Equipment above.  Based on its existing working capital, the Company does not expect to require additional financing for its currently held properties during the upcoming fiscal year.  The Company has not carried out debt financing nor has it made use of any financial instruments for hedging purposes.  The Company had no material commitments for capital expenditures at the end of its most recent fiscal year.



Management of the Company regularly reviews the net carrying value of the Companys interest in each mineral property.  Where information is available and conditions suggest impairment, estimated future net cash flows from each property are calculated using estimated future prices, proven and probable reserves, and operating, capital and reclamation costs on an undiscounted basis.  Reductions in the carrying value of each property would be recorded to the extent the net book value of the investment exceeds the estimated future cash flows.  Where estimates of future net cash flows are not available and where other conditions such as the exploration results incurred by the Company and others suggest impairment, management assesses if carrying value can be recovered.



At October 31, 2007, the Company had working capital of $7,411,096 which management believes will be sufficient to meet the Companys general and administrative expenses and its share of the cost of the next phase of exploration on its Lewis Property for the coming year. It should be noted that as of January 31, 2008 the fair value of its holding of shares in Buffalo Gold Ltd. had diminished by $1,443,875, resulting in a reduction of working capital of the same amount. Fluctuations in the quoted market price of the shares in Buffalo Gold Ltd., in which there has recently been significant volatility, will likely continue to have a material effect on the Companys working capital. If the Company is to advance or develop its mineral properties further, it will become necessary to obtain additional funding, and while the Company has been successful in the past, there can be no assurance that it will be able to do so in the future. If such funds are not available or cannot be obtained or are insufficient to cover such costs, the Company will be forced to curtail its exploration activities to a level for which funding is available or can be obtained.  Accordingly, doubt could arise about its ability to continue as a going concern.



Other than as discussed herein, the Company is not aware of any trends, demands, commitments, events or uncertainties that may result in the Company's 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 its exploration programs on its mineral exploration properties.



October 31, 2007 Compared to October 31, 2006





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43



At October 31, 2007, the Company's current assets totalled $8,539,158 compared to $7,022,636 at October 31, 2006.  The increase is attributable principally to the receipt of 3,521,648 shares of Buffalo Gold Ltd. in October 2007, offset by the drawdown in cash resources of $1,441,700 set out in the statement of cash flows.  During the same period, total liabilities increased to $1,128,062 from $502,963. The principal components of this increase were funds advanced by our joint venture partner in the balance sheet date amount of $951,161 offset in part by a reduction in amounts owed to our exploration and other suppliers from $502,963 to $176,901. The principal component of the funds advanced by the joint venture partner was USD $800,000 for its contribution to the USD $2,000,000 option exercise price paid to the optionor in December 2007. As a result of these factors, the Company had working capital of $7,411,096 at October 31, 2007 as compared to $6,519,673 at October 31, 2006.  The Company had no long-term debt at either October 31, 2007 or October 31, 2006.



At October 31, 2007, the Company had total assets of $13,051,241 compared to $9,946,640 at October 31, 2006.  This increase is principally attributable to the market value of the Buffalo Gold shares at the 2007 year-end date.



Share capital as at October 31, 2007 was $68,001,686, up only marginally from $67,968,686 as at October 31, 2006, the $33,000 increase arising on the issue of 66,000 shares on the exercise of warrants.



The Company's largest cash outflows in the fiscal years ended October 31, 2007 and October 31, 2006 were expenditures on its Lewis Property, Nevada. During the fiscal year ended October 31, 2007, the Company incurred cash property expenditures of $1,816,867, compared to $677,521 during the fiscal year ended October 31, 2006.  The amount of exploration costs incurred by the Company fluctuates based on the scope of the exploration programs the joint venture agrees to conduct.



October 31, 2006 Compared to October 31, 2005



At October 31, 2006, the Company's current assets totalled $7,022,636 compared to $85,980 at October 31, 2005.  The increase is principally attributable to the sale of share capital.  During the same period, total liabilities increased to $502,963 from $354,936.   As a result of these same factors, the Company had working capital of $6,519,673 at October 31, 2006 as compared with a working capital deficiency of $268,956 at October 31, 2005.  The Company had no long-term debt at either October 31, 2006 or October 31, 2005.



At October 31, 2006, the Company had total assets of $9,946,640 as compared with $2,752,148 at October 31, 2005.  This increase is due to the sale of share capital.



Share capital as at October 31, 2006 was $67,968,686, up from $60,528,028 as at October 31, 2005 due to the issuance of share capital.  During the fiscal year ended October 31, 2006, the Company issued 5,000,000 common shares at a price of $0.28 per share pursuant to a private placement to generate net cash proceeds of $1,277,960, 6,300,000 common shares at a price of $0.85 per share pursuant to a private placement to generate net cash proceeds of $5,186,639, 218,037 shares recorded at a value of  $63,231 in payment of accrued wage expenses and legal fees, 559,400 shares pursuant to the exercise of stock options to generate net proceeds of $203,652 and 1,460,460 shares pursuant to the exercise of warrants to generate net proceeds of $730,230.



The Company's largest cash outflows in the fiscal years ended October 31, 2006 and October 31, 2005 were expenditures on investment in its mineral properties, namely the Mt. Kare Property and the Lewis Property.  During the fiscal year ended October 31, 2006, the Company incurred property expenditures of $775,059, compared to $1,481,287 during the fiscal year ended October 31, 2005.  The amount of exploration costs incurred by the Company fluctuates based on the scope of any exploration program the Company carries out during a specific period and cash available.



October 31, 2005 Compared to October 31, 2004



At October 31, 2005, the Company's current assets totalled $85,980 compared to $119,613 at October 31, 2004.  The decrease is attributable to expenditures resulting from its investment in the Mt. Kare Property and the Lewis Property and general and administrative expenses.  During the same period, total liabilities decreased to $354,936 from $728,501.   As a result of these same factors, the Company had a working capital deficiency of $268,956 at October 31, 2005 as compared with a working capital deficiency of $608,888 at October 31, 2004.  The Company had no long-term debt at either October 31, 2005 or October 31, 2004.



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44





At October 31, 2005, the Company had total assets of $2,752,148 as compared with $46,127,849 at October 31, 2004.  This decrease is due to a write-down of the Mt. Kare Property to $500,000 during the year due to the uncertainty of the recoverability of the historical carrying value of the property.



Share capital as at October 31, 2005 was $60,528,028, up from $58,131,339 as at October 31, 2004 due to the issuance of share capital.  During the fiscal year ended October 31, 2005, the Company issued 3,655,100 common shares at a price of $0.65 per share pursuant to a brokered private placement to generate net cash proceeds of $2,171,200, 800,000 common shares at a price of $0.25 per share pursuant to a non-brokered private placement to generate net cash proceeds of $200,000, 36,924 shares recorded at a value of  $27,693 as a loan bonus, 156,839 shares recorded at a value of  $41,563 to pay accrued wages and 60,000 shares recorded at a value of  $39,000 as a corporate finance fee in connection with the brokered private placement.



The Company's largest cash outflow in the fiscal years ended October 31, 2005 and October 31, 2004 was expenditures resulting from its investment in mineral properties, namely its Mt. Kare Property and its Lewis Property.  During the fiscal year ended October 31, 2005, the Company incurred property expenditures of $1,481,287, compared to $2,694,115 during the fiscal year ended October 31, 2004.  The amount of exploration costs incurred by the Company fluctuates based on the scope of any exploration program the Company carries out during a specific period and cash available.



Material Differences between Canadian and U.S. Generally Accepted Accounting Principles



Mineral property costs and related exploration expenditures are accounted for in accordance with Canadian GAAP which permits the deferral of most acquisition and exploration costs incurred on mineral projects. Under U.S. GAAP, the Company is required to expense, as incurred, exploration costs relating to unproven mineral properties, and only capitalizes certain limited acquisition costs.



With the adoption of new Canadian accounting standards as described in Note 3 to the 2007 year-end financial statements, there is no longer a difference in the accounting treatment of marketable securities between Canadian GAAP and U.S. GAAP. This is set out in Note 17(c).



Outlook



For the remainder of the fiscal year ending October 31, 2008, the Companys activities will continue to focus on the exploration of the Lewis Property. All proposed work on the Mt. Kare Property will be carried out by Buffalo Gold Ltd. pursuant to the agreements by which it has acquired a 60% interest in Madison Enterprises (PNG) Ltd., the holder of the Mt. Kare Property and formerly the Companys subsidiary.  Based on its existing working capital, the Company does not expect to require additional financing during the upcoming fiscal year.  The Company had no material commitments for capital expenditures at the end of its most recent fiscal year.



C.

Research and Development, Patents and Licenses, etc.



As the Company is an exploration company with no producing properties, the information required by this section is inapplicable.



D.

Trend Information



As the Company is an exploration company with no producing properties, the information required by this section is inapplicable.





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45





E.

Off-Balance Sheet Arrangements



The Company has no off-balance sheet arrangements.



F.

Tabular Disclosure of Contractual Obligations



The Company has no contractual obligations of the type required to be disclosed in this section.





ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A.

Directors and Senior Management



Ian Brown



Mr. Brown is the Chief Financial Officer of the Company. He has been a Chartered Accountant, the Canadian equivalent of a CPA, for over 32 years. He has served as an executive of mineral exploration companies, including in numerous roles as CFO and/or as member of boards of directors and audit committees, for over 29 years. Mr. Brown is 60 years old.



Vivian Danielson



Ms. Danielson was appointed a director of the Company effective February 6, 2008.  She is a journalist and author with more than 20 years of experience covering the international mining and metals sector. She has worked as an editor for The Northern Miner from 1994 to 2001. Ms. Danielson is 56 years old.



Nell Dragovan



Ms. Dragovan is a director of the Company.  She is a financier with a long, successful history of organising and financing junior resource companies in Canada.  In 1980, she founded Corona Explorations that discovered the Hemlo gold deposits in Northern Ontario.  Ms. Dragovan is 58 years old.



Chet Idziszek



Mr. Idziszek is a director and President of the Company.  He has worked as a manager and senior geologist for a number of international mining companies since 1971.  In 1990, he received the Mining Man of the Yearaward in recognition of his vital role in the discovery and development of the Eskay Creek Deposits in Northwestern British Columbia.  He also received the Prospector of the Year Awardin 1994, again, in recognition of the major role he played in the discovery and development of the Eskay Creek Deposits, as well as for his leadership of Adrian Resources Ltd. (now called Petaquilla Minerals Ltd.) during its exploration and development of the Petaquilla copper-gold deposits in Panama.  Mr. Idziszek is 60 years old.



Robert Sibthorpe



Mr. Sibthorpe is a director of the Company.  Mr. Sibthorpe holds a B.Sc. in geology and an M.B.A. from the University of Toronto.  He has worked as a mining analyst and director of Yorkton Securities Inc. in Vancouver from 1986 to 1996.  He was an independent mining consultant from 1996 to 1999 when he joined Canaccord Capital Corporation as a mining analyst from 1999 to 2001.  Since 2001 he has worked as an independent mining consultant.  Mr. Sibthorpe is 59 years old.





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46



J.G. Stewart



Mr. Stewart is a director and the Secretary of the Company.  Mr. Stewart is a lawyer who has practised law in both private practice and as corporate counsel since 1984 and has extensive experience in the fields of mining, corporate finance and securities law.  Mr. Stewart is 49 years old.



B.

Compensation



During the fiscal year ended October 31, 2007, the Company paid or accrued a total of $235,980 in cash compensation to its directors and officers.  This amount does not take account of incentive stock options granted to or exercised by such directors and officers or other non-cash compensation, as more particularly described below.  No other funds were set aside or accrued by the Company during the fiscal year ended October 31, 2007 to provide pension, retirement or similar benefits for directors or officers of the Company pursuant to any existing plan provided or contributed to by the Company or its subsidiaries under applicable Canadian laws.



The Company is required, under applicable securities legislation in Canada to disclose to its shareholders details of compensation paid to its executive officers.  The following fairly reflects all material information regarding compensation paid to the Companys executive officers which has been disclosed to the Companys shareholders under applicable Canadian law.



Cash and Non-Cash Compensation  Executive Officers and Directors



The Company currently has two executive officers: Chet Idziszek, President and Chief Executive Officer; and Ian Brown, Chief Financial Officer (the Named Executive Officers). Until March 31, 2007 Naomi Corrigan was the Chief Financial Officer. Mr. Brown commenced his duties April 15, 2007. Ms. Corrigan continues as a consultant.



The following table sets forth all annual and long term compensation for services in all capacities to the Company for the fiscal years ended October 31, 2007, 2006 and 2005 in respect of the individuals who were, at October 31, 2007, the Named Executive Officers:



Summary Compensation Table





|                                        |                                |                                            |                                      |                                               |                                                                        |                                                                                   |                             |                                             | 
|--------------------------------------- | ------------------------------ | ------------------------------------------ | ------------------------------------ | --------------------------------------------- | ---------------------------------------------------------------------- | --------------------------------------------------------------------------------- | --------------------------- | ------------------------------------------- | 
|Annual Compensation                     | Long Term Compensation        
|                                        |                                |                                           
|                                        | Awards                         | Payouts                                   
|                                        |                                |                                            |                                      |                                               |                                                                        |                                                                                   |                             |                                            
|Name and Principal Position             | Year                           | Salary
        ($)                         | Bonus
        ($)                    | Other Annual
        Compensation
        ($) | Securities 
        Under
        Options 
        granted
        (#) | Restricted 
        Shares or 
        Restricted
        Share Units
        ($) | LTIP Payouts
        ($)    | All Other 
        Compensation
        ($)
|                                        |                                |                                            |                                      |                                               |                                                                        |                                                                                   |                             |                                            
|Chet Idziszek
        President and CEO | 2007
        2006
        2005 | $126,078
        $142,897
        $157,870 | $3,000
        $3,000
        $3,000 | nil
        nil
        nil                   | nil
        350,000
        80,000                                     | N/A
        N/A
        N/A                                                       | N/A
        N/A
        N/A | $23,040
        nil
        nil            
|Ian Brown,
        CFO                  | 2007
        2006
        2005 | $25,000
        N/A
        N/A            | nil
        N/A
        N/A          | nil
        N/A
        N/A                   | 200,000
        N/A
        N/A                                        | N/A
        N/A
        N/A                                                       | N/A
        N/A
        N/A | nil
        nil
        nil                
|Naomi Corrigan,
        CFO             | 2007
        2006
        2005 | $31,003
        $25,718
        $27,721    | nil
        nil
        nil          | nil
        nil
        nil                   | nil
        50,000
        nil                                         | N/A
        N/A
        N/A                                                       | N/A
        N/A
        N/A | nil
        nil
        nil                



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47





Option Grants in Last Fiscal Year



The following table summarizes the stock options granted to the Named Executive Officers during the fiscal year ended October 31, 2007:



|                                        |                                                                                                                                                                                                                                                                                                                                                                                         |                                             |                                             |                                                                                                |                 |  | 
|--------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------- | ---------------------------------------------------------------------------------------------- | --------------- |  | 
|Name                                    | Options Granted
        (# shares)                                                                                                                                                                                                                                                                                                                                                      | % of Total 
        Options
        Granted | Exercise
        Price
        ($/share)(1) | Market Value of Shares 
        Underlying Options at Date 
        of Grant
        ($/share) | Expiration Date
|Chet Idziszek
        President and CEO | NIL                                                                                                                                                                                                                                                                                                                                                                                     | N/A                                         | N/A                                         | N/A                                                                                            | N/A            
|Ian Brown
        CFO                   | 200,000                                                                                                                                                                                                                                                                                                                                                                                 | 100%                                        | $0.77                                       | $0.77                                                                                          | April 27, 2012 
|Naomi Corrigan,
        CFO             | NIL                                                                                                                                                                                                                                                                                                                                                                                     | N/A                                         | N/A                                         | N/A                                                                                            | N/A            
|(1)                                     | The exercise price of stock options is set at not less than 100% of the market value (as defined in the Companys Incentive Stock Option Plan) of a common share of the Company on the date of grant.  The exercise price of stock options may only be adjusted in the event that specified events cause a change in the Companys share capital.  Options vest immediately upon grant.



There were no repricings of stock options held by Named Executive Officers of the Company during the fiscal year ended October 31, 2007.



Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values



The following table sets forth details of all exercise of stock options during the fiscal year ended October 31, 2007 by the Named Executive Officers and the fiscal year-end value of unexercised options on an aggregated basis:



|               |                                                                                                                                                                                                                 |                                                |                                                                                                                     |                                                                                                                                  | 
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | 
|Name           | Securities Acquired 
        on Exercise
        (#)1                                                                                                                                                           | Aggregate Value 
        Realised
        ($)2 | Unexercised 
        Options at Fiscal 
        Year-End
        (#)3,4
        Exercisable/
        Unexercisable5 | Value of Unexercised In-the-
        Money Options at Fiscal Year-End
        ($)3,4
        Exercisable/
        Unexercisable5
|               |                                                                                                                                                                                                                 |                                                |                                                                                                                     |                                                                                                                                 
|Chet Idziszek  | nil                                                                                                                                                                                                             | nil                                            | 515,400/nil                                                                                                         | $3,200/nil                                                                                                                      
|Ian Brown      | nil                                                                                                                                                                                                             | nil                                            | 100,000/100,000                                                                                                     | nil                                                                                                                             
|Naomi Corrigan | nil                                                                                                                                                                                                             | nil                                            | 59,600/nil                                                                                                          | nil                                                                                                                             
|1              | Number of common shares of the Company acquired on the exercise of stock options.                                                                                                                              
|2              | Calculated using the closing price on the exercise date for a board lot of common shares of the Company on the TSX Venture Exchange.                                                                           
|3              | The figures relate solely to stock options.                                                                                                                                                                    
|4              | The value of in-the-money options was calculated using the closing price of $0.42 for the common shares of the Company on the TSX Venture Exchange on October 31, 2007, less the exercise price of each option.
|5              | All such options are currently exercisable.                                                                                                                                                                    



---

48



Defined Benefit or Actuarial Plan Disclosure  There are no such plans to be disclosed.



Termination of Employment, Change in Responsibilities and Employment Contracts



There are no formal employment agreements between the Company and its Named Executive Officers.



Directors



The Company has no arrangements, standard or otherwise, pursuant to which directors are compensated by the Company or its subsidiaries for their services in their capacity as directors, or for committee participation, or involvement in special assignments during the most recently completed financial year or subsequently up to and including the date of this Annual Report, except that directors are compensated for their actual expenses incurred in the pursuance of their duties as directors and certain directors may be compensated for services rendered as consultants or experts.  In this regard, the Company paid or accrued $29,550 to a company controlled by J.G. Stewart for professional services rendered. Ms. Nell Dragovan received $54,312 in salary.



The following table sets forth stock options granted by the Company during the fiscal year ended October 31, 2007 to directors who are not Named Executive Officers of the Company:



|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                            |                                             |                                                                                                     |                 |  | 
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------------------------------- | --------------------------------------------------------------------------------------------------- | --------------- |  | 
|Name                | Securities Under
        Options Granted
        ($)(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | % of Total Options
        Granted in
        Fiscal Year* | Exercise or Base Price
        ($/Security) | Market Value of
        Securities Underlying
        Options on Date of Grant
        ($/Security) | Expiration Date
|F. Martha Deacon(2) | NIL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                        | N/A                                         | N/A                                                                                                 | N/A            
|Nell Dragovan       | NIL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                        | N/A                                         | N/A                                                                                                 | N/A            
|Robert Sibthorpe    | NIL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                        | N/A                                         | N/A                                                                                                 | N/A            
|J.G. Stewart        | NIL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                        | N/A                                         | N/A                                                                                                 | N/A            
|*                   | Percentage of all options granted during the fiscal year                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(1)                 | The exercise price of stock options is set at not less than 100% of the market value (as defined in the stock option plan referred to below) of a common share of the Company on the date of grant.  The exercise price of stock options may only be adjusted in the event that specified events cause dilution of the Company's share capital and these figures take the consolidation of share capital which occurred subsequent to the end of the most recently completed fiscal year.  Options vest immediately upon grant.
|(2)                 | F. Martha Deacon resigned as Director effective February 6, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                              





The following table sets forth details of all exercises of stock options during the fiscal year ended October 31, 2007 by directors who are not Named Executive Officers of the Company, and the fiscal year-end value of unexercised options on an aggregate basis:



---

49





|                  |                                                                                                                                                                                                                 |                                       |                                                                                                   |                                                                                                                         | 
|----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | 
|Name              | Securities Acquired on Exercise
        (#)1                                                                                                                                                                    | Aggregate Value Realised
        ($)2 | Unexercised Options at Fiscal Year-End
        (#)3,4
        Exercisable/
        Unexercisable5 | Value of Unexercised In-the-Money Options at Fiscal Year-End
        ($)3,4
        Exercisable/
        Unexercisable5
|F. Martha Deacon6 | nil                                                                                                                                                                                                             | nil                                   | 150,000/nil                                                                                       | Nil                                                                                                                    
|Nell Dragovan     | nil                                                                                                                                                                                                             | nil                                   | 210,000/nil                                                                                       | $3,200                                                                                                                 
|Robert Sibthorpe  | nil                                                                                                                                                                                                             | nil                                   | 210,000/nil                                                                                       | $3,200                                                                                                                 
|James G. Stewart  | nil                                                                                                                                                                                                             | nil                                   | 270,000/nil                                                                                       | $3,200                                                                                                                 
|1                 | Number of common shares of the Company acquired on the exercise of stock options.                                                                                                                              
|2                 | Calculated using the closing price on the exercise date for a board lot of common shares of the Company on the TSX Venture Exchange.                                                                           
|3                 | The figures relate solely to stock options.                                                                                                                                                                    
|4                 | The value of in-the-money options was calculated using the closing price of $0.42 for the common shares of the Company on the TSX Venture Exchange on October 31, 2007, less the exercise price of each option.
|5                 | All such options are currently exercisable.                                                                                                                                                                    
|6                 | F. Martha Deacon resigned as a Director effective February 6, 2008.                                                                                                                                            



There were no repricings of stock options held by directors and Named Executive Officers of the Company during the fiscal year ended October 31, 2007.



Securities Authorized For Issuance Under Equity Compensation Plans



The following table sets out, as of the end of the Companys fiscal year ended October 31, 2007, all required information with respect to compensation plans under which equity securities of the Company are authorized for issuance:



|                                                          |                                                                                                         |                                                                                         |                                                                                                                                                        
|--------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|Plan Category                                             | Number Of Securities To Be Issued Upon Exercise Of Outstanding Options, Warrants And Rights
        (a) | Weighted-Average Exercise Price Of Outstanding Options, Warrants And Rights
        (b) | Number Of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a))
        (c)
|Equity compensation plans approved by securityholders     | 3,182,300                                                                                               | $0.97                                                                                   | 361,408                                                                                                                                                
|Equity compensation plans not approved by securityholders | nil                                                                                                     | nil                                                                                     | Nil                                                                                                                                                    
|Total                                                     | 3,182,300                                                                                               | $0.97                                                                                   | 361,408                                                                                                                                                



C.

Board Practices



The directors hold office for a term of one year or until the next annual general meeting of the Company, at which time all directors retire, and are eligible for re-election.  Vivian Danielson has been a director since February 6, 2008.  Nell Dragovan has been a director of the Company since June 5, 2003.  Chet Idziszek has been a director of the Company since November 7, 1993, the Chief Executive Officer of the Company since April 23, 1997 and the Chairman of the Board of Directors of the Company since November 8, 1999 and the President of the Company since August 31, 2001.  J.G. Stewart has been a director of the Company since April 23, 1997 and the Secretary of the Company since July 15, 1996.  Neither the Company nor any of its subsidiaries have any arrangement to provide benefits to directors upon termination of employment.





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50



The Companys Audit Committee is comprised of Vivian Danielson, Nell Dragovan and Robert Sibthorpe.  The Audit Committee is appointed by the Board of Directors and its members hold office until removed by the Board of Directors or until the next annual general meeting of the Company, at which time their appointments expire and they are then eligible for re-appointment.  The Audit Committee reviews the audited financial statements of the Company and liaises with the Companys auditors and recommends to the Board of Directors whether or not to approve such statements.  At the request of the Companys auditors, the Audit Committee must convene a meeting to consider any matters which the auditor believes should be brought to the attention of the Committee, the Board of Directors or the shareholders of the Company.



D.

Employees



During the fiscal year ended October 31, 2007, the Company had seven employees, all of whom worked at the Companys head office. Of the seven employees, three worked in a management role, three in secretarial roles, and one in accounting. Mineral exploration work was carried out by contract staff. During the fiscal year ended October 31, 2006, the Company had eight employees.  Of the eight employees, one worked in a management role (in Canada), three in secretarial roles (in Canada), two in accounting roles (in Canada) and the balance of two worked as geologists or in other aspects of the Companys mineral exploration work (one in Canada and one in Papua New Guinea).  None of the Companys employees were casual or temporary employees.  During the fiscal year ended October 31, 2005, the Company had eight employees.  Of the eight employees, one worked in a management role (in Canada), three in secretarial roles (in Canada), two in accounting roles (in Canada) and two worked as geologists or in other aspects of the Companys mineral exploration work (one in Canada and one in Papua New Guinea).  None of the Companys employees were casual or temporary employees.



E.

Share Ownership



The following table sets forth the share ownership of those persons listed in subsection 6.B above and includes the details of all options or warrants to purchase shares of the Company held by such persons:



|                 |                                                           |                                                                |                                        |                |             |                                   |                                                                | 
|---------------- | --------------------------------------------------------- | -------------------------------------------------------------- | -------------------------------------- | -------------- | ----------- | --------------------------------- | -------------------------------------------------------------- | 
|Name             | Number of Common Shares Held at
        February 15, 2008 | Number of Options or Warrants Outstanding at February 15, 2008 | Beneficial Percentage Ownership1       | Exercise Price | Expiry Date
|Ian Brown        | Nil                                                       |                                                                | 200,000                                |                | 0.6%        | $0.77                             | April 27, 2012                                                 | 
|Vivian Danielson | 15,000                                                    |                                                                |                                        |                | 0.1%        |                                   |                                                                | 
|Nell Dragovan    | 944,218                                                   |                                                                | 80,000
        100,000
        300,117 |                | 4.0%        | $0.38
        $1.10
        $1.20 | May 27, 2010
        October 20,2011
        October 11, 2008  | 
|Chet Idziszek    | 947,928                                                   |                                                                | 80,000
        350,000
        298,823 |                | 4.6%        | $0.38
        $1.10
        $1.20 | May 27, 2010
        October 20, 2011
        October 11, 2008 | 
|Robert Sibthorpe | Nil                                                       |                                                                | 80,000
        100,000                 |                | 0.5%        | $0.38
        $1.10               | May 27, 2010
        October 20, 2011                          | 
|J.G. Stewart     | 153,929                                                   |                                                                | 80,000
        125,000
        25,000  |                | 1.1%        | $0.38
        $1.10
        $1.20 | May 27, 2010
        October 20, 2011
        October 11, 2008 | 
|                 |                                                           |                                                                |                                        |                |             |                                   |                                                                | 
|Total:           | 2,061,075                                                 |                                                                | 1,818,940                              |                | 10.84%      |                                   |                                                                | 



1.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.  In computing the number of shares owned by a person and the percentage ownership of that person, Common Shares subject to options and warrants held by that person that are currently exercisable or exercisable within 60 days of February 15, 2008, are deemed outstanding.  Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.  This table has been prepared based on 35,437,076 Common Shares outstanding as of February 15, 2008.





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51



The Company has a rolling stock option plan (the Plan) that authorizes the board of directors to grant incentive stock options to directors, officers, consultants and employees, whereby a maximum of 10% of the issued common shares are reserved for issuance under the plan.  Under the Plan, the exercise price of each option may not be less than the market price of the Companys shares at the date of grant.  Options granted under the Plan will have a term not to exceed 5 years and be subject to vesting provisions as determined by the board of directors of the Company.  As at the date hereof, stock options entitling the purchase of up to 2,822,616 had been granted to directors, officers and employees of the Company and a further 721,092 shares are reserved for issuance under the Plan.



ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A.

Major Shareholders



There are no persons holding greater than 5% of the Companys common shares at February 15, 2008.



As at February 15, 2008 there were 35,437,076 common shares of the Company issued and outstanding.  Based on the records of the Company's registrar and transfer agent, Pacific Corporate Trust Company, of 3rd Floor, 510 Burrard Street, Vancouver, British Columbia, Canada, as at such date there were 196 record holders of the Company's common shares resident in the United States, holding an aggregate 3,171,974 common shares.  This number represents approximately 8.9% of the total issued and outstanding common shares of the Company as at February 15, 2008.  Based on replies received by the Company from brokers, dealers, banks or nominees to enquiries as to the number of beneficial holders of the Company's common shares resident in the United States, as at February 15, 2008 there were 43 beneficial holders of the Company's common shares resident in the United States, holding an aggregate 195,402 common shares. Adding this number to the 3,171,974 shares recorded in the records of the Companys transfer agent and registrar, as at February 15, 2008 a total of 3,367,376 common shares were held in the United States by a total of 239 record holders, totalling approximately 9.5% of the total issued and outstanding common shares of the Company.



B.

Related Party Transactions



There were no material transactions in the fiscal year ended October 31, 2007, or proposed material transactions between the Company or any of its subsidiaries and:



(a)

enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, the Company;

(b)

associates;

(c)

individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the Company, and close members of any such individuals family;

(d)

key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including directors and senior management of companies and close members of such individuals families;

(e)

enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence including enterprises owned by directors or major shareholders of the Company and enterprises that have a member of key management in common with the Company.



C.

Interests of Experts and Counsel



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.





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52



ITEM 8.

FINANCIAL INFORMATION



A.

Consolidated Statements and Other Financial Information



This Annual Report contains the consolidated financial statements for the Company for the fiscal year ended October 31, 2007 which contain an Audit Report dated February 21, 2007, Balance Sheets as at October 31, 2007 and 2006, Statements of Operations and Deficit for the Fiscal Years Ended October 31, 2007, 2006 and 2005, Statements of Cash Flows for the Fiscal Years Ended October 31, 2007, 2006 and 2005, and Notes to the Financial Statements.



B.

Significant Changes



No significant change has occurred since the date of the annual financial statements included in this Annual Report on Form 20F with the exception of the exercise of the purchase option on the Lewis Property described in Note 16, Subsequent event, in the October 31, 2007 financial statements.



ITEM 9.

THE OFFER AND LISTING



A.

Offer and Listing Details



The high and low sale prices for the common shares of the Company on the TSX Venture Exchange (formerly the Vancouver Stock Exchange) for each of the last six months, each fiscal quarter in each of the last two full financial years and subsequent period and each of the last five full financial years are as follows:



|                            |        |     |        | 
|--------------------------- | ------ | --- | ------ | 
|                            | High   | Low
|Fiscal Year 2007-2008       |        |     |        | 
|January 2008                | $0.365 |     | $0.285 | 
|December                    | $0.355 |     | $0.28  | 
|November                    | $0.415 |     | $0.32  | 
|October                     | $0.445 |     | $0.31  | 
|September                   | $0.42  |     | $0.31  | 
|August                      | $0.435 |     | $0.27  | 
|First Quarter to Jan. 31/08 | $0.415 |     | $0.28  | 
|2007                        | $1.27  |     | $0.27  | 
|Fourth Quarter              | $0.445 |     | $0.27  | 
|Third Quarter               | $0.72  |     | $0.335 | 
|Second Quarter              | $0.85  |     | $0.61  | 
|First Quarter               | $1.27  |     | $0.75  | 
|2006                        | $1.34  |     | $0.23  | 
|Fourth Quarter              | $1.34  |     | $0.295 | 
|Third Quarter               | $0.50  |     | $0.285 | 
|Second Quarter              | $0.67  |     | $0.36  | 
|First Quarter               | $0.70  |     | $0.23  | 
|2005                        | $0.86  |     | $0.24  | 
|2004                        | $0.81  |     | $0.13  | 
|2003                        | $0.29  |     | $0.11  | 



The closing price of the Company's common shares on the TSX Venture Exchange on February 25, 2008 was $0.305.



The high and low sale prices for the common shares of the Company on the Over The Counter Bulletin Board for each of the six months, each fiscal quarter in each of the last two full financial years and subsequent period and each of the last five full financial years are as follows:





---

53





|                            |           |     |           | 
|--------------------------- | --------- | --- | --------- | 
|                            | High      | Low
|Fiscal Year 2007-2008       |           |     |           | 
|January 2008                | US$0.39   |     | US$0.24   | 
|December                    | US$0.42   |     | US$0.25   | 
|November                    | US$0.6261 |     | US$0.28   | 
|October                     | US$0.49   |     | US$0.30   | 
|September                   | US$0.4450 |     | US$0.294  | 
|August                      | US$0.49   |     | US$0.2401 | 
|First Quarter to Jan. 31/08 | US$0.6261 |     | US$0.24   | 
|2007                        | US$1.1225 |     | US$0.2401 | 
|Fourth Quarter              | US$0.49   |     | US$0.2401 | 
|Third Quarter               | US$0.74   |     | US$0.30   | 
|Second Quarter              | US$1.00   |     | US$0.42   | 
|First Quarter               | US$1.1225 |     | US$0.55   | 
|2006                        | US$1.19   |     | US$0.19   | 
|Fourth Quarter              | US$1.19   |     | US$0.25   | 
|Third Quarter               | US$0.46   |     | US$0.2288 | 
|Second Quarter              | US$0.59   |     | US$0.3093 | 
|First Quarter               | US$0.61   |     | US$0.19   | 
|2005                        | US$0.69   |     | US$0.18   | 
|2004                        | US$0.56   |     | US$0.0986 | 
|2003                        | US$0.43   |     | US$0.075  | 



The closing price of the Company's common shares on the Over The Counter Bulletin Board on February 25, 2008 was US$0.30.



B.

Plan of Distribution



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



C.

Markets



The Companys common shares have traded on the TSX Venture Exchange (formerly the Vancouver Stock Exchange) since July 30, 1980 and have traded on the Over The Counter Bulletin Board since February 25, 1997.



D.

Selling Stockholders



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



E.

Dilution



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



F.

Expenses of the Issue



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.





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54



ITEM 10.

ADDITIONAL INFORMATION



A.

Share Capital



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



B.

Memorandum and Articles of Association



The Company was incorporated on August 20, 1979 pursuant to the Company Act (British Columbia) (the Act) and is registered with the Registrar of Companies for British Columbia under incorporation number 195584. On March 29, 2004 the Company Act was replaced by the Business Corporations Act (British Columbia) (the Act), and the Company was transitioned from the Company Act to the Act on October 26, 2004. The Company is not limited in its objects and purposes.



With respect to directors, the Articles of the Company provide that a director who holds any office or possesses any property right or interest that could result, directly or indirectly, in the creation of  a duty or interest that materially conflicts with his duty or interest as a director, must promptly disclose to the directors the nature and extent of his interest.



The Articles also provide that:



(a)

A director who holds a disclosable interest, as provided for in the Act, in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution; and

(b)

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director under or as a result of the contract or transaction, only if and to the extent provided in the Act.

The Act provides that a director holds a disclosable interest in a contract or transaction if it is material to the company, the company has entered or proposes to enter into it and the director has a material interest in the contract or transaction or is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.  However, a director does not have a disclosable interest in a contact or transaction if:



(a)

The contract or transaction is an arrangement by way of security granted by the company for money loaned to, or obligations undertaken by, the director, or a person in whom the director has a material interest, for the benefit of the company or an affiliate of the company;

(b)

The contract or transaction relates to an indemnity or insurance;

(c)

The contract or transaction relates to the remuneration of the director in that person's capacity as director, officer, employee or agent of the company or of an affiliate of the company;

(d)

The contract or transaction relates to a loan to the company, and the director, or a person in whom the director has a material interest, is or is to be a guarantor of some or all of the loan; or

(e)

The contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the company and the director is also a director of that corporation or an affiliate of that corporation.



---

55



The Act provides that a director is not liable to account for and may retain any profit that accrues to the director under or as a result of the contract or transaction in any of the following circumstances:



(a)

the contract or transaction is approved by the directors, with the director having the disclosable interest not being entitled to vote on any resolution to approve the contract or transaction; or

(b)

the contract or transaction is approved by a special resolution of the shareholders.

The Articles of the Company provide that the Company may, if authorized by the directors, borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate, issue bonds, debentures and other debt obligations, either outright or as security for any liability or obligation of the Company, or any other person and at such discounts or premiums and on such other terms as they consider appropriate; guarantee the repayment of money by any other person or the performance of any obligation of any other person; and mortgage, charge, whether by way of specific or floating charge, grant a security interest in or give other security on, the whole or any part of the present and future assets and undertaking of the Company.  Variation of these borrowing powers would require an amendment to the Articles of the Company that would, in turn, require the approval of the shareholders of the Company by way of an ordinary resolution.  An ordinary resolution means a resolution passed by a simple majority of the votes cast by shareholders of the Company voting shares that carry the right to vote at general meetings.



There is no requirement in the Articles of the Company or in the Act requiring retirement or non-retirement of directors under an age limit requirement, nor is there any minimum shareholding required for a directors qualification.



Holders of common shares of the Company are entitled to vote at meetings of shareholders, and a resolution of the directors is required to effect a change in the rights of shareholders.  Holders of common shares are not entitled to pre-emptive rights.  Holders of common shares are entitled, rateably, to the remaining property of the Company upon liquidation, dissolution or winding up of the Company, and such holders receive dividends if, as, and when, declared by the directors of the Company.  There are no restrictions on the purchase or redemption of common shares by the Company and no provisions for sinking funds.  There is no liability on the part of any shareholder to further capital calls by the Company nor any provision discriminating against any existing or prospective holder of securities of the Company as a result of such shareholder owning a substantial number of shares.  There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities imposed by the Act or by the constating documents of the Company.



The Company is required to give its registered shareholders, including registrants and intermediaries who hold shares on behalf of the ultimate beneficial owners, not less than 21 days notice of any general meeting of the Company unless all such shareholders consent to reduce or waive the period.  In addition, the Company is obliged to give notice to registrants and intermediaries no fewer than 30 or more than 60 days prior to the date of the meeting.  The Company then delivers, in bulk, proxy-related materials in amounts specified by the registrants and intermediaries.  No shares of the Company owned by registrants or intermediaries may be voted at a general meeting of the Company unless all proxy-related materials are delivered to the ultimate beneficial owners of such shares.  Such ultimate beneficial owner must then deliver voting instructions to the registrant or intermediary to enable the registrant or intermediary to deliver a proxy to the Company on the beneficial owners behalf within the time limited by the Company for the deposit of proxies in order for the beneficial owners shares to be voted at the meeting.



There is no provision in the Company's constating documents that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries) other than a shareholder rights plan adopted by the Board of Directors of the Company effective March 5, 1998. The plan authorized the issuance of one right in respect of each common share of the Company then outstanding and each common share issued subsequent to March 5, 1998.



---

56



The rights remain attached to and trade with the common shares and are evidenced by a legend endorsed on the share certificates.  The rights are not exercisable until the occurrence of certain designated events.  Upon the acquisition by a person or group of beneficial ownership of 20% or more of the common shares of the Company (other than through a Permitted Bid (as defined in the shareholder rights plan) or through a transaction which has been approved by the Board of Directors), the rights will separate from the common shares, share rights certificates will be issued, the rights will be transferable separately from the common shares, and will be exercisable, entitling the holders to acquire common shares of the Company at an effective 50% discount from the then prevailing market price for the Companys common shares.



A takeover bid made by way of "Permitted Bid" under the rights plan will not trigger the separation and exercise of the rights.  A Permitted Bid is a bid made to all holders of common shares for all shares which are outstanding, and must be made by way of takeover bid circular.  If at the end of 60 days after a takeover bid made by way of a Permitted Bid is announced at least 50% of the outstanding common shares (excluding the bidder's) have been tendered to the bid, the bidder may take up and pay for the shares, and must also extend the bid for an additional 10 days to allow other shareholders to tender their shares.



Unless they are redeemed earlier, the rights will expire ten years from March 5, 1998.



Securities legislation in the Companys home jurisdiction of British Columbia requires that shareholder ownership must be disclosed once a person owns beneficially or has control or direction over greater than 10% of the issued shares of the Company.  This threshold is higher than the 5% threshold under U.S. securities legislation at which shareholders must report their share ownership.



C.

Material Contracts



The Company has not entered into any contracts other than the ordinary course of business during the past two years.



D.

Exchange Controls



There are no governmental laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends or other payments to non-resident holders of the Companys common shares.  Any remittances of dividends to United States residents are, however, subject to a 15% withholding tax (5% if the shareholder is a corporation owning at least 10% of the outstanding common shares of the Company) pursuant to Article X of the reciprocal tax treaty between Canada and the United States.  See Item 10  Additional Information  E.  Taxation below.



Except as provided in the Investment Canada Act (the Act), which has provisions which govern the acquisition of a control block of voting shares by non-Canadians of a corporation carrying on a Canadian business, there are no limitations specific to the rights of non-Canadians to hold or vote the common shares of the Company under the laws of Canada or the Province of British Columbia or in the charter documents of the Company.



Management of the Company considers that the following general summary fairly describes those provisions of the Act pertinent to an investment in the Company by a person who is not a Canadian resident (a non-Canadian).



The Act requires a non-Canadian making an investment which would result in the acquisition of  control of the Canadian business to notify the Investment Review Division of Industry Canada, the federal agency created by the Act; or in the case of an acquisition of a Canadian business, the gross value of the assets of which exceeds certain threshold levels or the business activity of which is related to Canadas cultural heritage of national identity, to file an application for review with the Investment Review Division.



The notification procedure involves a brief statement of information about the investment on a prescribed form that is required to be filed with Investment Canada by the investor at any time up to 30 days following implementation of the investment.



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Once the completed notice has been filed, a receipt bearing the certificate date will be issued to the non-Canadian investor.  The receipt must advise the investor either that the investment proposal is unconditionally non-reviewable or that the proposal will not be reviewed as long as notice of review is not issued within 21 days of the date certified under the receipt.  It is intended that investments requiring only notification will proceed without government intervention unless the investment is in a specific type of business activity related to Canadas cultural heritage and national identity.



If an investment is reviewable under the Act, an order for review must be issued within 21 days after the certified date on which notice of investment was received.  An application for review in the form prescribed is required to be filed with Investment Canada prior to the investment taking place.  Once the application has been filed, a receipt will be issued to the applicant, certifying the date on which the application was received.  For incomplete applications, a deficiency notice will be sent to the applicant, and if not done within 15 days of receipt of application, the application will be deemed to be complete as of the date it was received.  Within 45 days after the complete application has been received, the Minister responsible for the Investment Canada Act must notify the potential investor that the Minister is satisfied that the investment is likely to be of net benefit to Canada.  If within such 45-day period the Minister is unable to complete the review, the Minister has an additional 30 days to complete the review, unless the applicant agrees to a longer period.  Within such additional period, the Minister must advise either that he is satisfied or not satisfied that the investment is likely to be of net benefit to Canada.  If the time limits have elapsed, the Minister will be deemed to be satisfied that the investment is likely to be of net benefit to Canada.  The investment may not be implemented until the review has been completed and the Minister is satisfied that the investment is likely to be of net benefit to Canada.



If the Minister is not satisfied that the investment is likely to be of net benefit to Canada, the non-Canadian must not implement the investment or, if the investment has been implemented, could be penalised by being required to divest himself of control of the business that is the subject of the investment.  To date, the only types of business activities which have been prescribed by regulation as related to Canadas cultural heritage or national identity deal largely with publication, film and music industries.  Because the Companys total assets are less than the $5 million notification threshold, and because the Companys business activities would likely not be deemed related to Canadas cultural heritage or national identity, acquisition of a controlling interest in the Company by a non-Canadian investor would not be subject to even the notification requirements under the Investment Canada Act.



The following investments by non-Canadians are subject to notification under the Act:



1.

an investment to establish a new Canadian business; and



2.

an investment to acquire control of a Canadian business that is not reviewable pursuant to the Act.



The following investments by a non-Canadian are subject to review under the Act:



1.

direct acquisition of control of Canadian businesses with assets of $5 million or more, unless the acquisition is being made by a World Trade Organization (WTO) member country investor (the United States being a member of the WTO);



2.

direct acquisition of control of Canadian businesses with assets of $172,000,000 or more by a WTO investor;



3.

indirect acquisition of control of Canadian business with assets of $5 million or more if such assets represent more than 50% of the total value of the assets of the entities, the control of which is being acquired, unless the acquisition is being made by a WTO investor, in which case there is no review;



4.

indirect acquisition of control of Canadian businesses with assets of $50 million or more even if such assets represent less than 50% of the total value of the assets of the entities, the control of which is being acquired, unless the acquisition is being made by a WTO investor, in which case there is no review; and





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5.

an investment subject to notification that would not otherwise be reviewable if the Canadian business engages in the activity of publication, distribution or sale of books, magazines, periodicals, newspapers, film or video recordings, audio or video music recordings, or music in print or machine-readable form.



Generally speaking, an acquisition is direct if it involves the acquisition of control of the Canadian business or of its Canadian parent or grandparent and an acquisition is indirect if it involves the acquisition of control of a non-Canadian parent or grandparent of an entity carrying on the Canadian business.  Control may be acquired through the acquisition of actual voting control by the acquisition of voting shares of a Canadian corporation or through the acquisition of substantially all of the assets of the Canadian business.  No change of voting control will be deemed to have occurred if less than one-third of the voting control of a Canadian corporation is acquired by an investor.



A WTO investor, as defined in the Act, includes an individual who is a national of a member country of the World Trade Organization or who has the right of permanent residence in relation to that WTO member, a government or government agency of a WTO investor-controlled corporation, limited partnership, trust or joint venture and a corporation, limited partnership, trust or joint venture that is neither WTO-investor controlled or Canadian controlled of which two-thirds of its board of directors, general partners or trustees, as the case may be, or any combination of Canadians and WTO investors.



The higher thresholds for WTO investors do not apply if the Canadian business engages in activities in certain sectors such as uranium, financial services, transportation services or communications.



The Act specifically exempts certain transactions from either notification or review.  Included among this category of transactions is the acquisition of voting shares or other voting interests by any person in the ordinary course of that persons business as a trader or dealer in securities.



E.

Taxation



Material Canadian Federal Income Tax Consequences



Through consultation with counsel, management of the Company believes that the following general summary accurately describes all material Canadian federal income tax consequences applicable to a holder of common shares of the Company who is a resident of the United States and who is not a resident of Canada and who does not use or hold, and is not deemed to use or hold, his common shares of the Company in connection with carrying on a business in Canada (a non-resident holder).



This summary is based upon the current provisions of the Income Tax Act (Canada) (the ITA), the regulations thereunder (the Regulations), the current publicly announced administrative and assessing policies of Revenue Canada, Taxation, and all specific proposals (the Tax Proposals) to amend the ITA and Regulations announced by the Minister of Finance (Canada) prior to the date hereof.  This summary assumes that the Tax Proposals will be enacted in their form as of the date of this Annual Report.  This description, except for the Tax Proposals, does not take into account or anticipate any changes in law, whether by legislative, government or judicial action, nor does it take into account provincial, territorial, or foreign tax considerations which may differ significantly from those discussed herein.



Dividends



Dividends paid on the common shares of the Company to a non-resident holder will be subject to withholding tax.  The Canada-U.S. Income Tax Convention (1980) (the Treaty) provides that the normal 25% withholding tax rate under the ITA is reduced to 15% on dividends paid on shares of a corporation resident in Canada (such as the Company) to beneficial owners of the dividends who are residents of the United States, and also provides for a further reduction of this rate to 5% where the beneficial owner of the dividends is a corporation that is a resident of the United States which owns at least 10% of the voting shares of the corporation paying the dividend.





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Capital Gains



Under the ITA, a taxpayers capital gain or capital loss from a disposition of a share of the Company is the amount, if any, by which his proceeds of disposition exceed (or are exceeded by) the aggregate of his adjusted cost base of the share and reasonable expenses of disposition.  One half of a capital gain (the taxable capital gain) is included in income, and one half of a capital loss in a year (the allowable capital loss) is deductible from taxable capital gains realised in the same year.  The amount by which a shareholders allowable capital loss exceeds his taxable capital gains in a year may be deducted from a taxable capital gain realised by the shareholder in the three previous or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.



A non-resident holder is not subject to tax under the ITA in respect of a capital gain realised upon the disposition of a share of a public corporation unless the share represents taxable Canadian property to the holder thereof.  The Company is a public corporation for purposes of the ITA and a common share of the Company will be taxable Canadian property to a non-resident holder if, at any time during the period of five years immediately following the disposition, the non-resident holder, persons with whom the non-resident holder did not deal at arms length, or the non-resident holder and persons with whom he did not deal at arms length together owned not less than 25% of the issued shares of any class of shares of the Company.



Where a non-resident holder who is an individual ceased to be resident in Canada, and at the time he ceased to be a Canadian resident elected to have his Company shares treated as taxable Canadian property, he will be subject to Canadian tax on any capital gain realised on disposition of the Companys shares, subject to the relieving provisions of the Treaty described below.  Shares of the Company may also be taxable Canadian property to a holder if the holder acquired them pursuant to certain tax-deferred rollover transactions whereby the holder exchanged property that was taxable Canadian property for shares of the Company.



Where the non-resident holder realised a capital gain on a disposition of the Company shares that constitute taxable Canadian property, the Treaty relieves the non-resident shareholder from liability for Canadian tax on such capital gains unless:



(a)

the value of the shares is derived principally from real property in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production from natural resources, which is the case for the Company,



(b)

the non-resident holder is an individual who was resident in Canada for not less than 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him when he ceased to be resident in Canada or are property substituted for property that was owned at that time, or



(c)

the shares formed part of the business property of a permanent establishment or pertained to a fixed base used for the purpose of performing independent personal services that the shareholder has or had in Canada within the 12 months preceding the disposition.



Material United States Federal Income Tax Consequences



The following summary is a general discussion of the material United States Federal income tax considerations to U.S. holders of shares of the Company under current law.  This discussion assumes that U.S. holders hold their shares of the Companys common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the Code).  It does not discuss all the tax consequences that may be relevant to particular holders in light of their circumstances or to holders subject to special rules, such as tax-exempt organisations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign



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corporations whose ownership of shares of the Company is not effectively connected with the conduct of a trade or business in the United States, shareholders who acquired their stock through the exercise of employee stock options or otherwise as compensation, shareholders who hold their stock as ordinary assets and not capital assets and any other non-U.S. holders.  In addition, U.S. holders may be subject to state, local or foreign tax consequences.  No opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is being made by the Company herein.  Holders and prospective holders should therefore consult with their own tax advisors with respect to their particular circumstances.  This discussion covers all material tax consequences.



The following discussion is based upon the sections of the Code, Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time.  This decision does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation that, if enacted, could be applied, possibly on a retroactive basis, at any time.  Accordingly, holders and prospective holders of shares of the Company should consult their own tax advisors about the Federal, state, local, estate, and foreign tax consequences of purchasing, owning and disposing of shares of the Company.



U.S. Holders



As used herein, a U.S. Holder includes a holder of shares of the Company who is a citizen or resident of the United States, a corporation created or organised in or under the laws of the United States or of any political subdivision thereof, any entity that is taxable as a corporation for U.S. tax purposes and any other person or entity whose ownership of shares of the Company is effectively connected with the conduct of a trade or business in the United States.  A U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax exempt organisations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of shares of the Company is not effectively connected with conduct of trade or business in the United States, shareholders who acquired their stock through the exercise of employee stock options or otherwise as compensation and shareholders who hold their stock as ordinary assets and not as capital assets.



Distributions on Common Shares of the Company



U.S. Holders receiving dividend distribution (including constructive dividends) with respect to shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distribution to the extent that the Company has current or accumulated earnings and profits as defined under U.S. Federal tax law, without reduction for any Canadian income tax withheld from such distributions.  Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holders United States Federal income tax liability or, alternatively, may be deducted in computing the U.S. Holders United States Federal taxable income by those who itemise deductions.  (See more detailed discussion at Foreign Tax Credit below).  To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holders adjusted basis in the shares and thereafter as gain from the sale or exchange of the shares.  Preferential tax rates for long-term net capital gains are applicable to a U.S. Holder that is an individual, estate or trust.  There are currently no preferential tax rates for long term capital gains for a U.S. Holder that is a corporation.



Dividends paid on the shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations.  A U.S. Holder that is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a foreign personal holding company or a passive foreign investment company, as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company.  The availability of this deduction is subject to several complex limitations that are beyond the scope of this discussion.





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In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Generally, any gain or loss recognised upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.  However, for tax years after 1997, an individual whose realised foreign exchange gain does not exceed U.S. $200 will not recognise that gain, to the extent that there are not expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense other than travel expenses in connection with a business trip (or as an expense for the production of income).



Foreign Tax Credit



A U.S. Holder who pays (or has withheld from distribution) Canadian income tax with respect to the ownership of shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax.  This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during the year.  There are significant and complex limitations that apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holders United States Federal income tax liability that the U.S. Holders foreign source income bears to this or its worldwide taxable income.  In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources.  Complex rules govern this classification process.  There are further limitations on the foreign tax credit for certain types of income such as passive income, high withholding tax interest, financial services income, shipping income, and certain other classifications of income.  The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and holders and prospective holders of shares of the Company should consult their own tax advisors regarding their individual circumstances.



Information Reporting and Backup Withholding



U.S information reporting requirements may apply with respect to the payment of dividends to U.S. Holders of the Companys common shares.  Under Treasury regulations currently in effect, non-corporate holders may be subject to backup withholding at a 31% rate with respect to dividends when such holder (1) fails to finish or certify a correct taxpayer identification number to the payor in the required manner, (2) is notified by the IRS that it has failed to report payments of interest or dividends properly or (3) fails, under certain circumstances, to certify that it has been notified by the IRS that it is subject to backup withholding for failure to report interest and dividend payments.  Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder generally will be allowed as a credit against the U.S. Holders U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is furnished to the IRS.  Certain U.S. Holders, including corporations, are not subject to backup withholding.



Disposition of Common Shares of the Company



A U.S. Holder will recognise a gain or loss upon the sale of shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in the shares of the Company.  This gain or loss will be a capital gain or loss if the shares are a capital asset in the hands of the U.S. Holder, and will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder.  Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year.  Deductions for net capital loss are subject to significant limitations.  Corporate capital losses (other than losses of corporations electing under Subchapter S of the Code) are deductible to the extent of capital gains.  Non-corporate taxpayers may deduct net capital losses, whether short-term or long-germ, up to U.S. $3,000 a year (U.S. $1,500 in the case of a married individual filing separately).  For U.S. Holders which are individuals, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted.



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For U.S. Holders which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.



Currency Exchange Gains or Losses



U.S. holders generally are required to calculate their taxable incomes in United States dollars.  Accordingly, a U.S. holder who purchases common shares of the Company with Canadian dollars will be required to determine the tax basis of such shares in United States dollars based on the exchange rate prevailing on the settlement date of the purchase (and may be required to recognise the unrealised gain or loss, if any, in the Canadian currency surrendered in the purchase transaction).  Similarly, a U.S. holder receiving dividends or sales proceeds from common shares of the Company in Canadian dollars will be required to compute the dividend income or the amount realised on the sale, as the case may be, in United States dollars based on the exchange rate prevailing at the time of receipt in the case of dividends and on the settlement date in the case of sales on an established securities exchange.  Gain or loss, if any, recognised on a disposition of Canadian currency in connection with the described transactions generally will be treated as ordinary gain or loss.



Other Considerations



In the following circumstances, the above sections of this discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Company (the Company does not believe that it will qualify in the next year, or has qualified within the past three fiscal years, as a foreign personal holding company, foreign investment company, passive foreign investment company or controlled foreign corporation as discussed below):



Foreign Personal Holding Company



If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Companys outstanding shares is owned, directly or indirectly, by five or fewer individuals who are citizens of the United States and 60% or more of the Companys gross income for such year was derived from certain passive sources (e.g., from dividends received from its subsidiaries), the Company would be treated as a foreign personal holding company.  In that event, U.S. Holders that hold common shares of the Company (on the earlier of the last day of the Companys tax year or the last date in which the Company was a foreign personal holding company) would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income.



Foreign Investment Company



If 50% or more of the combined voting power or total value of the Companys outstanding shares are held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company might be treated as a foreign investment company as defined in Section 1246 of the Code, causing all or part of any gain realised by a U.S. Holder selling or exchanging common shares of the Company to be treated as ordinary income rather than capital gains.



Passive Foreign Investment Company



As a foreign corporation with U.S. Holders, the Company could potentially be treated as a passive foreign investment company (PFIC), as defined in Section 1297 of the Code, depending upon the percentage of the Companys income which is passive, or the percentage of the Companys assets which are producing passive income (generally 75% or more of its gross income in a taxable year is passive income, or the average percentage of the Companys assets (by value) during the taxable year which produce passive income or which are held for production of same is at least 50%).



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Passive income is generally defined to include gross income in the nature of dividends, interest, royalties, rents and annuities; excess of gains over losses from certain transactions in any commodities not arising inter aliafrom a PFIC whose business is actively involved in such commodities; certain foreign currency gains; and other similar types of income.  U.S. Holders owning shares of a PFIC are subject to an additional tax and to an interest charge based on the value of deferral of tax for the period during which the common shares of the PFIC are owned, in addition to treatment of gain realised on the disposition of common shares of the PFIC as ordinary income rather than capital gain.  However, if the U.S. Holder makes a timely election to treat a PFIC as a qualified electing fund (QEF) with respect to such shareholders interest therein, the above-described rules generally will not apply.  Instead, the electing U.S. Holder would include annually in his gross income his pro rata share of the PFICs ordinary earnings and net capital gain regardless of whether such income or gain was actually distributed.  A U.S. Holder of a QEF can, however, elect to defer the payment of United States Federal income tax on such income inclusions.  Special rules apply to U.S. Holders who own their interests in a PFIC through intermediate entities or person.



Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders who hold, actually or constructively, marketable stock of a foreign corporation that qualifies as a PFIC may elect to mark such stock to the market (a mark-to-market election).  If such an election is made, such U.S. Holder will not be subject to the special taxation rules of PFIC described above for the taxable year for which the mark-to-market election is made.  A U.S. Holder who makes such an election will include in income for the taxable year an amount equal to the excess, if any, of the fair market value of the shares of the Company as of the close of such tax year over such U.S. Holders adjusted basis in such shares.  In addition, the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holders adjusted tax basis in the shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any of (A) the mark-to-market gains for the shares in the Company included by such U.S. Holder for prior tax years, including any amount which would have been included for any prior year but for Section 1291 interest on tax deferral rules discussed above with respect to a U.S. Holder, who has not made a timely QEF election during the year in which he holds (or is deemed to have held) shares in the Company and the Company is a PFIC (Non-Electing U.S. Holder), over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years.  A U.S. Holders adjusted tax basis in the shares of the Company will be increased or decreased to reflect the amount included or deducted as a result of mark-to-market election.  A mark-to-market election will apply to the tax year for which the election is made and to all later tax years, unless the PFIC stock ceases to be marketable or the IRS consents to the revocation of the election.



The IRS has issued proposed regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by a Non-Electing U.S. Holder that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganisations, and transfers at death.  Generally, in such cases, the basis of the Companys shares in the hands of the transferee and the basis of any property received in the exchange for those shares would be increased by the amount of gain recognised.  A U.S. Holder who has made a timely QEF election (as discussed below) will not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganisation, and transfers at death.  The transferees basis in this case will depend on the manner of transfer.  The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the shares of the Company are transferred.  Each U.S. Holder should consult a tax advisor with respect to how the PFIC rules affect their tax situation.



The PFIC and QEF election rules are complex.  U.S. Holders should consult a tax advisor regarding the availability and procedure for making the QEF election as well as the applicable method for recognizing gains or earnings and profits under the foregoing rules.



Controlled Foreign Corporation



If more than 50% of the voting power of all classes of stock or total value of the stock of the Company is owned, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom owns 10% or more of the total combined voting power of all classes of stock of the Company (United States shareholder), the Company could be treated as a controlled foreign corporation under Subpart F of the Code.



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This classification would effect many complex results including the required inclusion by such United States shareholders in income of their pro rata shares of Subpart F income (as specifically defined by the Code) of the Company.  Subpart F requires current inclusions in the income of United States shareholders to the extent of a controlled foreign corporations accumulated earnings invested in excess passive assets (as defined by the Code).  In addition, under Section 1248 of the Code, gain from sale or exchange of stock by a holder of common shares of the Company who is or was a United States shareholder at any time during the five year period ending with the sale or exchange is treated as ordinary dividend income to the extent of earnings and profits of the Company attributable to the stock sold or exchanged.  Because of the complexity of Subpart F, and because it is not clear that Subpart F would apply to the holders of common shares of the Company, a more detailed review of these rules is outside the scope of this discussion.



If the Company is both a PFIC and controlled foreign corporation, the Company will generally not be treated as a PFIC with respect to United States shareholders of the controlled foreign corporation.  This rule generally will be effective for taxable years of the Company ending with or within such taxable years of United States shareholders.



The foregoing summary is based upon the sections of the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time.  This discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation that, if enacted, could be applied, possibly on a retroactive basis, at any time.  Accordingly, holders and prospective holders of shares of the Company should consult their own tax advisors about the Federal, state, local, estate, and foreign tax consequences of purchasing, owning and disposing of shares of the Company.



F.

Dividends and Paying Agents



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



G.

Statements by Experts



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



H.

Documents on Display



Any documents referred to in this Annual Report may be inspected at the head office of the Company, Suite 2000, 1055 West Hastings Street, Vancouver, British Columbia, V6E 2E9, during normal business hours.



I.

Subsidiary Information



There is no information relating to the Companys subsidiaries which must be provided in Canada and which is not otherwise called for by the body of generally accepted accounting principles used in preparing the financial statements.



ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK



The Company anticipates its primary market risks arise from (1) foreign currency exchange rate risk arising from potential fluctuations in exchange rates and (2) equity price risk arising from fluctuations in the quoted trading price of its material holding of shares in Buffalo Gold Ltd.





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Exchange rate risk may arise if the Company is required to use different currencies for various aspects of its operations. At present, the functional currency for the Company is the Canadian dollar. Based on the Companys overall exchange rate risk as at October 31, 2007, the Company believes that a ten percent change in exchange rates would not have a material adverse effect on its financial position, results of operations, or changes in financial position. The Company intends to monitor its exchange rate risk and take reasonable steps to reduce its exposure. The Company does not intend to purchase or sell derivative instruments for speculative purposes.



The Company is subject to equity price risk in respect of its material holding of shares in Buffalo Gold Ltd., securities which are categorized, for Canadian accounting purposes, as available for sale. Changes in the quoted market value of these shares are booked through other comprehensive income or loss, and do not affect net income or loss directly. Changes do, however, have the potential to materially affect current assets. During the period from the date of acquisition, June 28, 2007 to the end of the fiscal year, October 31, 2007 the quoted market price of Buffalo shares ranged from a high of $1.15 to a low of $0.63, and from the beginning of the new fiscal year, November 1, 2007 to February 28, 2008 from a high of $0.97 to a low of $0.38.



PART II



ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.



ITEM 13.

DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES



There has not been a material default in the payment of principal, interest, a sinking or purchase fund instalment, or any other material default not cured within thirty days, relating to indebtedness of the Company or any of its significant subsidiaries.  There are no payments of dividends by the Company in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.



ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



Effective March 5, 1998 the Board of Directors of the Company adopted a shareholder rights plan and authorized the issuance of one right in respect of each common share of the Company then outstanding and each common share issued subsequent to March 5, 1998.  The rights remain attached to and trade with the common shares and are evidenced by a legend endorsed on the share certificates.  The rights are not exercisable until the occurrence of certain designated events.  Upon the acquisition by a person or group of beneficial ownership of 20% or more of the common shares of the Company (other than through a Permitted Bid (as defined in the shareholder rights plan) or through a transaction which has been approved by the Board of Directors), the rights will separate from the common shares, share rights certificates will be issued, the rights will be transferable separately from the common shares, and will be exercisable, entitling the holders to acquire common shares of the Company at an effective 50% discount from the then prevailing market price for the Companys common shares.



A takeover bid made by way of "Permitted Bid" under the rights plan will not trigger the separation and exercise of the rights.  A Permitted Bid is a bid made to all holders of common shares for all shares that are outstanding, and must be made by way of takeover bid circular.  If at the end of 60 days after a takeover bid made by way of a Permitted Bid is announced at least 50% of the outstanding common shares (excluding the bidder's) have been tendered to the bid, the bidder may take up and pay for the shares, and must also extend the bid for an additional 10 days to allow other shareholders to tender their shares.



The rights plan was approved by the shareholders of the Company at the annual general meeting of the Company held on April 28, 1998.  Unless they are redeemed earlier, the rights will expire ten years from March 5, 1998. As of February 25, 2008 the Company has set in motion a plan to replace this rights plan, before its expiry date, with a similar plan.





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66



ITEM 15.

CONTROLS AND PROCEDURES



Disclosure Controls and Procedures



Based on their evaluation as of the end of the period covered by this Annual Report on Form 20-F, the Companys principal executive officer and principal financial officer have concluded that the Companys disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange of 1934 (the Exchange)) are effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarised and reported within the time period specified in Securities and Exchange Commission rules and forms.  There were no changes in the Companys internal controls or in other factors that could significantly affect these controls during the period covered by this Annual Report on Form 20F, including any corrective actions with regard to significant deficiencies and material weaknesses.



Internal Control over Financial Reporting (ICFR)



Management of the Company is responsible for establishing and maintaining adequate control over the Companys financial reporting. Management of the Company evaluate the effectiveness of the issuers ICFR, using the framework developed by the Council of Sponsoring Organizations (COSO) in the version applicable to small enterprises.



Management has concluded that the Companys ICFR as at October 31, 2007 is effective. This annual report does not contain an attestation report of the Companys registered public accounting firm regarding ICFR. Our report herein was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report.



There were no changes in our ICFR during the period covered by this annual report that has materially affected, or is reasonably likely materially affect, our ICFR.



ITEM 16.

[RESERVED]





ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT



The Company has determined that Robert Sibthorpe qualifies as an audit committee financial expert as defined by the rules of the SEC.  Mr. Sibthorpe holds a B.Sc. in geology and an M.B.A. from the University of Toronto.  He has worked as a mining analyst and director of Yorkton Securities Inc. from 1986 to 1996.  He was an independent mining consultant from 1996 to 1999 when he joined Canaccord Capital Corporation as a mining analyst from 1999 to 2001.  Since 2001 he has worked as an independent mining consultant.



ITEM 16B.

CODE OF ETHICS



The Company has adopted a Code of Ethics applicable to its directors, principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions.  A copy of the Companys Code of Ethics is available at the Companys website at www.madisonminerals.com.



ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES



In respect of work undertaken for the fiscal year ended October 31, 2007, the Company paid the following amounts of fees to Davidson & Company, the Companys principal accountants, for the following categories of services:





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67





|                   |             |                       
|------------------ | ----------- | ----------------------
|Type of Fees       | Amount Paid | Percentage of Services
|Audit fees         | $33,500     | 85%                   
|Audit-related fees | -           | -                     
|Tax fees           | $6,000      | 15%                   
|All other fees     | -           | -                     
|Total fees         | $39,500     | 100%                  



In respect of work undertaken for the fiscal year ended October 31, 2006, the Company paid the following amounts of fees to Davidson & Company, the Companys principal accountants, for the following categories of services:



|                   |             |                       
|------------------ | ----------- | ----------------------
|Type of Fees       | Amount Paid | Percentage of Services
|Audit fees         | $30,000     | 88%                   
|Audit-related fees | -           | -                     
|Tax fees           | $4,000      | 12%                   
|All other fees     | -           | -                     
|Total fees         | $34,000     | 100%                  





For the purposes of this Item 16C, the following terms have the following meanings:

|                   |   |                                                                                                                                                                                                                                    
|------------------ | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Audit fees         | - | Fees billed for the audit of the Companys annual financial statements and for services normally provided by the accountant in connection with statutory and regulatory filings in each fiscal year reported on.                   
|Audit-related fees | - | Fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Companys financial statements in each fiscal year reported on and that are not reported as audit fees.
|Tax fees           | - | Fees billed for tax compliance, tax advice, and tax planning services in each fiscal year reported on.                                                                                                                             
|All other fees     | - | Fees billed for products and services provided by the principal accountant other than services reported under the three categories above in each fiscal year reported on.                                                          



As required by Rule 2-01(c)(7)(i) of Regulation S-X, before the accountant was engaged by the Company to render audit or non-audit services, the Companys audit committee approved the engagement.



ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES



The information referred to in this Item is not required for the fiscal year ended October 31, 2006, which is the period covered by this Annual Report on Form 20F.



ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS



The information referred to in this Item is not required for the fiscal year ended October 31, 2006, which is the period covered by this Annual Report on Form 20F.



PART III



ITEM 17.

FINANCIAL STATEMENTS



See the Financial Statements and Exhibits listed in Item 19 hereof and filed as part of this Annual Report.





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68



These financial statements were prepared in accordance with Canadian GAAP and are expressed in Canadian dollars.  Such financial statements have been reconciled to U.S. GAAP (see Note 17 therein).  For a history of exchange rates in effect for Canadian dollars as against U.S. dollars, see page 12 of this Annual Report.



ITEM 18.

FINANCIAL STATEMENTS



Not applicable



ITEM 19.

EXHIBITS



(a)

Financial Statements



|                                                                                                                     |         
|-------------------------------------------------------------------------------------------------------------------- | --------
|Description of Document                                                                                              | Page No.
|Cover Sheet                                                                                                          | F-1     
|Auditors Report dated February 21, 2008                                                                             | F-2     
|Consolidated Balance Sheets as at October 31, 2007 and 2006                                                          | F-3     
|Consolidated Statements of Operations and Deficit for the Fiscal Years Ended
        October 31, 2007, 2006 and 2005 | F-4     
|Consolidated Statements of Cash Flows for the Fiscal Years Ended
        October 31, 2007, 2006 and 2005             | F-6     
|Notes to the Consolidated Financial Statements                                                                       | F-7     



(b)

Exhibits





|               |                                                                                                                                                         |         
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|Exhibit Number | Description of Document                                                                                                                                 | Page No.
|*1.A.          | Certificate of British Columbia Registrar of Companies as to the incorporation of Collingwood Energy Inc. dated August 20, 1979                         |         
|*1.B.          | Certificate of British Columbia Registrar of Companies as to the change of name to Collins Resources Ltd., dated July 17, 1984                          |         
|*1.C.          | Certificate of British Columbia Registrar of Companies at to the change of name to Madison Enterprises Corp., dated June 25, 1992                       |         
|*1.D.          | Articles of the Company                                                                                                                                 |         
|*2.A.          | Shareholder Rights Plan Agreement dated March 5, 1998 between the Company and Pacific Corporate Trust Company                                           |         
|*3.A.          | Voting trust agreement dated September 30, 1999 between the Company and Carpenter Pacific Resources NL                                                  |         
|*3.B.          | Voting trust agreement dated February 21, 2000 between the Company and Jipangu Inc.                                                                     |         
|*4.A.          | Option Agreement dated August 10, 1993, as amended, between Adrian Resources, S.A., the Company and Madison Enterprises (Latin America), S.A.           |         
|*4.B.          | Agreement dated June 26, 1996 between Nell Dragovan (subsequently assigned to the Company), Carpenter Pacific Resources NL and Matu Mining Pty. Limited |         
|*4.C.          | Independent State of Papua New Guinea Extension of Exploration Licence 1093                                                                             |         



---

69





|      |                                                                                                                                                                                                                                                           |       
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|*4.D. | Volumes 1 and 2 of the Mt. Kare Settlement Agreement between Ramsgate Resources NL, Oakland Pty Limited, Matu Mining Pty. Limited and Carpenter Pacific Resources NL                                                                                      |       
|*4.E. | Joint Venture Agreement dated March 10, 1998 among the Company, Madison Enterprises (PNG) Pty Limited, Matu Mining Pty Ltd., Ramsgate Resources NL, Carpenter Pacific Resources NL, Oakland Pty Limited and Kare-Puga Development Corporation Pty Limited |       
|*4.F. | Letter agreement dated January 18, 1999 between Adrian Resources, S.A. and the Company                                                                                                                                                                    |       
|*4.G. | Sale Agreement dated September 30, 1999 between the Company, Madison Enterprises (PNG) Ltd. and Carpenter Pacific Resources NL                                                                                                                            |       
|*4.H. | Exploration and Option to Purchase Agreement dated June 1, 2002 between the Company, F.W. Lewis, Inc. and Great American Minerals Exploration LLC                                                                                                         |       
|*4.I. | Joint Venture Letter Agreement dated May 23, 2002 between the Company and Great American Minerals Exploration LLC                                                                                                                                         |       
|*4.J  | Option Agreement dated October 17, 2005 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                                      |       
|*4.K  | Supplementary Agreement dated October 17, 2005 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                               |       
|*4.L  | Joint Venture Agreement dated March 29, 2006 between the Company and Great American Minerals, Inc.                                                                                                                                                        |       
|*4.M  | Amending Agreement dated June 22, 2006 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                                       |       
|4.N   | Amended and Restated Option Agreement dated June 25, 2007 between the Company, Longview Capital Partners Limited, Buffalo Gold Ltd., Buffalo Gold (PNG) Ltd., Madison Enterprises (BVI) Inc. and Madison Enterprises (PNG) Limited                        | E-440 
|99.1  | Certification of Chief Executive Officer pursuant to 18 U.S.C. 99.1 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                    | E-99.1
|99.2  | Certification of Chief Financial Officer pursuant to 18 U.S.C. 99.2 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                    | E-99.2
|*     | These exhibits were previously filed with the Companys Registration Statement or a previous Annual Report on Form 20-F (file no. 0-29250).                                                                                                               |       



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70



SIGNATURES



The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this Annual Report on its behalf.







Dated at Vancouver, British Columbia, this 29th day of February, 2008





MADISON MINERALS INC.





Chet Idziszek





Per:  (signed) Chet Idziszek

Title:  President











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71



CERTIFICATIONS



I, Chet Idziszek, certify that:



1.

I have reviewed this annual report on Form 20-F of Madison Minerals Inc. (the Company);



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;



4.

The Companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c)

evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and



5.

The Companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent function):



a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarise and report financial information; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting.



Date:  February 29, 2008



Signed Chet Idziszek

____________________________

Chet Idziszek, President





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72



I, Ian Brown, certify that:



1.

I have reviewed this annual report on Form 20-F of Madison Minerals Inc. (the Company);



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;



4.

The Companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c)

evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and



5.

The Companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent function):



a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarise and report financial information; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting.



Date:  February 29, 2008



Signed Ian Brown

_____________________________________

Ian Brown, Chief Financial Officer



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73



EXHIBIT INDEX





|               |                                                                                                                                                                                                                                                           |         
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|Exhibit Number | Description of Document                                                                                                                                                                                                                                   | Page No.
|*1.A.          | Certificate of British Columbia Registrar of Companies as to the incorporation of Collingwood Energy Inc. dated August 20, 1979                                                                                                                           |         
|*1.B.          | Certificate of British Columbia Registrar of Companies as to the change of name to Collins Resources Ltd., dated July 17, 1984                                                                                                                            |         
|*1.C.          | Certificate of British Columbia Registrar of Companies at to the change of name to Madison Enterprises Corp., dated June 25, 1992                                                                                                                         |         
|*1.D.          | Articles of the Company                                                                                                                                                                                                                                   |         
|*2.A.          | Shareholder Rights Plan Agreement dated March 5, 1998 between the Company and Pacific Corporate Trust Company                                                                                                                                             |         
|*3.A.          | Voting trust agreement dated September 30, 1999 between the Company and Carpenter Pacific Resources NL                                                                                                                                                    |         
|*3.B.          | Voting trust agreement dated February 21, 2000 between the Company and Jipangu Inc.                                                                                                                                                                       |         
|*4.A.          | Option Agreement dated August 10, 1993, as amended, between Adrian Resources, S.A., the Company and Madison Enterprises (Latin America), S.A.                                                                                                             |         
|*4.B.          | Agreement dated June 26, 1996 between Nell Dragovan (subsequently assigned to the Company), Carpenter Pacific Resources NL and Matu Mining Pty. Limited                                                                                                   |         
|*4.C.          | Independent State of Papua New Guinea Extension of Exploration Licence 1093                                                                                                                                                                               |         
|*4.D.          | Volumes 1 and 2 of the Mt. Kare Settlement Agreement between Ramsgate Resources NL, Oakland Pty Limited, Matu Mining Pty. Limited and Carpenter Pacific Resources NL                                                                                      |         
|*4.E.          | Joint Venture Agreement dated March 10, 1998 among the Company, Madison Enterprises (PNG) Pty Limited, Matu Mining Pty Ltd., Ramsgate Resources NL, Carpenter Pacific Resources NL, Oakland Pty Limited and Kare-Puga Development Corporation Pty Limited |         
|*4.F.          | Letter agreement dated January 18, 1999 between Adrian Resources, S.A. and the Company                                                                                                                                                                    |         
|*4.G.          | Sale Agreement dated September 30, 1999 between the Company, Madison Enterprises (PNG) Ltd. and Carpenter Pacific Resources NL                                                                                                                            |         
|*4.H.          | Exploration and Option to Purchase Agreement dated June 1, 2002 between the Company, F.W. Lewis, Inc. and Great American Minerals Exploration LLC                                                                                                         |         
|*4.I.          | Joint Venture Letter Agreement dated May 23, 2002 between the Company and Great American Minerals Exploration LLC                                                                                                                                         |         
|*4.J           | Option Agreement dated October 17, 2005 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                                      |         
|*4.K           | Supplementary Agreement dated October 17, 2005 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                               |         
|*4.L           | Joint Venture Agreement dated March 29, 2006 between the Company and Great American Minerals, Inc.                                                                                                                                                        |         



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74





|     |                                                                                                                                                                                                                                    |       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|*4.M | Amending Agreement dated June 22, 2006 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                |       
|4.N  | Amended and Restated Option Agreement dated June 25, 2007 between the Company, Longview Capital Partners Limited, Buffalo Gold Ltd., Buffalo Gold (PNG) Ltd., Madison Enterprises (BVI) Inc. and Madison Enterprises (PNG) Limited | E-440 
|99.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. 99.1 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                             | E-99.1
|99.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. 99.2 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                             | E-99.2
|*    | These exhibits were previously filed with the Companys Registration Statement or a previous Annual Report on Form 20-F (file no. 0-29250).                                                                                        |       





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70





SIGNATURES



The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this Annual Report on its behalf.







Dated at Vancouver, British Columbia, this 29th day of February, 2008





MADISON MINERALS INC.





Chet Idziszek





Per:  (signed) Chet Idziszek

Title:  President

















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71





CERTIFICATIONS



I, Chet Idziszek, certify that:



1.

I have reviewed this annual report on Form 20-F of Madison Minerals Inc. (the Company);



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;



4.

The Companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c)

evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and



5.

The Companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent function):



a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarise and report financial information; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting.



Date:  February 29, 2008



Signed Chet Idziszek

____________________________

Chet Idziszek, President











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72





I, Ian Brown, certify that:



1.

I have reviewed this annual report on Form 20-F of Madison Minerals Inc. (the Company);



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;



4.

The Companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c)

evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and



5.

The Companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent function):



a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarise and report financial information; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting.



Date:  February 29, 2008



Signed Ian Brown

_____________________________________

Ian Brown, Chief Financial Officer









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73





EXHIBIT INDEX





|               |                                                                                                                                                                                                                                                           |         
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|Exhibit Number | Description of Document                                                                                                                                                                                                                                   | Page No.
|*1.A.          | Certificate of British Columbia Registrar of Companies as to the incorporation of Collingwood Energy Inc. dated August 20, 1979                                                                                                                           |         
|*1.B.          | Certificate of British Columbia Registrar of Companies as to the change of name to Collins Resources Ltd., dated July 17, 1984                                                                                                                            |         
|*1.C.          | Certificate of British Columbia Registrar of Companies at to the change of name to Madison Enterprises Corp., dated June 25, 1992                                                                                                                         |         
|*1.D.          | Articles of the Company                                                                                                                                                                                                                                   |         
|*2.A.          | Shareholder Rights Plan Agreement dated March 5, 1998 between the Company and Pacific Corporate Trust Company                                                                                                                                             |         
|*3.A.          | Voting trust agreement dated September 30, 1999 between the Company and Carpenter Pacific Resources NL                                                                                                                                                    |         
|*3.B.          | Voting trust agreement dated February 21, 2000 between the Company and Jipangu Inc.                                                                                                                                                                       |         
|*4.A.          | Option Agreement dated August 10, 1993, as amended, between Adrian Resources, S.A., the Company and Madison Enterprises (Latin America), S.A.                                                                                                             |         
|*4.B.          | Agreement dated June 26, 1996 between Nell Dragovan (subsequently assigned to the Company), Carpenter Pacific Resources NL and Matu Mining Pty. Limited                                                                                                   |         
|*4.C.          | Independent State of Papua New Guinea Extension of Exploration Licence 1093                                                                                                                                                                               |         
|*4.D.          | Volumes 1 and 2 of the Mt. Kare Settlement Agreement between Ramsgate Resources NL, Oakland Pty Limited, Matu Mining Pty. Limited and Carpenter Pacific Resources NL                                                                                      |         
|*4.E.          | Joint Venture Agreement dated March 10, 1998 among the Company, Madison Enterprises (PNG) Pty Limited, Matu Mining Pty Ltd., Ramsgate Resources NL, Carpenter Pacific Resources NL, Oakland Pty Limited and Kare-Puga Development Corporation Pty Limited |         
|*4.F.          | Letter agreement dated January 18, 1999 between Adrian Resources, S.A. and the Company                                                                                                                                                                    |         
|*4.G.          | Sale Agreement dated September 30, 1999 between the Company, Madison Enterprises (PNG) Ltd. and Carpenter Pacific Resources NL                                                                                                                            |         
|*4.H.          | Exploration and Option to Purchase Agreement dated June 1, 2002 between the Company, F.W. Lewis, Inc. and Great American Minerals Exploration LLC                                                                                                         |         
|*4.I.          | Joint Venture Letter Agreement dated May 23, 2002 between the Company and Great American Minerals Exploration LLC                                                                                                                                         |         
|*4.J           | Option Agreement dated October 17, 2005 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                                      |         
|*4.K           | Supplementary Agreement dated October 17, 2005 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                               |         
|*4.L           | Joint Venture Agreement dated March 29, 2006 between the Company and Great American Minerals, Inc.                                                                                                                                                        |         









---

74







|     |                                                                                                                                                                                                                                    |       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|*4.M | Amending Agreement dated June 22, 2006 between the Company, Madison Enterprises (BVI) Inc., Madison Enterprises (PNG) Limited and Longview Capital Partners Limited                                                                |       
|4.N  | Amended and Restated Option Agreement dated June 25, 2007 between the Company, Longview Capital Partners Limited, Buffalo Gold Ltd., Buffalo Gold (PNG) Ltd., Madison Enterprises (BVI) Inc. and Madison Enterprises (PNG) Limited | E-440 
|99.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. 99.1 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                             | E-99.1
|99.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. 99.2 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                             | E-99.2
|*    | These exhibits were previously filed with the Companys Registration Statement or a previous Annual Report on Form 20-F (file no. 0-29250).                                                                                        |       











---







MADISON MINERALS INC.(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2007



F-1



---

|DAVIDSON & COMPANY LLP |  | Chartered Accountants | A Partnership of Incorporated Professionals
|---------------------- |  | --------------------- | -------------------------------------------
|                       |  |                       |                                            

INDEPENDENT AUDITORS' REPORT

To the Shareholders of 
  Madison Minerals Inc.

We have audited the consolidated balance sheets of Madison Minerals Inc. as at October 31, 2007 and 2006 and the consolidated statements of operations, deficit and accumulated other comprehensive income (loss) and cash flows for the years ended October 31, 2007, 2006 and 2005. 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 Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (United States). 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 supporting 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 October 31, 2007 and 2006 and the results of its operations and its cash flows for the years ended October 31, 2007, 2006 and 2005 in accordance with Canadian generally accepted accounting principles.

"DAVIDSON & COMPANY LLP"

Chartered Accountants

Vancouver, Canada

February 21, 2008

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when there are changes in accounting principles that have a material effect on the comparability of the Companys financial statements, such as the changes described in Note 3 to the consolidated financial statements. Our report to shareholders dated February 21, 2008 is expressed in accordance with Canadian reporting standards which do not require a reference to such changes in accounting principles in the auditors report when the changes are properly accounted for and adequately disclosed in the financial statements.

"DAVIDSON & COMPANY LLP"

Chartered Accountants

Vancouver, Canada

February 21, 2008

F-2



1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6 
  Telephone (604) 687-0947 Fax (604) 687-6172

---

|MADISON MINERALS INC.          
|-------------------------------
|(An Exploration Stage Company) 
|CONSOLIDATED BALANCE SHEETS    
|(Expressed in Canadian dollars)
|AS AT OCTOBER 31               

|                                                      |   |            | 2007        |   |            | 2006        |  
|----------------------------------------------------- | - | ---------- | ----------- | - | ---------- | ----------- | -
|                                                     
|                                                     
|                                                     
|ASSETS                                                |   |            |             |   |            |             |  
|                                                     
|Current                                               |   |            |             |   |            |             |  
|Cash and cash equivalents                             | $ | 5,511,333  |             | $ | 6,953,033  |            
|Marketable securities (Note 4)                        |   | 2,962,890  |             |   | 28,900     |            
|Receivables (Note 10(b))                              |   | 61,078     |             |   | 36,846     |            
|Prepaid expenses and deposits                         |   | 3,857      |             |   | 3,857      |            
|                                                     
|                                                      |   |            | 8,539,158   |   |            | 7,022,636   |  
|Mineral properties(Note 5)                            |   | 4,456,861  |             |   | 2,899,289  |            
|Advances to contractors                               |   | 35,443     |             |   | -          |            
|Equipment(Note 6)                                     |   |            | 19,779      |   |            | 24,715      |  
|                                                     
|                                                      |   | $          | 13,051,241  |   | $          | 9,946,640   |  
|                                                     
|                                                     
|                                                     
|                                                     
|LIABILITIES AND SHAREHOLDERS' EQUITY                  |   |            |             |   |            |            
|                                                     
|Current                                               |   |            |             |   |            |             |  
|Accounts payable and accrued liabilities (Note 10(b)) | $ | 176,901    |             | $ | 502,963    |            
|Advances from joint venture partner (Note 5)          |   | 951,161    |             |   | -          |            
|                                                     
|                                                      |   |            | 1,128,062   |   |            | 502,963     |  
|Shareholders' equity                                  |   |            |             |   |            |             |  
|Capital stock (Note 7)                                |   |            |             |   |            |            
|Authorized                                            |   |            |             |   |            |             |  
|Unlimited common shares without par value             |   |            |             |   |            |            
|Issued                                                |   |            |             |   |            |             |  
|35,437,076 (2006  35,371,076) common shares          |   | 68,001,686 |             |   | 67,968,686 |            
|Contributed surplus (Note 7)                          |   | 3,482,089  |             |   | 3,427,682  |            
|Accumulated other comprehensive loss                  |   | (441,509   | )           |   | -          |            
|Deficit                                               |   |            | (59,119,087 | ) |            | (61,952,691 | )
|                                                     
|                                                      |   |            | 11,923,179  |   |            | 9,443,677   |  
|                                                     
|                                                      |   | $          | 13,051,241  |   | $          | 9,946,640   |  

|Nature of operations(Note 1)
|----------------------------
|Commitments(Note 12)        
|Subsequent events(Note 16)  

The accompanying notes are an integral part of these consolidated financial statements.

F-3

---

|MADISON MINERALS INC.                
|-------------------------------------
|(An Exploration Stage Company)       
|CONSOLIDATED STATEMENTS OF OPERATIONS
|(Expressed in Canadian dollars)      
|YEAR ENDED OCTOBER 31                

|                                                           |   | 2007       |   |   | 2006       |   |   | 2005        |  
|---------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                          
|                                                          
|                                                          
|EXPENSES                                                   |   |            |   |   |            |   |   |             |  
|Accounting and audit                                       | $ | 36,102     |   | $ | 39,455     |   | $ | 32,000      |  
|Amortization                                               |   | 5,973      |   |   | 7,514      |   |   | 9,662       |  
|Consulting (Note 10(a))                                    |   | -          |   |   | 24,000     |   |   | -           |  
|Filing fees                                                |   | 24,577     |   |   | 21,952     |   |   | 19,944      |  
|Insurance                                                  |   | 11,408     |   |   | 8,932      |   |   | 4,544       |  
|Interest and loan bonus                                    |   | -          |   |   | -          |   |   | 30,991      |  
|Legal fees (Note 10(a))                                    |   | 45,478     |   |   | 44,220     |   |   | 61,845      |  
|Office and rent                                            |   | 196,765    |   |   | 196,222    |   |   | 182,295     |  
|Office reimbursements (Note 10(c))                         |   | (128,082   | ) |   | (101,380   | ) |   | (115,329    | )
|Miscellaneous property expenditures                        |   | -          |   |   | 22,944     |   |   | -           |  
|Public relations                                           |   | 143,354    |   |   | 104,813    |   |   | 139,276     |  
|Salaries and benefits                                      |   | 349,142    |   |   | 286,256    |   |   | 225,633     |  
|Shareholder information                                    |   | 2,572      |   |   | 1,868      |   |   | 2,270       |  
|Stock-based compensation (Note 8)                          |   | 54,407     |   |   | 1,620,691  |   |   | 251,783     |  
|Transfer agents fees                                      |   | 13,141     |   |   | 12,701     |   |   | 13,289      |  
|Travel                                                     |   | 27,759     |   |   | 13,573     |   |   | 79,922      |  
|                                                          
|                                                           |   | (782,596   | ) |   | (2,303,761 | ) |   | (938,125    | )
|                                                          
|OTHER INCOME (EXPENSES)                                    |   |            |   |   |            |   |   |             |  
|Interest earned                                            |   | 236,044    |   |   | 44,607     |   |   | 3,674       |  
|Recovery of mineral property costs previously written down |   |            |   |   |            |   |   |             |  
|(Note 5)                                                   |   | 3,366,331  |   |   | 150,000    |   |   | -           |  
|Project management fees (Note 5)                           |   | 142,425    |   |   | -          |   |   | -           |  
|Foreign exchange gain (loss)                               |   | (128,600   | ) |   | 8,193      |   |   | 11,632      |  
|Cost recoveries (Note 5)                                   |   | -          |   |   | 65,023     |   |   | -           |  
|Gain on sale of marketable securities                      |   | -          |   |   | -          |   |   | 785         |  
|Write-down of mineral property (Note 5)                    |   | -          |   |   | -          |   |   | (44,772,341 | )
|                                                          
|                                                           |   | 3,616,200  |   |   | 267,823    |   |   | (44,756,250 | )
|                                                          
|Income (loss) for the year                                 |   | 2,833,604  |   | $ | (2,035,938 | ) | $ | (45,694,375 | )
|                                                          
|Unrealized gain on marketable securities (Note 4)          |   | 14,450     |   |   |            |   |   |             |  
|Unrealized loss on marketable securities (Note 4)          |   | (487,749   | ) |   |            |   |   |             |  
|                                                          
|                                                           |   | (473,299   | ) |   |            |   |   |             |  
|                                                          
|Comprehensive income for the year                          | $ | 2,360,305  |   |   |            |   |   |             |  
|                                                          
|Basic and diluted earnings (loss) per common share         | $ | 0.08       |   | $ | (0.08      | ) | $ | (2.25       | )
|                                                          
|Weighted average number of common shares outstanding       |   | 35,420,314 |   |   | 27,036,844 |   |   | 20,332,392  |  

The accompanying notes are an integral part of these consolidated financial statements.

F-4

---

|MADISON MINERALS INC.                                                               
|------------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                      
|CONSOLIDATED STATEMENTS OF DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|(Expressed in Canadian dollars)                                                     
|YEARS ENDED OCTOBER 31                                                              

|                                                      |   | 2007        |   |   | 2006        |   |   | 2005        |  
|----------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                     
|                                                     
|                                                     
|STATEMENT OF DEFICIT                                  |   |             |   |   |             |   |   |             |  
|                                                     
|Balance, beginning of year                            | $ | (61,952,691 | ) | $ | (59,916,753 | ) | $ | (14,222,378 | )
|Net income (loss) for year                            |   | 2,833,604   |   |   | (2,035,938  | ) |   | (45,694,375 | )
|                                                     
|Balance, end of year                                  | $ | (59,119,087 | ) | $ | (61,952,691 | ) | $ | (59,916,753 | )
|                                                     
|                                                     
|                                                     
|STATEMENT OF ACCUMULATED OTHER                        |   |             |   |   |             |   |   |             |  
|COMPREHENSIVE INCOME (LOSS)                           |   |             |   |   |             |   |   |             |  
|                                                     
|Balance, beginning of year                            | $ | -           |   |   |             |   |   |             |  
|Adjustment to opening balance on adoption of standard |   |             |   |   |             |   |   |             |  
|(Note 3)                                              |   | 31,790      |   |   |             |   |   |             |  
|Unrealized gain on marketable securities (Note 4)     |   | 14,450      |   |   |             |   |   |             |  
|Unrealized loss on marketable securities (Note 4)     |   | (487,749    | ) |   |             |   |   |             |  
|                                                     
|Balance, end of year                                  | $ | (441,509    | ) |   |             |   |   |             |  

F-5

The accompanying notes are an integral part of these consolidated financial statements.

---

|MADISON MINERALS INC.                
|-------------------------------------
|(An Exploration Stage Company)       
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|(Expressed in Canadian dollars)      
|YEAR ENDED OCTOBER 31                

|                                                      |   | 2007       |   |   | 2006       |   |   | 2005        |  
|----------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                     
|CASH FLOWS FROM OPERATING ACTIVITIES                  |   |            |   |   |            |   |   |             |  
|Net income (loss) for the year                        | $ | 2,833,604  |   | $ | (2,035,938 | ) | $ | (45,694,375 | )
|Items not affecting cash:                             |   |            |   |   |            |   |   |             |  
|Amortization                                          |   | 5,973      |   |   | 7,514      |   |   | 9,662       |  
|Stock-based compensation                              |   | 54,407     |   |   | 1,620,691  |   |   | 251,783     |  
|Recovery of mineral property costs previously written |   |            |   |   |            |   |   |             |  
|down                                                  |   | (3,366,331 | ) |   | -          |   |   | -           |  
|Loan bonus paid in shares                             |   | -          |   |   | -          |   |   | 27,693      |  
|Gain on sale of marketable securities                 |   | -          |   |   | -          |   |   | (785        | )
|Write-down of mineral property                        |   | -          |   |   | -          |   |   | 44,772,341  |  
|                                                     
|Changes in non-cash working capital items:            |   |            |   |   |            |   |   |             |  
|(Increase) decrease in receivables                    |   | (24,232    | ) |   | (24,210    | ) |   | 3,400       |  
|Increase (decrease) in accounts payable and           |   |            |   |   |            |   |   |             |  
|accrued liabilities                                   |   | (66,766    | ) |   | 119,605    |   |   | (6,213      | )
|                                                     
|Net cash used in operating activities                 |   | (563,345   | ) |   | (312,338   | ) |   | (636,494    | )
|                                                     
|CASH FLOWS FROM FINANCING ACTIVITIES                  |   |            |   |   |            |   |   |             |  
|Advances from joint venture partner                   |   | 951,161    |   |   | -          |   |   | -           |  
|Proceeds from issuance of capital stock               |   | 33,000     |   |   | 7,688,882  |   |   | 2,575,815   |  
|Share issuance costs                                  |   | -          |   |   | (290,401   | ) |   | (201,378    | )
|Refund (payment) of deferred financing costs          |   | -          |   |   | 6,000      |   |   | (6,000      | )
|Proceeds from loans                                   |   | -          |   |   | -          |   |   | 120,000     |  
|Repayment of loans                                    |   | -          |   |   | -          |   |   | (120,000    | )
|                                                     
|Net cash provided by financing activities             |   | 984,161    |   |   | 7,404,481  |   |   | 2,368,437   |  
|                                                     
|CASH FLOWS FROM INVESTING ACTIVITIES                  |   |            |   |   |            |   |   |             |  
|Expenditures on mineral properties                    |   | (1,816,867 | ) |   | (677,521   | ) |   | (1,812,961  | )
|Advances to contractors                               |   | (35,443    | ) |   | -          |   |   | -           |  
|Cost of property disposition                          |   | (9,169     | ) |   | -          |   |   | -           |  
|Recovery of mineral property costs                    |   | -          |   |   | 500,000    |   |   | 50,000      |  
|Purchase of equipment                                 |   | (1,037     | ) |   | (2,176     | ) |   | -           |  
|Proceeds from sale of marketable securities           |   | -          |   |   | -          |   |   | 11,885      |  
|                                                     
|Net cash used in investing activities                 |   | (1,862,516 | ) |   | (179,697   | ) |   | (1,751,076  | )
|                                                     
|Change in cash and cash equivalents                   |   | (1,441,700 | ) |   | 6,912,446  |   |   | (19,133     | )
|                                                     
|Cash and cash equivalents, beginning of year          |   | 6,953,033  |   |   | 40,587     |   |   | 59,720      |  
|                                                     
|Cash and cash equivalents, end of year                | $ | 5,511,333  |   | $ | 6,953,033  |   | $ | 40,587      |  

Supplemental disclosure with respect to cash flows(Note 14)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|1. | NATURE OF OPERATIONS
|-- | --------------------

The Company was incorporated in the Province of British Columbia and is in the process of exploring its mineral properties and has not determined whether these properties contain ore reserves that are economically recoverable. To date, the Company has not earned significant revenues and is considered to be in the exploration stage.

The business of exploring mineral properties involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable operations. The recoverability of amounts shown for mineral properties is dependent upon the discovery of economically recoverable ore reserves, securing and maintaining title and beneficial interest in the properties, the ability of the Company to obtain necessary financing to complete exploration and subsequent development, and upon future profitable production from the properties or proceeds from disposition.

Although the Company has taken steps to verify the title to mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to unregistered prior agreements, transfers or native land claims, and title may be affected by undetected defects.

|2. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All significant inter-company transactions and balances have been eliminated upon consolidation.

Use of estimates

The preparation of consolidated financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the year. Significant areas requiring the use of management estimates relate to the determination of impairment of assets, stock-based compensation, asset retirement obligations and the useful lives estimate. Actual results could differ from those reported.

Cash and cash equivalents

Cash and cash equivalents are comprised of cash on hand and demand deposits and term deposits maturing within 90 days from the original date of acquisition. To limit its credit risk exposure in excess of federally insured amounts, the Company places its deposits with financial institutions with high credit standing.

F-7



---



|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|2. | SIGNIFICANT ACCOUNTING POLICIES(cont'd)
|-- | ----------------------------------------

Marketable securities

As a consequence of adopting the new accounting standards set out in Note 3, the Companys holdings of marketable securities are accounted for as financial instruments pursuant to CICA Handbook Section 3855.

During the year ended October 31, 2007 the Companys holdings of marketable securities were classified as available for sale and accounted for as described in Note 3(b), with revaluation gains and losses included in other comprehensive income until the related assets are removed from the balance sheet.

For the 2006 and 2005 fiscal years, investments in marketable securities were recorded at the lower of cost or market value on an individual investment basis.

Mineral properties

All costs related to the acquisition, exploration and development of mineral properties are capitalized by property. If economically recoverable ore reserves are developed, capitalized costs of the related property are reclassified as mining assets and amortized using the unit of production method. When a property is abandoned, all related costs are written off to operations. If, after management review, it is determined that the carrying amount of a mineral property is impaired, that property is written down to its estimated net realizable value. A mineral property is reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

The amounts shown for mineral properties do not necessarily represent present or future values. Their recoverability is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development, and future profitable production or proceeds from the disposition thereof.

Deferred financing costs

Costs directly identifiable with the raising of capital will be charged against the related capital stock. Costs related to shares not yet issued are recorded as deferred financing costs. These costs will be deferred until the issuance of the shares to which the costs relate, at which time the costs will be charged against the related capital stock or charged to operations if the shares are not issued.

Equipment

Equipment is recorded at cost less accumulated amortization, which is provided for using the declining balance method at the following annual rates:

| | Computer equipment     | 30%                           | 
| | ---------------------- | ----------------------------- | 
| | Furniture and fixtures | 20%                           | 
| | Office equipment       | 20%                           | 
| | Leasehold improvements | Straight-line over lease term | 

F-8

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|2. | SIGNIFICANT ACCOUNTING POLICIES(cont'd)
|-- | ----------------------------------------

Asset retirement obligations

The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made. The carrying amount of the related long-lived asset is increased by the same amount as the liability.

Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease to the carrying amount of the liability and the related long-lived asset.

The Company does not have any significant asset retirement obligations.

Foreign currency translation

Foreign operations are integrated and translated using the temporal method. Under this method, monetary assets and liabilities are translated at year-end exchange rates, non-monetary assets and liabilities are translated at rates prevailing at the respective transaction dates, and revenue and expenses, except for amortization, are translated at rates approximating those in effect at the transaction dates. Translation gains and losses are reflected in the loss for the year.

Foreign currency denominated monetary accounts of the Company are translated at the year-end exchange rates. Exchange gains and losses on translation are recognized in the year they arise.

Earnings (loss) per share

The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method, the dilutive effect on earnings (loss) per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. For the years presented, this calculation proved to be anti-dilutive. At October 31, 2007, 2006 and 2005, the total number of potentially dilutive shares excluded from earnings (loss) per share was 5,957,998, 7,797,938 and 6,846,312 respectively.

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the year.

F-9

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|2. | SIGNIFICANT ACCOUNTING POLICIES(cont'd)
|-- | ----------------------------------------

Earnings (loss) per share(contd)

The following weighted average number of shares were used for computation of earnings (loss) per share:

| |                                                        |            |  |            |  |           
| | ------------------------------------------------------ | ---------- |  | ---------- |  | ----------
| |                                                        | 2007       |  | 2006       |  | 2005      
| |                                                       
| | Weighted average shares used in computation of basic   |            |  |            |  |           
| | earnings (loss) per share                              | 35,420,314 |  | 27,036,844 |  | 20,332,392
| |                                                       
| | Effect of diluted securities                           |            |  |            |  |           
| | Stock options and warrants                             | 472,850    |  | -          |  | -         
| |                                                       
| | Weighted average shares used in computation of diluted |            |  |            |  |           
| | earnings (loss) per share                              | 35,893,164 |  | 27,036,844 |  | 20,332,392

Stock-based compensation

The fair value of stock options granted is determined using the Black-Scholes option pricing model and recorded as stock-based compensation expense over the vesting period of the stock options.

Income taxes

Future income taxes are recorded using the asset and liability method, whereby future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that substantive enactment or enactment occurs. To the extent that the Company does not consider it more likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess.

Recent accounting pronouncements

Assessing Going Concern

The Accounting Standards Board (AcSB) amended CICA Handbook Section 1400, to include requirements for management to assess and disclose an entitys ability to continue as a going concern. This section applies to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008.

F-10

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|2. | SIGNIFICANT ACCOUNTING POLICIES(cont'd)
|-- | ----------------------------------------

Recent accounting pronouncements(contd)

Financial Instruments

The AcSB issued CICA Handbook Section 3862, Financial Instruments  Disclosures,which requires entities to provide disclosures in their financial statements that enable users to evaluate (a) the significance of financial instruments for the entity's financial position and performance; and (b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and how the entity manages those risks. The principles in this section complement the principles for recognizing, measuring and presenting financial assets and financial liabilities in Section 3855, Financial Instruments  Recognition and Measurement,Section 3863, Financial Instruments  Presentation,and Section 3865, Hedges. This section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007.

The AcSB issued CICA Handbook Section 3863, Financial Instruments  Presentation,which is to enhance financial statement users' understanding of the significance of financial instruments to an entity's financial position, performance and cash flows. This section establishes standards for presentation of financial instruments and non-financial derivatives. It deals with the classification of financial instruments, from the perspective of the issuer, between liabilities and equity, the classification of related interest, dividends, losses and gains, and the circumstances in which financial assets and financial liabilities are offset. This section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007.

Capital Disclosures

The AcSB issued CICA Handbook Section 1535, which establishes standards for disclosing information about an entity's capital and how it is managed. This section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007.

Accounting Changes

The AcSB issued CICA Handbook Section 1506. The main features of this new standard are (a) voluntary changes in accounting policy are made only if they result in the financial statements providing reliable and more relevant information; (b) changes in accounting policy are applied retrospectively unless doing so is impracticable (as defined in the section); (c) prior period errors are corrected retrospectively; and (d) new disclosures are required in respect of changes in accounting policies, changes in accounting estimates and correction of errors. This new standard is effective for fiscal years beginning on or after January 1, 2007.

The Company is currently assessing the impact of the above new accounting standards on its consolidated financial statements.

F-11

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|3. | CHANGE IN ACCOUNTING POLICIES
|-- | -----------------------------

Effective November 1, 2006, the Company adopted the following new accounting standards issued by the Canadian Institute of Chartered Accountants (CICA) relating to financial instruments. As permitted by the new standards, these have been adopted on a prospective basis with no restatement to prior period financial statements.

| | (a) | Comprehensive Income (Section 1530)
| | --- | -----------------------------------

Comprehensive income is the change in shareholders equity during a period from transactions and other events from non-owner sources. This standard requires certain gains and losses that would otherwise be recorded as part of net earnings to be presented in other comprehensive income until it is considered appropriate to be recognized in net earnings. This standard requires the presentation of comprehensive income, and its components, in a separate financial statement that is displayed with the same prominence as the other financial statements.

Accordingly, the Company now reports comprehensive loss and includes the account accumulated other comprehensive loss in shareholders equity section of the balance sheet.

| | (b) | Financial Instruments  Recognition and Measurement (Section 3855)
| | --- | ------------------------------------------------------------------

Effective November 1, 2006, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants (CICA) under CICA Handbook Section 1530 Comprehensive Income (Section 1530), Section 3251 Equity, Section 3855 Financial Instruments  Recognition and Measurement (Section 3855), Section 3861 Financial Instruments  Disclosure and Presentation and Section 3865 Hedges. These new sections, which apply to fiscal years beginning on or after October 1, 2006, provide requirements for the recognition and measurement of financial instruments and on the use of hedge accounting. Section 1530 establishes standards for reporting and presenting comprehensive income which is defined as the change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income but that are excluded from net income calculated in accordance with Canadian generally accepted accounting principles.

F-12

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|3. | CHANGE IN ACCOUNTING POLICIES(contd)
|-- | --------------------------------------

| | (b) | Financial Instruments  Recognition and Measurement (Section 3855)(contd)
| | --- | ---------------------------------------------------------------------------

Under Section 3855, all financial instruments are classified into one of five categories: held-for-trading, held-to-maturity investments, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments and derivatives are measured in the balance sheet at fair value except for loans and receivables, held-to maturity investments and other financial liabilities which are measured at amortized cost. Subsequent measurement and changes in fair value will depend on their initial classification as follows: (1) held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net income; (2) available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the instrument is derecognized or impaired; and (3) all derivative instruments, including embedded derivatives, are recorded in the balance sheet at fair value unless they qualify for the normal sale normal purchase exemption and changes in their fair value are recorded in income unless cash flow hedge accounting is used, in which case changes in fair value are recorded in other comprehensive income.

As a result of the adoption of these new standards, the Company has classified its cash and cash equivalents as held-for-trading and its marketable securities as available for sale. Receivables are classified as loans and receivables. Accounts payable and accrued liabilities are classified as other financial liabilities, all of which are measured at amortized cost.

Section 3855 also provides guidance on accounting for transaction costs incurred upon the issuance of debt instruments or modification of a financial liability. Transaction costs are now deducted from the financial liability and are amortized using the effective interest method over the expected life of the related liability.

As a result of the application of Section 3855, the Company recognized an adjustment to opening accumulated other comprehensive income (loss) and marketable securities of $31,790, to recognize the fair value increase over the provided carrying value of the investment in Lund Gold Ltd.

| | (c) | Hedging (Section 3865)
| | --- | ----------------------

This new standard specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. The Company currently does not have any hedges.

F-13

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|4. | MARKETABLE SECURITIES
|-- | ---------------------

At October 31, 2007 the Companys holdings of marketable securities consisted of:

|(a) | 289,000 shares of Lund Gold Ltd. (Lund), a company related by having a number of directors in common, acquired in 2003 in consideration of a loan made to Lund by the Company. Prior to the adoption of the new accounting standards described in Note 3, these shares were recorded at a cost of $28,900. Upon the adoption of the new accounting standards, the carrying amount was adjusted to fair value of $60,690, an increase of $31,790. At October 31, 2007 the fair value was $75,140 with the increase in fair value of $14,450 credited to the statement of accumulated other comprehensive income (loss).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | 3,521,648 shares of Buffalo Gold Ltd. (Buffalo), a company with a director in common, acquired in consideration of the sale of 60 per cent of the Companys interest in the Mt. Kare mineral project as described in Note 5. The fair value of these shares received was $3,375,500. At October 31, 2007 the fair value was $2,887,751 with the decrease in fair value of $487,749 charged to the statement of accumulated other comprehensive income (loss).                                                                                                                                                         
|   

|5. | MINERAL PROPERTIES
|-- | ------------------

| |                             |   |         |   |              |   |          
| | --------------------------- | - | ------- | - | ------------ | - | ---------
| |                             |   | Option  |   | Exploration  |   | 2007     
| |                             |   | Fees    |   | Expenditures |   | Total    
| | Lewis Property, Nevada      | $ | 449,975 | $ | 3,964,564    | $ | 4,414,539
| | Belencillo Property, Panama |   | -       |   | 42,322       |   | 42,322   
| |                             | $ | 449,975 | $ | 4,006,886    | $ | 4,456,861
| |                            
| |                             |   | Option  |   | Exploration  |   | 2006     
| |                             |   | Fees    |   | Expenditures |   | Total    
| | Lewis Property, Nevada      | $ | 416,764 | $ | 2,440,203    | $ | 2,856,967
| | Belencillo Property, Panama |   | -       |   | 42,322       |   | 42,322   
| |                             | $ | 416,764 | $ | 2,482,525    | $ | 2,899,289

F-14

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

| |                            |   | Lewis     |   | Belencillo |   | Mt. Kare,  |   |   |           |  
| | -------------------------- | - | --------- | - | ---------- | - | ---------- | - | - | --------- | -
| |                            |   | Property, |   | Property,  |   | Papua      |   |   |           |  
| |                            |   | Nevada    |   | Panama     |   | New Guinea |   |   | Total     |  
| |                           
| | Balance, October 31, 2005  | $ | 2,124,230 | $ | -          | $ | 500,000    |   | $ | 2,624,230 |  
| |                           
| | Assays                     |   | 68,071    |   | 9,999      |   | -          |   |   | 78,070    |  
| | Camp costs                 |   | 5,858     |   | 868        |   | -          |   |   | 6,726     |  
| | Contractors and geological |   |           |   |            |   |            |   |   |           |  
| | staff                      |   | 120,293   |   | 9,409      |   | -          |   |   | 129,702   |  
| | Drilling                   |   | 382,562   |   | -          |   | -          |   |   | 382,562   |  
| | Geological supplies and    |   |           |   |            |   |            |   |   |           |  
| | equipment                  |   | 16,486    |   | -          |   | -          |   |   | 16,486    |  
| | Helicopter                 |   | -         |   | 4,687      |   | -          |   |   | 4,687     |  
| | Insurance                  |   | 8,933     |   | -          |   | -          |   |   | 8,933     |  
| | Land and legal             |   | 57,580    |   | 9,720      |   | -          |   |   | 67,300    |  
| | Option fees                |   | 48,808    |   | -          |   | -          |   |   | 48,808    |  
| | Travel and accommodation   |   | 24,146    |   | 1,389      |   | -          |   |   | 25,535    |  
| | Trenching                  |   | -         |   | 6,250      |   | -          |   |   | 6,250     |  
| | Recovery of resource       |   |           |   |            |   |            |   |   |           |  
| | property costs             |   | -         |   | -          |   | (500,000   | ) |   | (500,000  | )
| |                           
| |                            |   | 732,737   |   | 42,322     |   | (500,000   | ) |   | 275,059   |  
| |                           
| | Balance, October 31, 2006  |   | 2,856,967 |   | 42,322     |   | -          |   |   | 2,899,289 |  
| |                           
| |                           
| | Assays                     |   | 240,446   |   | -          |   | -          |   |   | 240,446   |  
| | Camp costs                 |   | 19,730    |   | -          |   | -          |   |   | 19,730    |  
| | Contractors and geological |   |           |   |            |   |            |   |   |           |  
| | staff                      |   | 262,244   |   | -          |   | -          |   |   | 262,244   |  
| | Drilling                   |   | 875,964   |   | -          |   | -          |   |   | 875,964   |  
| | Geological supplies and    |   |           |   |            |   |            |   |   |           |  
| | equipment                  |   | 18,204    |   | -          |   | -          |   |   | 18,204    |  
| | Insurance                  |   | 6,845     |   | -          |   | -          |   |   | 6,845     |  
| | Land and legal             |   | 38,293    |   | -          |   | -          |   |   | 38,293    |  
| | Option fees                |   | 33,211    |   | -          |   | -          |   |   | 33,211    |  
| | Travel and accommodation   |   | 32,825    |   | -          |   | -          |   |   | 32,825    |  
| | Trenching                  |   | 29,810    |   | -          |   | -          |   |   | 29,810    |  
| |                           
| |                            |   | 1,557,572 |   | -          |   | -          |   |   | 1,557,572 |  
| |                           
| | Balance, October 31, 2007  | $ | 4,414,539 | $ | 42,322     | $ | -          |   | $ | 4,456,861 |  

F-15

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

Lewis Property, Nevada

The Company and Great American Minerals, Inc. (GAM) entered into an exploration and option to purchase agreement with Victory Exploration Inc. (formerly F. W. Lewis Inc.) dated May 29, 2002 (the Lewis Agreement) to jointly acquire a 100% interest in the Lewis Property, located in Lander County in the Battle Mountain District of central Nevada.

The Company and GAM also entered into a joint venture letter agreement dated May 23, 2002 (the GAM Agreement) whereby the Company acquired a 60% interest in the Lewis Agreement and the Company and GAM have elected to participate in the further exploration and development of the Lewis Property on a 60/40 joint venture basis.

To exercise their option to acquire a joint 100% interest in the Lewis Property, the Company and GAM must make the following payments:

|i)   | US$25,000 on execution of the Lewis Agreement (paid);                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------
|    
|ii)  | US$2,000 per month from June 1, 2002 to December 1, 2002 (paid);                                                                            
|    
|iii) | US$3,000 per month thereafter until the purchase option in the Lewis Agreement is exercised or terminated (paid through December, 2007); and
|    
|iv)  | Purchase option price of US$2,000,000 by December 31, 2007 (Note 16).                                                                       
|    

On March 29, 2006, the Company and GAM entered into an Exploration, Development, and Mine Operating Agreement and are proceeding with further exploration and development of the Lewis Property on a 60/40 basis as the Phoenix Joint Venture (the Venture). Under the Venture, the Company is the project manager and as a result, the Company will recover certain exploration expenditures from GAM as well as charging an administration fee to recover certain office, general and administrative expenses.

As at October 31, 2007, GAM had advanced $951,161 (2006 - $Nil) to the Company, in its capacity as the project manager, towards future exploration and acquisition costs on the project.

The Lewis Property is subject to an advance minimum royalty of US$60,000 per year (Note 16) commencing on the exercise of the purchase option, a 5% gross royalty on gold or silver produced and a 4% net smelter returns royalty on all other metals. These royalties can be purchased for US$4,000,000 for a period of one year following the exercise of the purchase option increasing by US$500,000 per annum on each anniversary of the date of exercise of the purchase option for a period of 35 years. The purchase option was exercised in December 2007 (Note 16).

Mt. Kare, Papua New Guinea

Prior to the June 2007 agreement described below, the Company held a 90% interest in the Mt. Kare property located in Papua New Guinea. The 90% interest is held in Madison Enterprises (PNG) Ltd. (MPNG). The remaining 10% of the property was held in trust for the traditional landowners at Mt. Kare.

F-16

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

Mt. Kare, Papua New Guinea(contd)

The interest in the Mt. Kare property is by way of an exploration license, renewable in two-year terms. The license provides that, at any time prior to the commencement of mining, the government of Papua New Guinea may purchase up to a 30% equity interest for a price equal to its proportionate share of the accumulated historical exploration expenditures of the owner(s), and then will be required to participate pro-rata in additional required development expenditures. The exploration license was renewed for a two-year term to August 2008.

Pursuant to a series of agreements and amendments between July 2005 and June 2007 among the Company, MBVI, MPNG, Longview Investment Ltd. (Longview Investment), an arms length private Irish company, Longview Capital Partners Limited (Longview), a wholly-owned subsidiary of Longview Investment, and Buffalo, the Company agreed to convey, and as of October 31, 2007 has conveyed, 60% interest in MPNG to Buffalo (effectively representing a 54% interest in the Mt. Kare property). The consideration received to date includes:

|a) | $650,000 in cash in stages by October 1, 2006, all of which has been paid;                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------
|  
|b) | The completion of a 3000 meter drilling program by February 1, 2007 (done);                                                          
|  
|c) | The delivery of $500,000 in cash (or the equivalent value in shares of Buffalo) upon regulatory and government approvals (delivered);
|  
|d) | The delivery of 3,000,000 shares of Buffalo (delivered).                                                                             
|  

The payment of $500,000 was effected by the delivery of 521,648 shares, and the total fair value recorded on the delivery of the aggregate 3,521,648 shares was $3,375,500.

Buffalo (including its subsidiaries) has also been granted a second option, to increase its interest in MPNG to 75 per cent, by the delivery of a bankable feasibility study to MBVI on or before June 25, 2011, or on or before June 25, 2012 at Buffalos election provided Buffalo has expended a minimum of $500,000 in defined project expenditures in each of the agreement years ended June 25, 2008, 2009, 2010 and 2011. If Buffalo does not exercise its second option, Buffalo and MBVI will form a joint venture held 60 per cent and 40 per cent respectively. If Buffalo exercises its second option, it may elect to purchase MBVIs remaining 25 per cent interest based upon an arms length valuation under industry standards, for cash or its equivalent in shares of Buffalo based on market prices at the time of election.

The Company wrote down the carrying value of the property to $500,000 on October 31, 2005. The Company has received payments, of $650,000, under the agreement above. As a result, the Mt. Kare Project now has a $Nil value on the balance sheet. The additional $150,000 payment received in cash in fiscal 2006, and the $3,375,500 proceeds received in Buffalo shares in fiscal 2007, less cash costs of $9,169, have been recorded in the statement of operations as a recovery of costs previously written down.

F-17

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

Belencillo Property, Panama

The Company holds a 31.12% interest in the Belencillo exploration concession located in the Republic of Panama. The Company wrote off $2,267,471 in costs on this property during the year ended October 31, 2001, as the Company had no intention of making further expenditures on the property at that time. During the year ended October 31, 2006, the Company and other interest holders re-evaluated their intentions and the Company incurred costs of $42,322 on this project, which continue to be carried pursuant to the Companys accounting policies.

|6. | EQUIPMENT
|-- | ---------

| |                        |   |         |   |              |   |            |   |         |   |              |   |           
| | ---------------------- | - | ------- | - | ------------ | - | ---------- | - | ------- | - | ------------ | - | ----------
| |                        |   |         |   | 2007         |   |            |   |         |   | 2006         |   |           
| |                        |   |         |   | Accumulated  |   | Net        |   |         |   | Accumulated  |   | Net       
| |                        |   | Cost    |   | Amortization |   | Book Value |   | Cost    |   | Amortization |   | Book Value
| |                        |   |         |   |              |   |            |   |         |   |              |   |           
| |                        |   |         |   |              |   |            |   |         |   |              |   |           
| | Computer equipment     | $ | 126,027 | $ | 118,819      | $ | 7,208      | $ | 126,027 | $ | 115,730      | $ | 10,297    
| | Furniture and fixtures |   | 64,320  |   | 55,835       |   | 8,485      |   | 64,320  |   | 53,713       |   | 10,607    
| | Office equipment       |   | 25,666  |   | 22,617       |   | 3,049      |   | 25,666  |   | 21,855       |   | 3,811     
| | Leasehold              |   |         |   |              |   |            |   |         |   |              |   |           
| | improvements           |   | 1,037   |   | -            |   | 1,037      |   | -       |   | -            |   | -         
| |                        |   |         |   |              |   |            |   |         |   |              |   |           
| |                        | $ | 217,050 | $ | 197,271      | $ | 19,779     | $ | 216,013 | $ | 191,298      | $ | 24,715    

F-18

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|7. | CAPITAL STOCK AND CONTRIBUTED SURPLUS
|-- | -------------------------------------

| |                                |            |   |            |   |   |             |  
| | ------------------------------ | ---------- | - | ---------- | - | - | ----------- | -
| |                                | Number     |   |            |   |   | Contributed |  
| |                                | of Shares  |   | Amount     |   |   | Surplus     |  
| |                               
| |                               
| |                               
| | Balance as at October 31, 2004 | 17,124,316 | $ | 58,131,339 |   | $ | 1,490,387   |  
| | Loan bonus (a)                 | 36,924     |   | 27,693     |   |   | -           |  
| | Private placement (b)          | 3,655,100  |   | 2,375,815  |   |   | -           |  
| | Broker warrants (b)            | -          |   | -          |   |   | 43,767      |  
| | Corporate finance fee (b)      | 60,000     |   | 39,000     |   |   | -           |  
| | Share issue costs (b)          | -          |   | (287,382   | ) |   | -           |  
| | Private placement (c)          | 800,000    |   | 200,000    |   |   | -           |  
| | Compensation (d)               | 156,839    |   | 41,563     |   |   | -           |  
| | Stock-based compensation       | -          |   | -          |   |   | 251,783     |  
| |                               
| | Balance as at October 31, 2005 | 21,833,179 |   | 60,528,028 |   |   | 1,785,937   |  
| | Exercise of stock options      | 559,400    |   | 317,949    |   |   | (114,297    | )
| | Exercise of warrants           | 1,460,460  |   | 789,807    |   |   | (59,577     | )
| | Private placement (e)          | 5,000,000  |   | 1,400,000  |   |   | -           |  
| | Broker warrants (e,g)          | -          |   | -          |   |   | 194,928     |  
| | Share issue costs (e,g)        | -          |   | (485,329   | ) |   | -           |  
| | Compensation (f)               | 218,037    |   | 63,231     |   |   | -           |  
| | Private placement (g)          | 6,300,000  |   | 5,355,000  |   |   | -           |  
| | Stock-based compensation       | -          |   | -          |   |   | 1,620,691   |  
| |                               
| | Balance as at October 31, 2006 | 35,371,076 |   | 67,968,686 |   |   | 3,427,682   |  
| | Exercise of warrants           | 66,000     |   | 33,000     |   |   | -           |  
| | Stock-based compensation       | -          |   | -          |   |   | 54,407      |  
| |                               
| | Balance as at October 31, 2007 | 35,437,076 | $ | 68,001,686 |   | $ | 3,482,089   |  

Shareholder rights plan

The shareholders of the Company have adopted a shareholder rights plan (the Plan) creating the potential for substantial dilution of an acquirer's position except with respect to a "permitted bid." The rights issuable to shareholders under the Plan entitle the holders, other than the acquiring person, to purchase an additional share at 50% of the market price, upon the occurrence of certain triggering events. The main such event is the acquisition of 20% or more of the common shares of the Company by an individual or several persons acting in concert in a transaction not approved by the board of directors. The Plan has a ten-year term and expires on March 5, 2008.

F-19

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|7. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)
|-- | ----------------------------------------------

Share issuances

|a) | During the year ended October 31, 2005, the Company arranged for loans totalling $120,000 to cover certain trade payables and operating costs. The loans were repaid in 2005. The Company issued the lenders 36,924 common shares at a value of $27,693 as a loan bonus and paid interest at 12% per annum compounded monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Included in the loan was $70,000 borrowed from directors of the Company and 21,539 shares were issued to these directors as part of the loan bonus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|b) | During the year ended October 31, 2005, the Company completed a brokered private placement of 3,655,100 units at a price of $0.65 per unit in two parts by issuing 1,056,000 units in December 2004 and 2,599,100 units in February 2005. The Company received total cash proceeds of $2,171,200, net of cash commission to the agent of $161,416 and share issue costs of $43,199. Each unit consisted of one common share and one share purchase warrant, every full warrant entitling the holder to purchase one additional share of the Company at a price of $0.90 per share, if exercised on or before June 9, 2006 as to 1,056,000 units, and if exercised on or before August 3, 2006 as to 2,599,100 units. The agent also received a corporate finance fee of 60,000 shares with a value of $39,000, brokers warrants entitling the purchase of up to 397,332 shares of the Company at $0.90 per share, with 126,720 warrants exercisable on or before June 9, 2006 and 270,612 warrants exercisable on or before August 3, 2006, and an administration fee of $7,500 included in share issue costs. The fair value of the broker warrants was estimated to be $43,767 with a corresponding share purchase warrant amount recorded in shareholders equity. The fair value was estimated using the Black-Scholes option pricing model with a risk- free interest rate of 2.9%, an expected life of two years, expected volatility of 60% and an expected dividend yield of 0.0%.
|  
|c) | In July 2005, the Company completed a private placement with Longview (Note 5) of 800,000 units of the Company at a price of $0.25 per unit for gross proceeds of $200,000. Each unit consisted of one common share of the Company and one half of a non-transferable share purchase warrant, each whole warrant entitling the purchase of an additional share of the Company at a price of $0.35 per share if exercised on or before July 5, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|d) | During the year ended October 31, 2005, the Company issued 156,839 common shares valued at $41,563, to the president of the Company as compensation for accrued wage expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  

F-20

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|7. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)
|-- | ----------------------------------------------

Share issuances(contd)

|e) | In December 2005, the Company closed a private placement of 5,000,000 units at a price of $0.28 per unit to generate cash proceeds of $1,277,960, net of cash commission to the agent of $78,400 and share issue costs of $43,640. Each unit consisted of one share and one half share purchase warrant, every whole warrant entitling the purchase of one additional share of the Company at a price of $0.50 per share until December 7, 2007. The warrants are subject to forced conversion provisions whereby after April 7, 2006 and until the expiry date of the warrants, if the closing price of the Companys shares exceeds $1.00 for twenty consecutive trading days, the Company may, within thirty days of such twenty consecutive trading day period, provide notice that the warrants will expire within thirty days following the provision of such notice if not exercised. The agent also received brokers warrants entitling the purchase of up to 350,000 common shares of the Company on the same terms as the warrants described above. The fair value of the broker warrants was estimated to be $72,162 with a corresponding share purchase warrant amount recorded in shareholders equity. The fair value was estimated using the Black-Scholes option pricing model with a risk-free interest rate of 3.77%, an expected life of two years, expected volatility of 72.03% and an expected dividend yield of 0.0%.      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|f) | In November 2005, the Company issued 218,037 shares at a value of $63,231 to related parties with 114,762 shares valued at $33,281 issued to the president of the Company as compensation for accrued wage expense and 103,275 shares valued at $29,950 issued to a law firm controlled by a director for accrued legal fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|g) | In October 2006, the Company closed a private placement of 6,300,000 units at a price of $0.85 per unit to generate cash proceeds of $5,186,639, net of cash commission to the agent of $102,417 and share issue costs of $65,944. Each unit consisted of one share and one half share purchase warrant, every whole warrant entitling the purchase of one additional share of the Company at a price of $1.20 per share until October 11, 2008. The warrants are subject to forced conversion provisions whereby after February 12, 2007 and until the expiry date of the warrants, if the closing price of the Companys share exceeds $2.40 for fifteen consecutive trading days, the Company may, within thirty days of such fifteen consecutive trading day period provide notice that the warrants will expire within thirty days following the provision of such notice if not exercised. The agent also received brokers warrants entitling the purchase of up to 175,700 common shares of the Company on the same terms as the warrants described above. The fair value of the broker warrants was estimated to be $122,766 with a corresponding share purchase warrant amount recorded in shareholders equity. The fair value was estimated using the Black-Scholes option pricing model with a risk-free interest rate of 4.06%, an expected life of two years, expected volatility of 110.37% and an expected dividend yield of 0.0%.
|  

|8. | STOCK OPTIONS
|-- | -------------

The Company has a rolling stock option plan that authorizes the board of directors to grant incentive stock options to directors, officers, consultants and employees, whereby a maximum of 10% of the issued common shares are reserved for issuance under the plan. Under the Plan, the exercise price of each option may not be less than the market price of the Companys shares at the date of grant. Options granted under the Plan will have a term not to exceed five years and be subject to vesting provisions as determined by the board of directors of the Company.

F-21

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|8. | STOCK OPTIONS(contd)
|-- | ----------------------

As at October 31, 2007, the following stock options were outstanding:

| |           |  |   |          |                  
| | --------- |  | - | -------- | -----------------
| | Number    |  |   | Exercise |                  
| | of Shares |  |   | Price    | Expiry Date      
| |          
| | 359,684   |  | $ | 1.00     | December 30, 2007
| | 50,000    |  |   | 0.42     | May 1, 2008      
| | 20,000    |  |   | 2.30     | December 3, 2008 
| | 115,000   |  |   | 1.75     | March 10, 2009   
| | 100,000   |  |   | 0.75     | May 27, 2010     
| | 500,000   |  |   | 0.38     | May 27, 2010     
| | 1,837,616 |  |   | 1.10     | October 20, 2011 
| | 200,000   |  |   | 0.77     | April 12, 2013   
| |          
| | 3,182,300 |  |   |          |                  

The number of stock options exercisable at October 31, 2007 is 3,082,300.

Subsequent to the year end, the options with expiry date of December 30, 2007 expired unexercised.

Stock option transactions are summarized as follows:

| |                          |            |   |      |          |     
| | ------------------------ | ---------- | - | ---- | -------- | ----
| |                          | 2007       |   | 2006 |          | 2005
| |                         
| |                          |            |   |      | Weighted |     
| |                          |            |   |      | Average  |     
| |                          | Number     |   |      | Exercise |     
| |                          | of Options |   |      | Price    |     
| |                         
| | Outstanding,             |            |   |      |          |     
| | Beginning of year        | 3,082,700  |   | $    | 0.97     |     
| |                         
| | Granted                  | 200,000    |   |      | 0.77     |     
| | Cancelled/forfeited      | (100,400   | ) |      | 0.75     |     
| | Exercised                | -          |   |      |          |     
| |                         
| | Outstanding, end of year | 3,182,300  |   | $    | 0.96     |     

The weighted average fair value of options granted during the current fiscal year was approximately $0.54 (2006 -$0.88; 2005 - $0.21) per option.

The total fair value of stock options granted and vested during the current fiscal year was $54,407 (2006 -$1,620,691; 2005 - $251,783) which has been recorded as stock-based compensation in the results of operations.

F-22

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|8. | STOCK OPTIONS(contd) | 
|-- | --------------------- | 

The fair value of stock options granted is estimated using the Black-Scholes option pricing model with the following assumptions:

| |                                 |         |  |         |  |             | 
| | ------------------------------- | ------- |  | ------- |  | ----------- | 
| |                                 | 2007    |  | 2006    |  | 2005        | 
| |                                
| |                                
| | Risk-free interest              | 4.12%   |  | 4.08%   |  | 3.3  3.7%  | 
| | Expected option life            | 5 years |  | 5 years |  | 3 - 5 years | 
| | Expected stock price volatility | 88%     |  | 110%    |  | 61 67 %    | 
| | Expected dividend yield         | -       |  | -       |  | -           | 

|9. | SHARE PURCHASE WARRANTS
|-- | -----------------------

As at October 31, 2007, the following share purchase warrants were outstanding and exercisable:

| |           |  |   |          |                  
| | --------- |  | - | -------- | -----------------
| | Number    |  |   | Exercise |                  
| | of Shares |  |   | Price    | Expiry Date      
| |          
| |          
| | 1,262,500 |  | $ | 0.50     | December 7, 2007*
| | 61,040    |  |   | 0.50     | December 7, 2007*
| | 3,149,998 |  |   | 1.20     | October 11, 2008*
| | 175,700   |  |   | 1.20     | October 11, 2008*
| |          
| | 4,649,238 |  |   |          |                  

*These warrants are subject to a forced conversion provision as described in Note 7.

Subsequent to the year end, the warrants exercisable at $0.50 expired unexercised.

F-23

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|9. | SHARE PURCHASE WARRANTS(contd)
|-- | --------------------------------

Share purchase warrant transactions are summarized as follows:

| |                   |           |   |      |          |     
| | ----------------- | --------- | - | ---- | -------- | ----
| |                   | 2007      |   | 2006 |          | 2005
| |                  
| |                   |           |   |      | Weighted |     
| |                   |           |   |      | Average  |     
| |                   | Number    |   |      | Exercise |     
| |                   | of shares |   |      | Price    |     
| |                  
| | Outstanding,      |           |   |      |          |     
| | Beginning of year | 4,715,238 |   | $    | 0.99     |     
| | Issued            | -         |   |      | -        |     
| | Exercised         | (66,000   | ) |      | 0.50     |     
| | Expired           | -         |   |      | -        |     
| |                  
| | Outstanding,      |           |   |      |          |     
| | End of year       | 4,649,238 |   | $    | 1.00     |     

Included in share purchase warrants issued during the year ended October 31, 2006, are 525,700 warrants issued with a fair value of $194,928 (Note 7 (e) and (g)).

Included in share purchase warrants issued during the year ended October 31, 2005 are 397,332 warrants issued with a fair value of $43,767 (Note 7 (b)).

|10. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

|a) | The Company incurred the following expenses with directors and a company related by way of directors in common:
|-- | ---------------------------------------------------------------------------------------------------------------
|  

| |                           |   |         |   |         |   |        
| | ------------------------- | - | ------- | - | ------- | - | -------
| |                           |   | 2007    |   | 2006    |   | 2005   
| |                          
| | Legal and consulting fees | $ | 29,550  | $ | 78,075  | $ | 137,226
| | Wages and benefits        |   | 206,431 |   | 216,772 |   | 228,745

Professional and consulting fees and wages and benefits have been expensed to operations, capitalized to mineral properties or recorded as share issue costs, based on the nature of the expenditure.

|b) | At October 31, 2007, accounts payable and accrued liabilities included $5,932 (2006 - $7,797) due to directors of the Company and companies related by way of directors in common, and receivables included $34,088 (2006  nil) due from companies related by way of directors in common.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|c) | During the year ended October 31, 2007, the Company recorded reimbursements of $128,082 (2006 - $101,380; 2005 - $115,329) for rental of office space from companies related by way of directors in common, under rental agreements between the related companies.                        
|  

F-24

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2006                              

|10. | RELATED PARTY TRANSACTIONS(contd)
|--- | -----------------------------------

|d) | During the year ended October 31, 2006, the Company issued 114,762 (2005 - 156,839) common shares, valued at $33,281 (2005  $41,563), to the president of the Company as compensation for accrued wage expense and 103,275 (2005  Nil) common shares valued at $29,950 (2005 - $Nil) to a law firm controlled by a director for accrued legal fees.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

Additional related party transactions are disclosed in Notes 4, 5 and 7(a).

These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

|11. | INCOME TAXES
|--- | ------------

A reconciliation of income taxes at statutory rates with reported taxes is as follows:

| |                                                     |   |           |   |   |            |   |   |             |  
| | --------------------------------------------------- | - | --------- | - | - | ---------- | - | - | ----------- | -
| |                                                     |   | 2007      |   |   | 2006       |   |   | 2005        |  
| |                                                    
| | Income (loss) for the year                          | $ | 2,833,604 |   | $ | (2,035,938 | ) | $ | (45,694,375 | )
| |                                                    
| | Expected income tax recovery (expense)              | $ | (976,262  | ) | $ | 742,160    |   | $ | 16,047,865  |  
| | Tax deductible share issue costs                    |   | 67,842    |   |   | 21,172     |   |   | 54,563      |  
| | Write-down of mineral property                      |   | -         |   |   | -          |   |   | (15,724,046 | )
| | Items not deductible for tax purposes               |   | (20,803   | ) |   | (593,530   | ) |   | (91,544     | )
| | Non-taxable items                                   |   | 1,159,802 |   |   | -          |   |   | -           |  
| | Losses for which no tax benefit has been recognized |   | (230,579  | ) |   | (169,802   | ) |   | (286,838    | )
| |                                                    
| | Total income tax recovery                           | $ | -         |   | $ | -          |   | $ | -           |  

The significant components of the Companys future income tax assets are as follows:

| |                                        |   |            |   |   |            |   |   |            |  
| | -------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| |                                        |   | 2007       |   |   | 2006       |   |   | 2005       |  
| |                                       
| | Future income tax assets (liabilities) |   |            |   |   |            |   |   |            |  
| | Mineral properties and equipment       | $ | 989,324    |   | $ | 1,134,040  |   | $ | 1,206,861  |  
| | Marketable securities                  |   | (12,485    | ) |   | -          |   |   | -          |  
| | Non-capital loss carry-forwards        |   | 1,684,317  |   |   | 1,685,577  |   |   | 1,997,772  |  
| | Share issue costs                      |   | 82,206     |   |   | 155,427    |   |   | 144,630    |  
| |                                       
| |                                        |   | 2,743,362  |   |   | 2,975,044  |   |   | 3,349,263  |  
| | Less: valuation allowance              |   | (2,743,362 | ) |   | (2,975,044 | ) |   | (3,349,263 | )
| |                                       
| |                                        | $ | -          |   | $ | -          |   | $ | -          |  

F-25

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|11. | INCOME TAXES(contd)
|--- | ---------------------

The Company has non-capital losses of approximately $6,200,000 available for deduction against future years taxable income in Canada. These losses, if unutilized, will expire through to 2027. The future tax benefits which may arise as a result of these non-capital losses, resource expenditures and share issue costs have not been recognized in these consolidated financial statements and have been offset by a valuation allowance.

Subject to certain restrictions, the Company has exploration and development expenditures available to reduce future taxable income in Canada, the United States and Papua New Guinea. Future tax benefits that may arise as a result of these expenditures have not been recognized in these consolidated financial statements.

|12. | COMMITMENTS
|--- | -----------

| | a) | The Company is committed to make lease payments for the rental of office space as follows:
| | -- | ------------------------------------------------------------------------------------------

| | Fiscal | 2008 | $ | 175,095 | 
| | ------ | ---- | - | ------- | 
| |        | 2009 |   | 224,622 | 
| |        | 2010 |   | 227,477 | 
| |        | 2011 |   | 237,048 | 
| |        | 2012 |   | 239,371 | 

The Company seeks to reduce its lease costs through recoveries from related companies (Note 10 (c)).

| | b) | The Company is committed to certain advance royalty expenditures at the Lewis Property, as set out in Note 5.
| | -- | -------------------------------------------------------------------------------------------------------------

|13. | SEGMENT INFORMATION
|--- | -------------------

The Company has one operating segment being the exploration of mineral properties located in the United States (Note 5). All equipment is held in Canada (Note 6).

F-26

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|14. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
|--- | --------------------------------------------------

| |                                                               |   |           |   |   |           |   |   |          |  
| | ------------------------------------------------------------- | - | --------- | - | - | --------- | - | - | -------- | -
| |                                                               |   | 2007      |   |   | 2006      |   |   | 2005     |  
| |                                                              
| |                                                              
| | Non-cash operating activities                                 |   |           |   |   |           |   |   |          |  
| | Accounts payable incurred for mineral property                |   |           |   |   |           |   |   |          |  
| | expenditures                                                  | $ | 83,147    |   | $ | 342,442   |   | $ | 244,904  |  
| | Accrued wage and legal expense settled with capital stock     |   | -         |   |   | (63,231   | ) |   | (41,563  | )
| | Loan bonus paid in shares                                     |   | -         |   |   | -         |   |   | (27,693  | )
| | Accrued deferred financing costs                              |   | -         |   |   | (5,885    | ) |   | 5,885    |  
| |                                                              
| | Non-cash financing activities                                 |   |           |   |   |           |   |   |          |  
| | Exercise of stock options                                     |   | -         |   |   | (114,297  | ) |   | -        |  
| | Contributed surplus allocated to capital stock on exercise of |   |           |   |   |           |   |   |          |  
| | options                                                       |   | -         |   |   | 114,297   |   |   | -        |  
| | Exercise of share purchase warrants                           |   | -         |   |   | (59,577   | ) |   | -        |  
| | Contributed surplus allocated to capital stock on exercise of |   |           |   |   |           |   |   |          |  
| | warrants                                                      |   | -         |   |   | 59,577    |   |   | -        |  
| | Shares issued for loan bonus                                  |   | -         |   |   | -         |   |   | 27,693   |  
| | Shares issued to agent for corporate finance fee              |   | -         |   |   | -         |   |   | 39,000   |  
| | Share issue costs incurred from corporate finance fee         |   | -         |   |   | -         |   |   | (39,000  | )
| | Share purchase warrants issued to broker                      |   | -         |   |   | 194,928   |   |   | 43,767   |  
| | Share issue costs incurred with share purchase warrants       |   | -         |   |   | (194,928  | ) |   | (43,767  | )
| | Deferred financing costs allocated to share issue costs       |   | -         |   |   | -         |   |   | 3,237    |  
| | Share issue costs allocated from deferred financing costs     |   | -         |   |   | -         |   |   | (3,237   | )
| | Capital stock issued for accrued wage and legal expense       |   | -         |   |   | 63,231    |   |   | 41,563   |  
| | Accrued deferred financing costs                              |   | -         |   |   | 5,885     |   |   | (5,885   | )
| |                                                              
| | Non-cash investing activities                                 |   |           |   |   |           |   |   |          |  
| | Resource property expenditures incurred through               |   |           |   |   |           |   |   |          |  
| | accounts payable                                              | $ | (83,147   | ) | $ | (342,442  | ) | $ | (244,904 | )
| |                                                              
| |                                                              
| | Cash and cash equivalents consist of:                         |   |           |   |   |           |   |   |          |  
| | Cash                                                          | $ | 5,498,410 |   | $ | 6,940,646 |   | $ | 28,634   |  
| | Short-term investments                                        |   | 12,923    |   |   | 12,387    |   |   | 11,953   |  
| |                                                              
| |                                                               | $ | 5,511,333 |   | $ | 6,953,033 |   | $ | 40,587   |  
| |                                                              
| |                                                              
| | Interest paid during the year                                 | $ | -         |   | $ | -         |   | $ | -        |  
| | Income taxes paid during the year                             |   | -         |   |   | -         |   |   | -        |  

F-27

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|1.5 | FINANCIAL INSTRUMENTS
|--- | ---------------------

The Companys financial instruments consist of cash and cash equivalents, marketable securities, receivables, accounts payable and accrued liabilities and advances from joint venture partner. Unless otherwise noted, it is managements opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.

The Company is subject to financial risk arising from fluctuations in foreign currency exchange rates. The Company does not use any derivative instruments to reduce its exposure to fluctuations in foreign currency exchange rates.

|16. | SUBSEQUENT EVENT
|--- | ----------------

On December 27, 2007 the parties to the Phoenix Joint Venture described in Note 5 exercised their option to purchase the Lewis mineral property by making a cash payment of USD $2,000,000 together with the first payment of the advance royalty in the cash amount of USD $60,000. These payments were funded by the Company as to 60 per cent and by GAM as to 40 per cent.

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTEDACCOUNTING PRINCIPLES
|--- | --------------------------------------------------------------------------------------

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). Material variations in accounting principles, practices and methods used in preparing these consolidated financial statements from principles, practices and methods accepted in the United States (U.S. GAAP) are described and quantified below:

Balance sheets

| |                         |   |            |   |           
| | ----------------------- | - | ---------- | - | ----------
| |                         |   | 2007       |   | 2006      
| |                        
| |                         |   | Balance,   |   |           
| |                         |   | Canadian   |   |           
| |                         |   | GAAP       |   | Adjustment
| |                        
| | Marketable securities   | $ | 2,962,890  | $ | -         
| | Other current assets    |   | 5,576,268  |   | -         
| | Mineral properties      |   | 4,456,861  |   | (4,130,600
| | Advances to contractors |   | 35,443     |   | -         
| | Equipment               |   | 19,779     |   | -         
| |                        
| |                         | $ | 13,051,241 | $ | (4,130,600
| |                        
| | Current liabilities     | $ | 1,128,062  | $ | -         
| | Shareholders equity    |   | 11,923,179 |   | (4,130,600
| |                        
| |                         | $ | 13,051,241 | $ | (4,130,600

F-28

---

|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTEDACCOUNTING PRINCIPLES(contd)
|--- | -----------------------------------------------------------------------------------------------

Loss for the year

| |                                                     |   |            |   |   |            |   |   |             |  
| | --------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------- | -
| |                                                     |   | 2007       |   |   | 2006       |   |   | 2005        |  
| |                                                    
| |                                                    
| | Income (loss) for the year  Canadian GAAP          | $ | 2,833,604  |   | $ | (2,035,938 | ) | $ | (45,694,375 | )
| | Mineral properties written off                      |   |            |   |   |            |   |   |             |  
| | under Canadian GAAP                                 |   | -          |   |   | -          |   |   | 44,772,341  |  
| | Exploration expenditures expensed                   |   |            |   |   |            |   |   |             |  
| | under U.S. GAAP                                     |   | (1,524,361 | ) |   | (226,251   | ) |   | (1,394,477  | )
| |                                                    
| | Income (loss) for the year - U.S. GAAP              |   | 1,309,243  |   |   | (2,262,189 | ) |   | (2,316,511  | )
| | Holding gains (loss) on marketable securities       |   | -          |   |   | 31,790     |   |   | (59,215     | )
| | Unrealized loss on marketable securities  Canadian |   |            |   |   |            |   |   |             |  
| | GAAP and U.S. GAAP                                  |   | (473,299   | ) |   | -          |   |   | -           |  
| |                                                    
| | Comprehensive income (loss) - U.S. GAAP             | $ | 835,944    |   | $ | (2,230,399 | ) | $ | (2,375,726  | )
| |                                                    
| | Basic and diluted earnings (loss) per share - U.S.  |   |            |   |   |            |   |   |             |  
| | GAAP                                                | $ | 0.04       |   | $ | (0.08      | ) | $ | (0.11       | )

Cash flows

| |                                      |   |            |   |   |          |   |   |            |  
| | ------------------------------------ | - | ---------- | - | - | -------- | - | - | ---------- | -
| |                                      |   | 2007       |   |   | 2006     |   |   | 2005       |  
| |                                     
| |                                     
| | Cash flows from operating activities |   |            |   |   |          |   |   |            |  
| | Per Canadian GAAP                    | $ | (563,345   | ) | $ | (312,338 | ) | $ | (636,494   | )
| | Expenditures on mineral properties   |   | (1,783,656 | ) |   | (628,713 | ) |   | (1,776,151 | )
| | Recovery of mineral property costs   |   | -          |   |   | 500,000  |   |   | 50,000     |  
| |                                     
| | Per U.S. GAAP                        | $ | (2,347,001 | ) | $ | (441,051 | ) | $ | (2,362,645 | )
| |                                     
| | Cash flows from investing activities |   |            |   |   |          |   |   |            |  
| | Per Canadian GAAP                    | $ | (1,862,516 | ) | $ | (179,697 | ) | $ | (1,751,076 | )
| | Expenditures on mineral properties   |   | 1,783,656  |   |   | 628,713  |   |   | 1,776,151  |  
| | Recovery of mineral property costs   |   | -          |   |   | (500,000 | ) |   | (50,000    | )
| |                                     
| | Per U.S. GAAP                        | $ | (78,860    | ) | $ | (50,984  | ) | $ | (24,925    | )

F-29

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|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED **ACCOUNTING PRINCIPLES**(contd)
|--- | ----------------------------------------------------------------------------------------------------

| | a) | Mineral properties
| | -- | ------------------

Mineral property costs and related exploration expenditures are accounted for in accordance with Canadian GAAP as disclosed in Note 2. For U.S. GAAP purposes, the Company expenses, as incurred, the acquisition and exploration costs relating to unproven mineral properties. The Company also considers the provisions of EITF 04-02 Whether Mineral Rights are Tangible or Intangible Assets which concluded that mineral rights are tangible assets. Accordingly, the Company capitalizes certain costs related to the acquisition of mineral rights. When proven and probable reserves are determined for a property and a feasibility study prepared, then subsequent development costs of the property would be capitalized. The capitalized costs of such properties would then be amortized using the unit of production method over the estimated life of the ore body based on proven and probable reserves and would be measured periodically for recoverability of carrying values.

| | b) | Stock-based compensation
| | -- | ------------------------

Effective November 1, 2006, the Company adopted SFAS No. 123 (revised), Share-Based Payment (SFAS 123(R)), utilizing the modified prospective approach. The impact of adopting this standard did not materially affect the Companys financial position, results of operations or cash flows because the Company previously applied the fair valued based method of accounting for stock options prescribed by SFAS 123, Accounting for Stock-Based Compensation.

Under Canadian GAAP, the Company accounts for stock-based compensation using the fair value method as disclosed in Note 2. Accordingly, there is no difference between Canadian GAAP and U.S. GAAP on accounting for stock-based compensation for the years ended October 31, 2007, 2006 and 2005.

| | c) | Marketable securities
| | -- | ---------------------

Under Canadian GAAP for the 2005 and 2006 fiscal years, marketable securities held by the Company were recorded at the lower of cost and market value. Under U.S. GAAP, marketable securities held by the Company would be classified as available for sale equity securities and recorded at market value. Any unrealized holding gains or losses would be reported as a separate component of shareholders equity until realized. This accumulated difference between cost and market value is also recorded as part of comprehensive income. As at October 31, 2006, the unrealized holding gains (losses) for marketable securities were $31,790 (2005 ($59,215)).

Effective November 1, 2007, the Company adopted Section 3855 under Canadian GAAP and classified marketable securities held by the Company as available for sale equity securities and recorded at fair value with changes in fair value recorded record in other comprehensive income. Accordingly, there is no difference between Canadian GAAP and U.S. GAAP on accounting for marketable securities for the year ended October 31, 2007.

F-30

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|MADISON MINERALS INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in Canadian dollars)               
|OCTOBER 31, 2007                              

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED **ACCOUNTING PRINCIPLES**(contd)
|--- | ----------------------------------------------------------------------------------------------------

| | d) | Recent accounting pronouncements
| | -- | --------------------------------

In July 2006, FASB issued Financial Instrument No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (FIN 48), which is a change in accounting for income taxes. FIN 48 specifies how tax benefits for uncertain tax positions are to be recognized, measured and derecognized in financial statements; require certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the balance sheet; and provides transition and interim period guidance, among other provisions. FIN 48 is effective for fiscal years beginning after December 15, 2006.

In September 2006, FASB issued SFAS No. 157 (SFAS 157), Fair Value Measurements. Among other requirements, SFAS 157 defines fair value and establishes a framework for measuring fair value and also expands disclosure about the use of fair value to measure assets and liabilities. SFAS 157 is effective for fiscal years beginning after November 15, 2007.

In February 2007, FASB issued SFAS, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. Such election, which may be applied on an instrument by instrument basis, is typically irrevocable once elected. SFAS 159 is effective for fiscal years beginning after November 15, 2007, and early application is allowed under certain circumstances.

The adoption of these new pronouncements is not expected to have a material effect on the Companys consolidated financial position or results of operations.

F-31





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AMENDED AND RESTATED
OPTION AGREEMENT



made between



LONGVIEW CAPITAL PARTNERS LIMITED

and

BUFFALO GOLD LTD.

and

BUFFALO GOLD (PNG) LTD.

and

MADISON MINERALS INC.

and

MADISON ENTERPRISES (BVI) INC.

and

MADISON ENTERPRISES (PNG) LIMITED

in respect of the

Mt. Kare Property, Papua New Guinea





June 25, 2007

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TABLE OF CONTENTS



|                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------
|PAGE                                                                                                                                                    
|ARTICLE 1 INTERPRETATION
2                                                                                                                              
|1.1
Definitions
2                                                                                                                                       
|1.2
Included Words
5                                                                                                                                    
|1.3
Headings
5                                                                                                                                          
|1.4
References
6                                                                                                                                        
|1.5
Currency
6                                                                                                                                          
|1.6
Knowledge
6                                                                                                                                         
|1.7
Schedules
6                                                                                                                                         
|1.8
Governing Law
6                                                                                                                                     
|1.9
Severability
6                                                                                                                                      
|ARTICLE 2 REPRESENTATIONS AND WARRANTIES
6                                                                                                              
|2.1
Mutual Representations and Warranties
6                                                                                                             
|2.2
Representations and Warranties of MMI, Madison BVI and Madison PNG
7                                                                                
|2.3
Survival of Representations and Warranties
9                                                                                                        
|ARTICLE 3 OPTIONS
9                                                                                                                                     
|3.1
Grant of Options
9                                                                                                                                  
|3.2
Exercise of First Option
9                                                                                                                          
|3.3
Exercise of Second Option
9                                                                                                                         
|3.4
Extension of BFS Delivery Date
10                                                                                                                   
|3.5
Non-Exercise of Second Option
10                                                                                                                    
|3.6
BFS Election
10                                                                                                                                     
|3.7
Appointment of Qualified Person to Provide Valuations
10                                                                                            
|3.8
Delivery of Valuation and Completion of Purchase
10                                                                                                 
|3.9
Buffalo PNGs Election to Terminate
11                                                                                                              
|3.10
Option Termination
11                                                                                                                              
|3.11
Termination Consequences
11                                                                                                                        
|3.12
Agreement Subject to Exchange Approval.
11                                                                                                         
|ARTICLE 4 TECHNICAL COMMITTEE
11                                                                                                                        
|4.1
Composition
11                                                                                                                                      
|4.2
Authority
11                                                                                                                                        
|4.3
Representatives
12                                                                                                                                  
|4.4
Committee Meetings
12                                                                                                                               
|4.5
Notice of Technical Committee Meetings
12                                                                                                           
|4.6
Technical Committee Quorum
12                                                                                                                       
|4.7
Technical Committee Voting
12                                                                                                                       
|ARTICLE 5 OPERATOR RIGHTS AND OBLIGATIONS
12                                                                                                            
|5.1
Operator
12                                                                                                                                         
|5.2
Operator's Obligations
12                                                                                                                           
|5.3
Conduct of Parties
13                                                                                                                               
|5.4
Abandonment of Mineral Rights
13                                                                                                                    
|5.5
Authorization of Madison PNG re Good Standing
14                                                                                                    
|ARTICLE 6 PROGRAMS
14                                                                                                                                   
|6.1
Proposed Work Programs
14                                                                                                                           
|6.2
Program Approval
14                                                                                                                                 
|6.3
Program Amendments
14                                                                                                                               
|6.4
Funding of Programs
14                                                                                                                              
|ARTICLE 7 SHAREHOLDERS AGREEMENT
14                                                                                                                     
|7.1
Entering into of Shareholders Agreement
14                                                                                                          
|7.2
Deemed Contributions to Madison PNG
15                                                                                                              
|7.3
Funding of Madison PNG
15                                                                                                                           
|7.4
Operator
15                                                                                                                                         
|ARTICLE 8 TRANSFERS
15                                                                                                                                  
|8.1
Transfers
15                                                                                                                                        
|8.2
Conditions of Transfers
15                                                                                                                          
|ARTICLE 9 FORCE MAJEURE
16                                                                                                                              
|9.1
Intervening Events
16                                                                                                                               
|9.2
Effect of Intervening Events
16                                                                                                                     
|9.3
Obligation to Remove Intervening Events
16                                                                                                          
|9.4
Giving Notice
16                                                                                                                                    
|ARTICLE 10 CONFIDENTIAL INFORMATION
16                                                                                                                  
|10.1
Confidential Information
16                                                                                                                        
|10.2
Fraudulent or Negligent Disclosure
17                                                                                                              
|10.3
Information in Public Domain
17                                                                                                                    
|10.4
Press Release
17                                                                                                                                   
|ARTICLE 11 DISPUTE RESOLUTION
17                                                                                                                        
|11.1
Single Arbitrator
17                                                                                                                               
|11.2
Jurisdiction of Courts
17                                                                                                                          
|ARTICLE 12 NOTICE
18                                                                                                                                    
|12.1
Notice
18                                                                                                                                          
|ARTICLE 13 GENERAL
19                                                                                                                                   
|13.1
Other Activities and Interests
19                                                                                                                  
|13.2
Entire Agreement
19                                                                                                                                
|13.3
No Waiver
19                                                                                                                                       
|13.4
Further Assurances
19                                                                                                                              
|13.5
Manner of Payment
19                                                                                                                               
|13.6
Enurement
19                                                                                                                                       
|13.7
Special Remedies
20                                                                                                                                
|13.8
Time of the Essence
20                                                                                                                             
|13.9
Counterparts
20                                                                                                                                    
|SCHEDULE A  PROPERTIES DESCRIPTION
SCHEDULE B  FEASIBILITY STUDY DEFINITIONS
SCHEDULE C  SHAREHOLDERS AGREEMENT TERMS
SCHEDULE D  LIST OF LITIGATION



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AMENDED AND RESTATED
OPTION AGREEMENT

THIS AGREEMENTmade as of the 25th day of June, 2007.

BETWEEN:

LONGVIEW CAPITAL PARTNERS LIMITED, a corporation organized under the laws of the British Virgin Islands,

(Longview)

OF THE FIRST PART

AND:

BUFFALO GOLD LTD.,a corporation organized under the laws of Alberta,

(Buffalo)

OF THE SECOND PART

AND:

BUFFALO GOLD (PNG) LTD.,a corporation organized under the laws of Alberta,

(Buffalo PNG)

OF THE THIRD PART

AND:

MADISON MINERALS INC., a corporation organized under the laws of British Columbia,

(MMI)

OF THE FOURTH PART

AND:

MADISON ENTERPRISES (BVI) INC., a corporation organized under the laws of the British Virgin Islands,

(Madison BVI)

OF THE FIFTH PART

AND:

MADISON ENTERPRISES (PNG) LIMITED,a corporation organized under the laws of Papua New Guinea,

(Madison PNG)

OF THE SIXTH PART

WHEREAS:

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|OPTION AGREEMENT
|                







A.

Madison PNG is a wholly-owned subsidiary of Madison BVI, and Madison BVI is a wholly owned subsidiary of MMI.

B.

Madison PNG has a 90% direct and indirect interest in certain mineral properties located in Papua New Guinea and more particularly described in Schedule A (the Properties), and Madison PNG holds the remaining 10% beneficial interest in trust for certain traditional land owners of the Properties.

C.

Longview Investments Ltd. (the 100% parent of Longview) and MMI entered into a letter agreement (the Letter Agreement) dated July 6, 2005 whereby MMI granted Longview the option to earn up to a 65% interest in Madison PNG and the additional right to purchase 100% of Madison PNG.

D.

MMI has (with the consent of Longview Investments Ltd.) novated its rights and obligations in the Letter Agreement to Madison BVI and Longview Investments Ltd. (with the consent of MMI) novated its rights and obligations in the Letter Agreement to Longview.

E.

Longview, MMI, Madison BVI and Madison PNG entered into an Option Agreement dated October 7, 2005 (the Original Option Agreement) to formalize the relationship between them with respect to Longviews option to earn an interest in Madison PNG.

F.

Buffalo has acquired all of the outstanding shares of Longview pursuant to an Option Agreement dated October 20, 2005 between Buffalo, Longview and Longview Capital Holdings Ltd.

G.

Instead of Longview earning an interest in Madison PNG, Buffalo wishes the interest in Madison PNG be earned by Buffalo PNG, which is a wholly owned subsidiary of Buffalo.

H.

The Original Option Agreement was supplemented by a Supplementary Agreement dated November 9, 2005 and revised by letter agreements dated June 22, 2006 and May 17, 2007 and an Amended and Restated Option Agreement dated May 30, 2007, and Longview, Buffalo, Buffalo PNG, MMI, Madison BVI, and Madison PNG have agreed to enter into this Amended and Restated Option Agreement to reflect all of the revisions to the Original Option Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the sum of $10 now paid by Buffalo PNG to MMI, Madison and Madison PNG, the receipt of which is hereby acknowledged by such Parties, and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged by such Parties, the Parties agree as follows:

ARTICLE 1INTERPRETATION

1.1

Definitions

For the purposes of this Agreement, except as otherwise defined herein, the following capitalized words and phrases when used herein have the following meanings:

Assetsmeans the Properties, and any maps, drill core, samples, assays, geological and other technical reports, studies, designs, plans and financial or other records related to the Properties in the possession or under the control of MMI, Madison BVI or Madison PNG as of the date of the Original Option Agreement, or thereafter acquired by the Parties, together with exploration tools, supplies and equipment thereafter acquired by the Parties, that are related to the Properties.

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|----------------
|OPTION AGREEMENT
|                







Back-In Right means the right of the Independent State of Papua New Guinea (the State) to acquire up to 30% participating interest in the Properties, as provided in the conditions of the Mineral Rights granted by the State.

Bankable Feasibility Studyhas the meaning described in Schedule B.

BFS Delivery Date means the day by which either Buffalo or Buffalo PNG must deliver the Bankable Feasibility Study to Madison BVI in order to exercise the Second Option, being the fourth anniversary of the date of execution of this Agreement, unless extended to the fifth anniversary as provided for in Section 3.5

BFS Preparation Period means the period commencing on the date of execution of this Agreement and ending on the BFS Delivery Date.

Business Day means a day on which banks in Vancouver, British Columbia are open for business.

Encumbrance means any mortgage, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), charge, title retention agreement or arrangement, royalty, restrictive covenant or other encumbrance of any nature.

Exchange means the TSX Venture Exchange.

Expenditures means all costs and expenses of whatever kind or nature spent or incurred from the date hereof by the Operator during the Option Period and the BFS Preparation Period, and incurred by all the Parties thereafter, in the conduct of the Operations, including, without limitation:

(a)

in holding the Properties in good standing (including land maintenance costs and any monies expended as required to comply with applicable laws and regulations, such as for the completion and submission of assessment work and filings required in connection therewith), and free from claims by native or indigenous groups, in curing title defects and in acquiring and maintaining surface and other ancillary rights;

(b)

in preparing for and in the application for and acquisition of environmental and other permits necessary or desirable to commence and complete exploration and development activities;

(c)

in doing geophysical and geological surveys, drilling, assaying and metallurgical testing, including costs of assays, metallurgical testing and other tests and analyses to determine the quantity and quality of Minerals, water and other materials or substances;

(d)

in the preparation of work programs and the presentation and reporting of data and other the results thereof including any program for the preparation of a feasibility study or other evaluation of the Properties;

(e)

for environmental remediation and rehabilitation;

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|----------------
|OPTION AGREEMENT
|                







(f)

in acquiring facilities, equipment or machinery, or the use thereof, and for all parts, supplies and consumables;

(g)

for salaries and wages, including actual labour overhead expenses for employees assigned to exploration and development activities;

(h)

travelling expenses and fringe benefits (whether or not required by law) of all persons engaged in work with respect to and for the benefit of the including for their food, lodging and other reasonable needs;

(i)

payments to contractors or consultants for work done, services rendered or materials supplied;

(j)

all taxes levied against or in respect of the Properties, or activities thereon, and the cost of insurance premiums and performance bonds or other security; and

(k)

an overhead fee whereby the Operator can charge all direct and indirect costs it incurs in providing operatorship to the Properties that are attributable to the Properties in an amount that is reasonably in proportion to the Operators spending on the Properties as compared with other projects it may be providing the same services to.

First Optionhas the meaning described in Section 3.1(a).

Interest means a specified percentage interest in the voting equity share capital of Madison PNG.

Letter Agreement has the meaning described in Recital C.

Mineralsmeans all ores, and concentrates or metals derived therefrom, of precious, base and industrial minerals and which are found in, on or under the Properties and may lawfully be explored for, mined and sold pursuant to the Mineral Rights and other instruments of title under which any of the Properties is held.

Mineral Rightsmeans prospecting licences, exploration licences, mining leases, mining licences, mineral concessions and other forms of mineral tenure or other rights to Minerals, or to work upon lands for the purpose of searching for, developing or extracting Minerals under any forms of mineral title recognized under the laws applicable in Papua New Guinea or any subdivision thereof, whether contractual, statutory or otherwise, or any interest therein.

Operations means every kind of work done, or activity performed by the Operator on or in respect of the Properties to carry out or complete Programs including, without limitation, investigating, prospecting, exploring, analysing, developing, property maintenance, sampling, assaying, preparation of reports, estimates and studies, surveying, rehabilitation, reclamation and environmental protection, and further including the management and administration necessary to conduct the foregoing work or activity.

Option Period is the period commencing on October 11, 2005 and ending on the date when a Shareholders Agreement is entered into between Buffalo PNG and Madison BVI.

E-445







---

|                
|----------------
|OPTION AGREEMENT
|                







Operator has the meaning as set out in Section 5.1.

Original Option Agreement has the meaning described in Recital E.

Other Rightsmeans any interest in real property, whether freehold, leasehold, license, right of way, easement, any other surface or other right in relation to real property, and any right, licence or permit in relation to the use or diversion of water, but excluding any Mineral Rights.

Party means a Party to this Agreement, and Parties mean all Parties to this Agreement.

Program means any program to carry out work and incur Expenditures or on the Properties including programs to produce the Bankable Feasibility Study.

Propertiesmeans the Mineral Rights, and Other Rights, if any, described in Schedule A, together with any renewal of any such Mineral Rights or Other Rights and any other form of successor or substitute title therefor, but excluding any Mineral Rights or Other Rights abandoned in accordance with Section 5.4.

Qualified Person has the meaning as set out in National Instrument 43-101 entitled Standards of Disclosure for Mineral Projects, issued by the Canadian Securities Administrators, as amended from time to time.

Second Option has the meaning described in Section 3.1(b).

Share Equivalentmeans a payment in lieu of a cash payment in the form of common shares of Buffalo, but only if Buffalo has its shares listed and posted for trading on a recognised stock exchange in North America, Australia, Europe, or the United Kingdom.  The value of such shares on issuance is deemed to be equal to the volume weighted average price of such shares for the 20 trading days prior to the date on which such Share Equivalent payment is to be made.

Shareholders Agreement means an agreement between Buffalo PNG and Madison BVI, as shareholders of Madison PNG, that governs the affairs of Madison PNG, entered into pursuant to Article 7 and having the terms set out in Schedule C.

Technical Committee means the committee formed pursuant to Article 4.

Valuation means a valuation of the remaining Interest held by Madison BVI, to be prepared by a Qualified Person at Buffalo PNGs sole cost.

1.2

Included Words

This Agreement will be read with such changes in gender or number as the context requires.

1.3

Headings

The headings to the Articles, Sections, subsections or clauses of this Agreement are inserted for convenience only and are not intended to affect the construction hereof.

E-446







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|                
|----------------
|OPTION AGREEMENT
|                







1.4

References

Unless otherwise stated, a reference herein to a numbered or lettered Article, Section, subsection, clause or schedule refers to the Article, Section, subsection, clause or schedule bearing that number or letter in this Agreement.  A reference to this Agreement, hereof, hereunder, herein or words of similar meaning, means this Agreement including the schedules hereto, together with any amendments thereof.

1.5

Currency

All dollar amounts expressed herein, unless otherwise specified, refer to lawful currency of the Canada.

1.6

Knowledge

Where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge of MMI, Madison BVI or Madison PNG, MMI, Madison BVI and Madison PNG confirm that they have made due and diligent inquiry of such persons (including appropriate officers of MMI, Madison BVI and Madison PNG, as applicable) as they consider necessary as to the matters that are the subject of the representations and warranties.

1.7

Schedules

The following schedules are attached to and incorporated in this Agreement by this reference:

A

Properties Description
B

Bankable Feasibility Study Definition
C

Shareholders Agreement Terms
D

List of Litigation

1.8

Governing Law

This Agreement will be construed according to and governed by the laws in force in British Columbia, Canada.

1.9

Severability

If any provision of this Agreement is or becomes illegal, invalid or unenforceable, in whole or in part, the remaining provisions will nevertheless be and remain valid and subsisting and the said remaining provisions will be construed as if this Agreement had been executed without the illegal, invalid or unenforceable portion.

ARTICLE 2REPRESENTATIONS AND WARRANTIES

2.1

Mutual Representations and Warranties

Each Party represents and warrants to the other Parties hereto that, as of the date of this Agreement:

E-447







---

|                
|----------------
|OPTION AGREEMENT
|                







(a)

It is a body corporate duly incorporated or continued and duly organized and validly subsisting under the laws of its organizational jurisdiction.

(b)

It has full power and authority to carry on its business and to enter into this Agreement.

(c)

Neither the execution and delivery of this Agreement nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by any agreement to which it is a Party.

(d)

The execution and delivery of this Agreement does not violate or result in the breach of the laws of any jurisdiction applicable to a Party or pertaining thereto or of its organizational documents.

(e)

All corporate authorizations have been obtained for the execution of this Agreement and for the performance of its obligations hereunder.

(f)

This Agreement constitutes a legal, valid and binding obligation of the Party enforceable against it in accordance with its terms.

2.2

Representations and Warranties of MMI, Madison BVI and Madison PNG

MMI, Madison BVI and Madison PNG each represent and warrant to Buffalo PNG and Buffalo that, as of the date of this Agreement:

(a)

Madison BVI is a wholly-owned subsidiary of MMI.

(b)

Madison PNG is a wholly-owned subsidiary of Madison BVI.

(c)

The Properties, and any Encumbrances in relation thereto, are properly and accurately described in Schedule A.

(d)

The Mineral Rights comprising the Properties have been duly and validly staked, located and recorded pursuant to all applicable laws and regulations in Papua New Guinea and are in good standing and (except as set out in Schedule D) no person has protested and to the best of the MMIs, Madison BVI's or Madison PNGs knowledge there is no basis for protesting the recording of any such claims.

(e)

The Mineral Rights provide Buffalo PNG with the right to develop and exploit the Properties.

(f)

Madison PNG owns and possesses and has good and marketable title to the Properties, and is the 100% registered holder and the 90% beneficial owner to the Properties (as further described in Schedule A), free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever except for the Back-In Right and Encumbrances listed on Schedule Aand, without limiting the generality of the foregoing, neither MMI, Madison BVI nor Madison PNG have entered into and there are not any agreements or options to grant or convey any interest in the Properties or to pay any royalties with respect to the Properties and Madison PNG is in exclusive possession of the Properties.

E-448







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|                
|----------------
|OPTION AGREEMENT
|                







(g)

To the best of its knowledge, except in the actions listed in Schedule D, there are no adverse claims, challenges, suits, actions, prosecutions, investigations or proceedings against or to the ownership of or title to the Properties or any portion thereof, nor to the best of its knowledge is there any basis therefor, nor are any threatened and to the best of its knowledge, the actions listed in Schedule D are without merit.

(h)

No consent or approval of any third Party or governmental agency is required for the execution, delivery or performance of this Agreement by MMI, Madison BVI or Madison PNG or the transfer or acquisition of any interest in the Properties.

(i)

Neither MMI, Madison BVI nor Madison PNG have notice and neither has any knowledge of any proposal to terminate or vary the terms of or rights attaching to any of the Properties from any government or other regulatory authority, or of any challenge to Madison PNGs right, title or interest in any of the Properties.

(j)

To the best of its knowledge, information and belief, no Properties lie within any area as designated by any governmental authority having jurisdiction in any way, that would impair the development of a mining project on such land.

(k)

No proceedings are pending for and neither MMI, Madison BVI nor Madison PNG are aware of any basis for the institution of any proceedings leading to the dissolution or winding-up of Madison BVI or Madison PNG or the placing of either into bankruptcy or subject to any other laws governing the affairs of insolvent persons.

(l)

There are no orders or directions relating to environmental matters requiring any work, repairs, construction or capital expenditures with respect to any of the Properties or the conduct of the business related thereto, nor to the best of MMIs, Madison BVIs or Madison PNGs knowledge have any activities on the Properties been in violation of any environmental law, regulations or regulatory prohibition or order, and to the best of its knowledge, conditions on and relating to the Properties are in compliance with such laws, regulations, prohibitions and orders.

(m)

There has been no material spill, discharge, leak, emission, ejection, escape, dumping, or any release or threatened release of any kind, of any toxic or hazardous substance or waste (as defined by any applicable law) from, on, in or under the Properties or into the environment, except releases permitted or otherwise authorized by such law.

(n)

No toxic or hazardous substance or waste has been disposed of or is located on the Properties as a result of activities of MMI, Madison BVI or Madison PNG.

(o)

No toxic or hazardous substance or waste has been treated on or is now stored on the Properties, other than diesel fuel, jet fuel or other petroleum products used in Operations.

(p)

To the best of MMIs, Madison BVIs or Madison PNGs knowledge, information and belief, there are no pending or ongoing actions taken by or on behalf of any native or indigenous persons pursuant to the assertion of any land claims with respect to lands included in the Properties.

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(q)

To the best of MMIs, Madison BVIs or Madison PNGs knowledge, information and belief, none of the Properties may reasonably be thought to have been acquired, directly or indirectly, as a result of the payment of a bribe to a foreign official or the concealment or conversion of the proceeds of a bribe to a foreign official.

2.3

Survival of Representations and Warranties

The representations and warranties contained in this Agreement are conditions on which the Parties have relied in entering into this Agreement and will survive the execution hereof and the acquisition of any Interest by Buffalo PNG hereunder.

Each Party will indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made or to be fulfilled by it hereunder.  A Party may waive any of such representations, warranties, covenants, agreements or conditions in whole or in part at any time without prejudice to its right in respect of any other breach of the same or any other representation, warranty, covenant, agreement or condition.

ARTICLE 3OPTIONS

3.1

Grant of Options

Madison BVI hereby, grants to Buffalo PNG, subject to the terms and conditions herein, exclusive, irrevocable options to acquire Interests, as follows:

(a)

a 60% Interest (the First Option); and

(b)

subject to and conditional upon exercise of the First Option, an additional 15% Interest (for an aggregate 75% Interest) (the Second Option).

3.2

Exercise of First Option

Buffalo PNG will exercise the First Option and acquire a 60% Interest by:

(a)

Buffalo issuing 3,000,000 common shares to Madison BVI within 10 Business Days of the date of receipt of approval from the Exchange to this agreement and the transactions contemplated herein; and

(b)

Buffalo making a cash payment (or the Share Equivalent at Buffalos election) to Madison BVI of $500,000.00 within 10 Business Days of the date of receipt of approval from the Exchange to this agreement and the transactions contemplated herein.

3.3

Exercise of Second Option

Upon the exercise by Buffalo PNG of the First Option, Buffalo PNG will be entitled to the Second Option, and if either Buffalo PNG or Buffalo completes and delivers to Madison BVI a Bankable Feasibility Study on or before the BFS Delivery Date Buffalo PNG will have exercised the Second Option and will have earned an additional 15% Interest (for an aggregate 75% Interest).

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3.4

Extension of BFS Delivery Date

Buffalo and or Buffalo PNG will be entitled to an extension of one year to the BFS Delivery Date, extending it to the fifth anniversary of the date of execution of this Agreement, if it actively carries out a minimum of $500,000.00 of Expenditures in each of the first four years of the BFS Preparation Period.

3.5

Non-Exercise of Second Option

In the event Buffalo PNG does not exercise the Second Option, Buffalo PNG will have no further options or elections under this Agreement, and Buffalo PNG and Madison BVI will enter into the Shareholders Agreement pursuant to Article 7, where Buffalo PNG has a 60% Interest and Madison BVI has a 40% Interest, subject to dilution provisions.

3.6

BFS Election

If Buffalo PNG or Buffalo delivers a Bankable Feasibility Study to Madison BVI and in so doing exercises the Second Option, on or before the BFS Delivery Date, Buffalo PNG will then have the election to (with written notice of such election to be delivered by Buffalo PNG to Madison BCI within 30 days of the delivery of the Bankable Feasibility Study):

(a)

remain at a 75% Interest and become a party to the Shareholders Agreement, and in such a case Buffalo PNG will have no further options or elections under this Agreement, and if no election is made under this Section 3.6(a), Buffalo PNG will be deemed to make this election, and Buffalo PNG and Madison BVI will enter into the Shareholder Agreement pursuant to Article 7, where Buffalo PNG has a 75% Interest and Madison BVI has a 25% Interest, subject to dilution provisions; or

(b)

purchase Madison BVIs remaining Interest from Madison BVI in accordance with Section 3.7 and Section 3.8.

3.7

Appointment of Qualified Person to Provide Valuations

If Buffalo PNG elects to purchase the remaining Interest from Madison BVI under Section 3.6 then Buffalo PNG may unilaterally appoint a Qualified Person to prepare the Valuation and Madison BVI must accept this appointment and the Valuation prepared and delivered by the Qualified Person, and upon such appointment the provisions of Section 3.8 will apply.

3.8

Delivery of Valuation and Completion of Purchase

Upon the Qualified Person being appointed under Section 3.7, such Qualified Person must complete and deliver the Valuation to the Parties within 30 days of such appointment, whereupon Buffalo PNG or its assignee may acquire, within 30 days following the delivery of the Valuation to Madison BVI, the remaining Interest owned by Madison BVI by paying to Madison BVI consideration equal to the Valuation as determined by the Qualified Person either in cash or, if Buffalo or such assignee is a public company whose shares trade on a recognized stock exchange in North America, Australia, Europe or the United Kingdom, in whole or in part in shares of Buffalo or such assignee based on the volume weighted average price of Buffalos, or such assignees, shares for the 20 trading days prior to Buffalo PNG exercising its option to acquire the remaining Interest owned by Madison BVI.

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3.9

Buffalo PNGs Election to Terminate

For greater certainty, exercise of the First Option and Second Option are within the sole and unfettered discretion of Buffalo PNG, who may elect at any time to terminate the First Option and/or the Second Option by giving 90 days advance notice to that effect to Madison BVI.

3.10

Option Termination

The First Option granted pursuant to Section 3.1(a) will, subject to Article 9, be of no further force or effect and will automatically terminate if Buffalo PNG has not complied with Section 3.2 by the due date set out therein.  If Buffalo PNG exercises the First Option, then the Second Option granted pursuant to Section 3.1(b) will, subject to Article 9, be of no further force or effect and will automatically terminate if Buffalo PNG has not complied with Section 3.3 by the due date set out therein.

3.11

Termination Consequences

If the First Option is terminated pursuant to Section 3.9 or automatically terminates pursuant to Section 3.10, then Buffalo PNG will acquire no Interest and Buffalo PNG will have no further obligations to MMI, Madison BVI or Madison PNG with respect to the Properties or this Agreement.

3.12

Agreement Subject to Exchange Approval.

If required by the Exchange, this Agreement will be subject to receipt of the approval of the Exchange by Buffalo and MMI, which approval Buffalo and MMI will use their respective best efforts to obtain after the execution and delivery of this Agreement by the Parties hereto, and upon receiving such approval, each party will forthwith provide the other with notice of such approval.  This Agreement will have no force or effect if Buffalo and MMI do not receive such Exchange approval by June 30, 2007.

ARTICLE 4TECHNICAL COMMITTEE

4.1

Composition

During the Option Period, a Technical Committee for conducting work in the Properties, consisting of one representative of each of Buffalo PNG and Madison BVI, will be established.

4.2

Authority

The Technical Committee will have the exclusive right and authority to:

(a)

consider and approve all Programs and budgets on the Properties submitted by the Operator and any material amendments to any Program;

(b)

review and approve all reports on the Operations on the Properties; and

(c)

establish and modify its own rules of procedure in a manner not inconsistent with this Agreement.

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4.3

Representatives

Each of Buffalo PNG and Madison BVI, by notice to the other Party, will appoint one representative to the Technical Committee.  Each of Buffalo PNG and Madison BVI may appoint one or more alternate representatives to act in the absence of its representatives and any alternate representative so acting will be deemed to be that Party's representative in respect of the matter upon which he acts.  Each of Buffalo PNG and Madison BVI may change its representatives and any alternate representatives at any time.  Prior notice of any appointment or change will be given to the other Party.

4.4

Committee Meetings

The Operator will call the first Technical Committee meeting and prepare a budget and work program pursuant to Section 5.2 by November 15, 2005, and will then call a Technical Committee meeting at least once every six months thereafter, and in any event within 21 days after any request to do so by any Party entitled to appoint members to the Technical Committee.

4.5

Notice of Technical Committee Meetings

The Operator will give notice, specifying the time and place of, and the agenda for, each Technical Committee meeting to all representatives at least ten days before the time appointed for the meeting.  Technical Committee meetings may be held by telephone conference call.

4.6

Technical Committee Quorum

A quorum for any Technical Committee meeting will be only when the Buffalo PNG representative is present or participating by telephone.

4.7

Technical Committee Voting

All matters decided by the Technical Committee will be decided by the Buffalo PNG representative appointed to the Technical Committee.

ARTICLE 5OPERATOR RIGHTS AND OBLIGATIONS

5.1

Operator

During the Option Period and the BFS Preparation Period, Buffalo PNG will be the operator of the Operations (the Operator). Thereafter the Party holding the greatest Interest will be the Operator.

5.2

Operator's Obligations

The Operator is obligated during the Option Period and the BFS Preparation Period to:

(a)

consider, develop, submit for approval to the Technical Committee and, if approved by the Technical Committee, implement, Programs, and to use its commercially reasonable efforts to include in such Programs Expenditures to evaluate all of the reasonable exploration targets identified on the Properties to date;

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(b)

to pay all Expenditures properly incurred promptly as and when due;

(c)

to conduct all work on or with respect to the Properties in a manner consistent with good exploration, engineering and mining practice and in compliance with the applicable laws, rules, orders and regulations;

(d)

to keep the Properties in good standing and free and clear of all Encumbrances (except for the Back-In Right, liens and taxes not yet due, other inchoate liens and liens contested in good faith by the Operator) and to proceed with all diligence to contest and discharge any such Encumbrance that is filed (unless Buffalo PNG is not permitted to do so under the laws of Papua New Guinea, and in such case it will notify Madison BVI forthwith);

(e)

to permit Madison BVI to inspect, twice per calendar year, all geological, geophysical and geochemical databases in the possession or under the control of the Operator and related to the Properties, along with any samples or drill core obtained therefrom, and access at all reasonable times, at its own sole risk and expense, to the Properties;

(f)

to deliver to Madison BVI reports every two months indicating the status of work being conducted on the Properties, provided that such reports will not be required during those periods in which there is no work being conducted; and

(g)

at its option, use the services of Madison PNGs staff and facilities located in Papua New Guinea.

5.3

Conduct of Parties

During the Option Period and the BFS Preparation Period, each of Buffalo PNG, Buffalo, MMI, Madison and Madison PNG will have the following obligations:

(a)

it will promptly deliver to the other Parties any notices, demands or other material communications relating to any of the Assets that such Party receives;

(b)

it will obtain the prior written approval of the other Parties to the sending of any notice, demand or other material communications relating to any of the Assets to any adjacent property owner or any government or regulatory authority; and

(c)

it will refrain from disposing of its interest in any of the Assets except in accordance with Article 8.

5.4

Abandonment of Mineral Rights

If, during the Option Period or the BFS Preparation Period, Madison BVI or Madison PNG proposes to surrender or abandon any Mineral Rights comprised in the Properties, then it will notify Buffalo PNG of its intent, and such Mineral Rights may only be abandoned with the consent of Buffalo PNG.  Following a surrender, abandonment or transfer under this Section, the Mineral Rights so surrendered, abandoned or transferred will thereafter cease to form part of the Properties and will no longer be subject to this Agreement, save and except with respect to such obligations or liabilities of the Parties as have accrued to the date of such surrender, abandonment or transfer.

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5.5

Authorization of Madison PNG re Good Standing

During the Option Period and the BFS Preparation Period, Madison PNG authorizes Buffalo PNG to keep the Properties in good standing and free and clear of all Encumbrances and to proceed with all diligence to contest and discharge any such Encumbrance that is filed.

ARTICLE 6PROGRAMS

6.1

Proposed Work Programs

At least 60 days prior to the expiry of each calendar year during the BFS Preparation Period the Operator will submit to the Technical Committee a Program for the Properties.  The term of each Program proposed will not exceed 12 months unless the Technical Committee otherwise directs.  Each Program will contain a statement in reasonable detail of the proposed Operations and a budget containing estimates of all Expenditures anticipated to be incurred.

6.2

Program Approval

The Technical Committee will review the Program submitted and may approve the Program with or without amendments to the Program submitted.

6.3

Program Amendments

The Operator may submit to the Technical Committee proposed amendments to any Program, and upon approval thereof by the Technical Committee the Program will be deemed to have been so amended.

6.4

Funding of Programs

During the BFS Preparation Period, Buffalo PNG will be 100% responsible for the funding of all Programs (including without limitation the preparation of the Bankable Feasibility Study).

ARTICLE 7SHAREHOLDERS AGREEMENT

7.1

Entering into of Shareholders Agreement

Upon Buffalo PNG and Madison BVI being required to enter into the Shareholders Agreement as provided for  in Sections 3.5 or 3.6:

(a)

Madison BVI will forthwith transfer to Buffalo PNG the applicable Interest Buffalo PNG has earned in Madison PNG; and

(b)

Madison BVI and Buffalo PNG will enter into the Shareholders Agreement (having the terms set out in Schedule C) for the purposes of carrying out all such acts as are necessary or appropriate, directly or indirectly through Madison PNG, to:

(i)

hold the Assets;

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(ii)

explore the Properties for Minerals and, if feasible, develop a mine thereon;

(iii)

so long as it is technically, economically and legally feasible, operate such mine and exploit the Minerals extracted from the Properties; and

(iv)

carry out any other activity in connection with or incidental to any of the foregoing.

7.2

Deemed Contributions to Madison PNG

For the purposes of the future dilution calculations, upon entering into the Shareholders Agreement, Buffalo PNG's contribution to Madison PNG will be deemed to be its percentage Interest in Madison PNG (as of the date of entering into of the Shareholders Agreement) multiplied by the Parties aggregate Expenditures incurred until the end of the Option Period, and Madison BVI's contribution to Madison PNG will be deemed to be its percentage Interest in Madison PNG (as of the date of entering into of the Shareholders Agreement) multiplied by the Parties aggregate Expenditures incurred until the end of the Option Period. The specific nature of the contributions (whether they are in the form of capital, loans or otherwise) will be determined by the Parties taking into consideration the most tax advantageous structure for the Parties.

7.3

Funding of Madison PNG

After the Shareholders Agreement has been entered into, Buffalo PNG and Madison BVI will fund all costs associated with the exploration and development of the Properties through Madison PNG on a pro rata basis, subject to dilution provisions.

7.4

Operator

After the Shareholders Agreement has been entered into, Buffalo PNG will be the Operator of the programs conducted by Madison PNG; however at any time after Madison BVI holds greater than a 50% Interest, Madison BVI will have the election to become the Operator and upon making such an election, Buffalo PNG will be deemed to resign as Operator and Madison BVI will become Operator.

ARTICLE 8TRANSFERS

8.1

Transfers

The Parties may transfer, convey, assign, mortgage or grant an option in respect of or grant a right to purchase or in any manner transfer, alienate or otherwise dispose of any or all of its interest in the Assets or transfer or assign any of its rights under this Agreement.

8.2

Conditions of Transfers

As a condition of any transfer set out in Section 8.1 other than to another Party, the transferee must covenant and agree to be bound by this Agreement, including this Article 8, and prior to the completion of any such transfer, the transferring Party will deliver to the other Party evidence thereof in a form satisfactory to such other Party.  Notwithstanding any such Transfer, the Transferring Party will remain liable for all of its obligations hereunder.

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ARTICLE 9FORCE MAJEURE

9.1

Intervening Events

Notwithstanding any other provisions contained herein, a Party will not be liable for its failure to perform any of its obligations under this Agreement due to a cause beyond its control (except those caused by its own lack of funds) including, but not limited to: acts of God (including without limitation floods, monsoons, hurricanes and typhoons); explosions; strikes, lockouts or other industrial disturbances; laws, rules and regulations or orders of any court or governmental authority; government intervention with operations; any order, instruction or compliance with any requirement of any government official having, or purporting to have, authority in the circumstances; war; civil disobedience; civil unrest or civil riots; non-availability of materials or transportation; unfavourable economic events; protests, demonstrations or other events causing work stoppages by environmental lobbyists or aboriginal peoples' groups or other groups; inability to obtain, or non-issuance of, or delay in issuance of, any governmental permit, licence, approval, decree, consent or undertaking; inability to obtain suitable or adequate machinery, equipment, or labour at a reasonable price, or in a timely fashion; or any acts of terrorism (in this Article, each an Intervening Event).

9.2

Effect of Intervening Events

All time limits imposed by this Agreement (other than for the payment of monies) will be extended by a period equivalent to the period of delay resulting from an Intervening Event.

9.3

Obligation to Remove Intervening Events

A Party relying on the provisions of this Article 9 will take all reasonable steps to eliminate any Intervening Event and, if possible, will perform its obligations under this Agreement as far as practical, but nothing herein will require such Party to settle or adjust any labour dispute or to question or to test the validity of any law, rule, regulation or order of any duly constituted court or governmental authority or to complete its obligations under this Agreement if an Intervening Event renders completion impracticable or, in its reasonable judgment, uneconomic.

9.4

Giving Notice

A Party relying on the provisions of this Article 9 will give notice to the other Parties forthwith upon the occurrence of the Intervening Event and forthwith after the end of the period of delay when such Intervening Event has been eliminated or rectified.

ARTICLE 10CONFIDENTIAL INFORMATION

10.1

Confidential Information

Except as specifically otherwise provided for herein, the Parties will keep confidential all data and information respecting this Agreement and the Assets and will refrain from using it other than for the activities contemplated hereunder, and from publicly disclosing it unless required by law or by the rules and regulations of any regulatory authority or stock exchange having jurisdiction, except with the consent of the other Party, such consent not to be unreasonably withheld.

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10.2

Fraudulent or Negligent Disclosure

MMI, Madison BVI or Madison PNG will not be liable to Buffalo PNG or Buffalo nor will Buffalo PNG or Buffalo be liable to MMI, Madison BVI or Madison PNG for the fraudulent or negligent breaches of confidence (including, without limitation, disclosure of information) by any of their employees, servants or agents, provided that MMI, Madison BVI, Madison PNG, Buffalo PNG or Buffalo, as the case may be, have taken reasonable steps to ensure the preservation of the confidential nature of such information.

10.3

Information in Public Domain

The provisions of this Article 10 do not apply to information which is or becomes part of the public domain other than through a breach of the terms hereof.

10.4

Press Release

The Parties will consult with each other prior to issuing any press release or other public statement regarding the Assets, or the activities of Buffalo PNG, Buffalo, MMI, Madison BVI or Madison PNG with respect thereto.  In addition, each Party will obtain prior consent from the other Party, such consent not to be withheld unreasonably, before issuing any press release or public statement except if such disclosure is required by law or by the rules and regulations of any regulatory authority or stock exchange having jurisdiction. Notwithstanding the above, where a Party requests consent from the other Party of any press release or public statement and the other Party has not responded to such request within five days, then the Party proposing the press release or public statement will be entitled to proceed with its disclosure as if it had received consent from the other Party.  However, any consent by a Party to the other Party issuing a press release or public statement, will not be considered an approval or certification of the consenting Party to the accuracy of the information in such press release or public statement, or a confirmation that such press release or public statement complies with the rules, policies, by-laws and disclosure standards of the applicable regulatory authorities or stock exchanges.

ARTICLE 11DISPUTE RESOLUTION

11.1

Single Arbitrator

It is the intention of the Parties to settle any dispute relating to this Agreement among themselves, but if at any time during the term of this Agreement, or after its termination, any dispute arises between the parties respecting any matter they cannot settle among themselves, then the Parties will settle the dispute by arbitration by one arbitrator pursuant to the provisions of the Commercial Arbitration Act (British Columbia), as from time to time amended or substituted, and at and under the rules of the International Commercial Arbitration Centre in Vancouver, British Columbia.  The decision of the arbitrator shall be final and binding on the Parties.

11.2

Jurisdiction of Courts

Except where matters are expressed herein to be subject to arbitration, the courts of the Province of British Columbia will have exclusive jurisdiction to hear and determine all matters relating to this Agreement.  Nothing contained in this Section 11.2 is intended to affect the rights of a Party to enforce a judgement or award outside of British Columbia.

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ARTICLE 12NOTICE

12.1

Notice

All invoices, notices, consents and demands under this Agreement will be in writing and may be delivered personally, transmitted by fax (with transmission confirmed in writing), or may be forwarded by first class prepaid registered mail as follows:

Notices to Longview will be given to the following address and fax number:

LONGVIEW CAPITAL PARTNERS LIMITED
Pelican Drive
Road Town, Tortola
British Virgin Islands
Facsimile:

+1 284 494 4568
Attention:

The Secretary

Notices to Buffalo and Buffalo PNG will be given to the following address and fax number:

BUFFALO GOLD LTD.
24th Floor, 1111 West Georgia Street
Vancouver, BC  V6E 4M3
Facsimile:

(604) 684-2990
Attention:

The Secretary

Notices to MMI, Madison BVI and Madison PNG will be given to the following address and fax number:

c/o MADISON MINERALS INC.
Suite 2000, Guinness Tower, 1055 West Hastings Street
Vancouver, BC V6E 2E9

Facsimile:

(604) 331-8773
Attention:

The Secretary

or to such addresses as each Party may from time to time specify by notice.  Any notice will be deemed to have been given and received:

(a)

if personally delivered, then on the day of personal service to the recipient Party, provided that if such date is a day other than a Business Day such notice will be deemed to have been given and received on the first Business Day following the date of personal service;

(b)

if by pre-paid registered mail, then the first Business Day, after the expiration of five (5) days following the date of mailing; or

(c)

if sent by facsimile transmission and successfully transmitted prior to 4:00 pm on a Business Day where the recipient is located, then on that Business Day, and if transmitted after 4:00 pm then on the first Business Day following the date of transmission.

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ARTICLE 13GENERAL

13.1

Other Activities and Interests

This Agreement and the rights and obligations of the Parties hereunder are strictly limited to the Properties.  Each Party will have the free and unrestricted right to enter into, conduct and benefit from business ventures of any kind whatsoever, including business ventures involving mineral rights or Mineral Rights, whether or not competitive with the activities undertaken pursuant hereto, without disclosing such activities to the other Parties or inviting or allowing the other to participate including, without limitation.

13.2

Entire Agreement

This Agreement and the exhibits hereto constitute the entire agreement between the Parties and supersede and replace any preliminary or other agreement or arrangement, whether oral or written, express or implied, statutory or otherwise heretofore existing between the Parties in respect of the subject matter of this Agreement, including without limitation the Letter Agreement.  This Agreement may not be amended or modified except by an instrument signed by each of the Parties.

13.3

No Waiver

No consent or waiver expressed or implied by any Party in respect of any breach or default by any other Party in the performance by such other of its obligations hereunder will be deemed or construed to be a consent to, or a waiver of, any other breach or default.

13.4

Further Assurances

The Parties will promptly execute or cause to be executed all documents, deeds, conveyances and other instruments of further assurance which may be reasonably necessary or advisable to carry out fully the intent of this Agreement or to record wherever appropriate the respective interests from time to time of the Parties in the Assets.

13.5

Manner of Payment

All payments to be made to any Party may be made by cheque or draft mailed or delivered to such Party at its address for notice purposes as provided herein, or for the account of such Party at such bank or banks in Canada as designated by each Party.  Such bank or banks will be deemed the agent of the designating Party for the purposes of receiving, collecting and receipting such payment.

13.6

Enurement

This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.





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13.7

Special Remedies

Each of the Parties agrees that its failure to comply with the covenants and restrictions set out in Section 5.4 (Abandonment of Mineral Rights) or Article 10 (Confidential Information) would constitute an injury and cause damage to the other Parties that is impossible to measure monetarily.  Therefore, in the event of any such failure, the other Parties will, in addition and without prejudice to any other rights and remedies that they may have at law or in equity, be entitled to injunctive relief restraining, enjoining or specifically enforcing the provisions of Section 5.4 or Article 10 as the case may be, and any Party intending to breach or which breaches the provisions of Section 5.4 or Article 10 hereby waives any defence it may have in law to such injunctive or equitable relief.

13.8

Time of the Essence

Time is of the essence in the performance of each obligation under this Agreement.

13.9

Counterparts

This Agreement may be executed in any number of counterparts and all such counterparts, taken together, will be deemed to constitute one and the same instrument.  This Agreement may be signed and accepted by facsimile.

























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IN WITNESS WHEREOF this Agreement has been executed as of the date first above given.





|                                 
|---------------------------------
|LONGVIEW CAPITAL PARTNERS LIMITED
|By:Damien Reynolds             
|Name:Damien Reynolds             
|Title:  Chairman                 





|                 
|-----------------
|BUFFALO GOLD LTD.
|By:Brian McEwen
|Name:Brian McEwen
|Title:  President



|                       
|-----------------------
|BUFFALO GOLD (PNG) LTD.
|By:Brian McEwen      
|Name:Brian McEwen      
|Title:  President      



|                     
|---------------------
|MADISON MINERALS INC.
|By:Chet Idziszek   
|Name:Chet Idziszek   
|Title:  President    





|                              
|------------------------------
|MADISON ENTERPRISES (BVI) INC.
|By:Chet Idziszek            
|Name:Chet Idziszek            
|Title:President               

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|                                 
|---------------------------------
|MADISON ENTERPRISES (PNG) LIMITED
|By:Chet Idziszek               
|Name:Chet Idziszek               
|Title:President                  







































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SCHEDULE A

PROPERTY DESCRIPTION



1.

The Properties are defined as follows; (where Madison PNG is the 100% registered holder and is the 90% beneficial holder, and the remaining 10% beneficial interest is held in trust by Madison PNG for traditional landowners of the Properties, through the corporate entity name Kare-Puga Development Corporation PTY Limited)

Exploration Licence EL 1093 granted by the Office of the Register of Tenements, Department of Mining, Papua New Guinea. (Copy of EL 1093 Attached hereto)

2.

The Encumbrances are defined as follows:

None































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SCHEDULE B

FEASIBILITY STUDY DEFINITIONS

The term Bankable Feasibility Study used in this Agreement refers to a Type 4 Economic Feasibility Study which covers all targets with significant economic potential, as determined by Buffalo PNG or Buffalo acting reasonably, on the Properties.



COMPARISON OF THE TYPES OF ECONOMIC FEASIBILITY STUDIES



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item

Ore Body
No. of drill holes

JORC category

Bulk sampling

Mine
Mining method
Mine layout
Equipment selection
Rock mechanics
Visit by mining engineer

Plant & Infrastructure Sites
Plant capacity
Plant and other sites
Maps and surveys
Soil and foundation tests
Site visits by project team

Process
Process flowsheets
Bench scale tests
Pilot plant tests
Energy and material balances

Facilities Design
Nature of Facilities
Equipment selection
General arrangements (mechanical)
General arrangements (structural)
General arrangements (other)
Piping drawings
Electrical drawings
Specifications | Type 1


0-10

Inferred

None


Assumed
None
Hypothetical
None
Possibly


Assumed
Assumed
None
None
Possibly


Assumed
If available
Not needed
Not essential


Conceptual
Hypothetical
None
None
None
None
None
None | Type 2


Sufficient, but at least 3,000 metres
Measured/
Indicated
Possibly


General
Preliminary
Preliminary
None
Recommended


Preliminary
General
If available
None
Recommended


Preliminary
Recommended
Possibly
Preliminary


Possible
Preliminary
Minimum
Outline
Minimum
None
None
Performance | Type 3


Sufficient

Measured/
Indicated



Optimised
General
Optimised
Preliminary
Essential


Optimised
Approximate
Available
Preliminary
Essential


Optimised
Essential
Probably
Optimised


Probable
Optimised
Preliminary
Outline
Outline
One-line
One-line
General | Type 4


Sufficient

Measured/
Indicated



Finalised
Detailed
Finalised
Essential
Essential


Finalised
Specific
Detailed
Final
Essential


Finalised
Essential
Essential
Finalised


Actual
Finalised
Complete
Preliminary
Preliminary
Some detail
Some detail
Detailed













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|Item


Basis for Capital Cost Engineering
Estimates prepared by


Vendor quotations
Civil work


Mechanical work

Structural work


Piping and instrumentation

Electrical work
Indirect costs
Contingency

Operating Cost Determination
Labour rates
Labour burden
Power costs
Fuel costs
Expendable supplies
Reagents
Parts

Economic Analysis
Discounted cash flow
Taxation data
Revenue base


Use of Estimates


Relative Cost | Type 1



Project Engineer


Previous
Rough sketch


% of machinery

Rough sketch


% of machinery

$ per hp
% of total
20-25%


Assumed
Assumed
Assumed
Assumed
Assumed
Assumed
Assumed


Manual
Generalised
Historical


Comparison/
rejection

x | Type 2



Senior Estimators


Single source
Drawing estimate


% of machinery

Preliminary drawings


% of machinery

$ per hp
% of total
15-20%


Investigate
Calculated
Actual
Verbal quote
Verbal quote
Verbal quote
Verbal quote


Detailed
Detailed
Current


General
Feasibility

3x | Type 3



Senior
Estimators

Multiple
Drawing estimate


Man-hours per ton

Take-off per ton


Take-off

Take-off
Calculated
15%


Get contracts
Calculated
Actual
Letter quote
Letter quote
Letter quote
Letter quote


Detailed
Detailed
Letters of indication


Budget


5x | Type 4



Estimating
Department

Competitive
Take-offs


Man-hours per ton

Take-off per ton


Take –off

Take -off
Calculated
10%


Get contracts
Calculated
Contract
Contract
Contract
Contract
Letter quote


Detailed
Detailed
Written proposals


Funding


10x





TYPE 4 ECONOMIC FEASIBILITY STUDY

Basis

A Type 4 estimate is based upon proven ore reserves and contains all of the input of a Type 3 estimate with regard to process information.  Product specifications will be finalised, based on thorough market investigations.  It is based on general arrangement drawings, supported by piping and instrument drawings, and general arrangement drawings of structural steel and concrete.  Drawings prepared may constitute approximately 25% or more of the drawings that will ultimately be required for the project.  The total facility costs are estimated by making quantity take-offs and obtaining subcontract quotations for steel and concrete.  Specifications are prepared and submitted to several machinery vendors who are requested to submit formal proposals.  Machinery installation and electrical costs are determined by a professional estimating department.  A detailed estimate can be prepared covering construction plant and

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construction camp and the contractors field overhead.  Sufficient drawings have been provided so that a detailed estimate can be made of the remaining engineering costs.  Revenue projections are derived from calculated plant performance and payment terms determined from written proposals from smelters or other buyers.

Information Required

In addition to all of the information input contained in Type 2 and Type 3 estimates, it will be necessary to have accurate topographic maps and actual surveys of the plant site, together with foundation data.  A professional estimator should make several trips to the field with the project engineer to obtain information on all local codes and regulations pertaining to land use, and air and water pollution.  Availability and cost of labour should be thoroughly investigated.  All of the factors mentioned in Type 2 and Type 3 estimates which affect operating costs should be obtained in detail, preferably in written quotations from vendors and utility companies.

Skills Employed

A Type 4 capital cost estimate is made entirely by professional estimators, supervised by the project engineer.  Operating costs are estimated by the project engineer.

Use of Estimates

A Type 4 estimate contains minimum contingencies, but never less than 10%.  The percentage assigned to contingencies is a judgement factor, and is not to be interpreted as meaning that estimates are necessarily accurate within this percentage range, nor is there an implied reference to any order of accuracy.  A Type 4 estimate may be suitable for funding of the project; however, clients may differ as to the amount of detail that they require for funding.  A Type 4 estimate should enable the client to authorise the engineers to proceed with a turn-key job of detailed design and construction.  Additional detail design will be required, but the designs and estimates provided in the Type 4 estimate are for the plant that will be built and at this point further modifications would be minimal.  A Type 4 estimate is seldom undertaken unless there is reasonable assurance as to the feasibility of the project.  It may be follow-on work after a Type 1, Type 2 or Type 3 estimate.  Financing is often arranged on the basis of a Type 3 estimate.















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SCHEDULE C

SUMMARY OF SHAREHOLDER AGREEMENT TERMS



1.

Definitions

Any capitalized term used in this Schedule C shall have the meaning ascribed to such term in the Agreement.

In addition, the following terms have the following definitions:

(a)

Agreement means the Option Agreement that this Schedule C is attached to.

(b)

Company means Madison Enterprises (PNG) Limited.

(c)

Participant means a Party that owns Shares.

(d)

Participating Interest of a Participant means its interest in the Project, which is comprised of its Shares and its interest in the Shareholders Agreement, expressed as a percentage.

(e)

Project means the project for mineral exploration and, if warranted, the development and exploitation of mineral deposits located on the Properties, and the distribution to the Parties of the mineral products produced therefrom or of net profits from the sale of such mineral products.

(f)

Shareholders Agreement means a shareholders agreement between Participants governing the affairs of the Company in connection with the Project.

(g)

Shares means common shares in the capital of the Company.

2.

Entering into of Shareholders Agreement

The Participants will enter into the Shareholders Agreement according to Section 7.1 of the Agreement which contemplates the Participants (or their applicable subsidiary) becoming shareholders to the Company and entering into the Shareholders Agreement to govern the affairs of the Participants in respect of the Project and that will be governed by the Shareholders Agreement.  The terms set out in this Schedule are not exhaustive.

3.

Initial Participating Interests and Contributions

Upon the Participants entering into the Shareholders Agreement as set out in Section 7.1 of the Agreement, the Parties will have the Participating Interest as set out in the Agreement, and will be deemed to have made the contributions to the Company as set out in Section 7.2 of the Agreement.  The Participants Participating Interest will be subject to dilution as set out below.

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4.

Management Committee

(a)

Company to be under the management of a management committee (MC) with two members being appointed by each Participant and voting according to the Participants Participating Interests in the Company.

(b)

The board of directors of the Company will delegate all necessary authority and responsibility to the MC to the greatest extent allowable by the laws of the jurisdiction in which it is incorporated, in order to enable the MC to properly manage the affairs of the Company as contemplated herein, and if such delegation is not allowable under the laws of the jurisdiction of the Company, all the provisions of this Section 4 will apply to the Board of Directors of the Company instead of the MC and the Board of Directors will perform all functions of the MC, with adjustments to voting thresholds being made to comply with such laws and no MC will be formed.

(c)

MC decision-making to be on the basis of a majority vote, provided that a special majority of 80% would be required for decisions relating to the following and if no decision can be reached, such decision will be subject to arbitration:

(i)

any production decision;

(ii)

the permanent suspension of operations;

(iii)

any non-arms-length agreements;

(iv)

the granting of any pledge, security interest or other encumbrance over any of the Companys assets, other than in connection with a project financing or the purchase of such assets;

(v)

the consolidation, merger or amalgamation or otherwise combining with any other corporation by the Company;

(vi)

altering, amending or otherwise modifying the authorized capital of the Company or the articles/by-laws of the Company;

(vii)

any split or consolidation of the capital of the Company, whether issued or unissued;

(viii)

selling, transferring or assigning all or substantially all of the assets of the Company;

(ix)

issuing additional shares of the Company;

(x)

changing the number of directors of the Company;

(xi)

winding up the Company or otherwise terminating or ceasing operations of the Company;

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(xii)

providing financial assistance to any Participant or any affiliate or associate of thereof; and

(xiii)

repurchasing all or part of the Shares held by the Participants.

(d)

MC meetings at least semi-annually and permitted by telephone.

5.

Operator

(a)

Participant with largest Participating Interest to be initial operator and will remain so unless operators Participating Interest ceases to be the largest or operator resigns or is removed for default.

(b)

Non-operator may refer question of operator default to arbitration if it is outvoted on MC motion to remove operator for default.

(c)

Operator, among other usual and standard obligations, to keep property in good standing and free of encumbrances, comply with laws, maintain proper books and accounts and adequate insurance and operate according to good mining practices.

(d)

Operator to conduct activities according to approved programs, production programs or operating programs (as the case may be) and budgets, with sole responsibility for overruns exceeding 10% on any such programs and the sole responsibility for any such programs required when there are unexpected circumstances requiring the operator to incur expenditures that were not anticipated in order to protect life and property under emergency conditions, with the operator submitting forthwith a program to the MC to incur such expenditures, with such program being mandatory and deemed approved by the MC.

(e)

If a program or production program to which a Participant elected not to contribute is completed or terminated with less than 80% of the budgeted costs having been incurred, the operator will give the non-contributing Participant notice thereof, including the results of such program or production program, and the non-contributing Participant may, within 30 days after the notice, elect to pay to the Company its proportionate share of the actual costs of the completed program or production program and thereby reinstate its Participating Interest in the Company.  The Company will reimburse the contributing Participant for the additional Shares that it subscribed for, which such Participant will surrender to the Company for cancellation and re-issue to the reinstating Participant, who will thereby regain the percentage of Shares that it held at the commencement of that program or production program.

(f)

Operator right to cash call 90 days in advance to cover anticipated approved program, production program or operating program expenditures, including a reasonable amount of working capital.

(g)

Operators charges for overheads to be 5% of direct costs before a production decision and 3% of direct costs after a production decision.

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(h)

Operator lien on Participants share of production to secure cost share of operating and other costs after commencement of commercial production, with operator right to advance share of Party in default.

(i)

In the event the operator does not submit a program or a production program for a period of 18 months, the non-operator will have the right to submit to the MC a program or production program, and the operator will have the option to accept such non-operator program or production program, or reject it. If it accepts it, the operator will implement such program, and if the operator rejects it, the non-operator can sole fund such program and straight-line dilution will occur of the operators shareholdings in the Company.

6.

Programs and Production Programs

(a)

Operator to submit annual programs or production programs for MC approval and all activities conducted are pursuant to annual approved programs and production programs.

(b)

Production program to be prepared by operator based on an approved Bankable Feasibility Study.

(c)

Approval of first production program constitutes production decision, with production costs to include all costs from the production decision to the commencement of commercial production.

(d)

Each Participant obliged to finance its own cost share of production costs, with the right to pledge its shares in the Company.

(e)

Subject to Section 7.1 of the Agreement,  Participants to have an election as to whether to participate in any approved program or approved production program in accordance with their Participating Interests in the Company.

(f)

Election to participate in an approved program or production program makes a Participant liable for its cost share of all expenditures for that program (including, in the case of a production program, all production costs) and electing not to participate results in straight-line dilution of interest, i.e., the defaulting Participants Participating Interest will be reduced by the figure arrived at by:

(i)

multiplying by 100 the quotient determined by dividing: (x) the sum of the defaulting Participants contributions to date and the amount that the non-contributing Participant elects not to contribute under such applicable program by (y) the sum of both Participants contributions to date and the amount that both Participants are required to contribute under such applicable program; and

(ii)

thereafter recalculating the Participating Interest of the non-contributing Participant by subtracting the figure arrived at in 6(f)(i) above from 100.



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(g)

Failure to pay cost share of an approved program or production program after electing to participate constitutes default and results in dilution at double the rate provided in section 6(f), i.e., the defaulting Participants Participating Interest will be reduced by the figure arrived at by:

(i)

multiplying by 100 the quotient determined by dividing: (x) the sum of the defaulting Participants contributions to date and the amount that the defaulting Participant elects to contribute (but fails to pay) by (y) the sum of both Participants contributions to date and the amount that both Participants elect to contribute to the program (with the amount that the non-defaulting Participant shall contribute on behalf of the defaulting Participant to be multiplied by two); and

(ii)

thereafter recalculating the Participating Interest of the non-defaulting Participant by subtracting the figure arrived at in 6(g)(i) above from 100.

(h)

If a Participants Participating Interest in the Company is diluted to 10% or less its shareholdings in the Company will be converted to a royalty equal to 1% of the net smelter returns from the Properties.

7.

Project Financing

(a)

For joint venture costs after a production decision, operator to secure project financing on the optimal terms available (seeking the most appropriate blend of debt and equity in the context of the approved Bankable Feasibility Study).

(b)

Participants to grant any encumbrance on their Shares which is required under the financing terms to the extent required.

8.

Operating Programs

(a)

Following commencement of commercial production, operator to submit annual operating programs for MC approval and all activities to be conducted pursuant to annual approved operating programs.

(b)

No election by Participant as to participation in approved operating programs; default allows operator lien to be enforced whereby operator can recover defaulted amount from defaulting Participants share of production at a per annum rate equal to the LIBOR plus 3%.

9.

Disposition of Production

Each Participant may take production in kind by way of declaration of a dividend or some other distribution from the Company (subject to operators lien), but is free to make separate arrangements with operator to market its share.



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10.

Transfers of Interests

Transfers to affiliates will be permitted, except transferring party will still be liable for all obligations under the Shareholders Agreement.  All other transfers will be subject to a right of first refusal.

11.

Withdrawal and Winding Up

No withdrawal by a Participant or winding up of the Company or the Project without adequate payment of or security for reclamation and closure costs.

12.

Dividend Policy

In respect of any financial year that the Company has after tax profits available for distribution, each Participant will procure that, subject to only to the prudent financial requirements of the Company, not less that 100% of the after tax profits are distributed to the Participants. The Company shall adopt a policy of declaring and causing to be distributed on a quarterly basis as a dividend or return of capital, cash equal to the amount of the Companys available cash at such time as determined in good faith by the MC.  For purposes of this section, available cash means the maximum amount of cash legally available under applicable laws and contracts to be distributed to the Participants as a dividend from profits or as a return of capital, minus an amount that the MC in good faith determines should be retained in the Company to meet or fund debt service commitments, working capital requirements, capital expenditures (but excluding capital expenditures for project expansions) and reclamation and bonding obligations of the Company and a prudent amount of cash for emergency requirements not to exceed 2 % of the after tax profits for the applicable quarter.  These distributions from the Company to the Participants, whether by way of dividends, loan repayments or otherwise, will be made pro rataaccording to their Participating Interests in the Company.

13.

Other

(a)

Force majeure as in article 9 of the Agreement.

(b)

Confidentiality provisions as in article 10 of the Agreement.

(c)

Arbitration as in article 11 of the Agreement.

(d)

Such other provisions as may be customary and reasonable in mining ventures of this type.



END





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SCHEDULE D

LIST OF LITIGATION

The following is a list of outstanding litigation in respect of the Properties:

(1)

Lapse of alluvial Special Mining Lease

From 1990 to 2000, part of the Properties consisting of 5,010 hectares was subject to an alluvial mining lease (designated SML1K) held at the time of the expiry, by Kare-Puga Development Corporation Limited (KDC).  At one stage, the Government Papua New Guinea (PNG) issued a Regulation which sought to extend the rights under SML1K to include non-alluvial mining rights.  During 1994 and 1995, the predecessors in title of Madison PNG successfully obtained orders from the Courts that the rights associated with SML1K were confined to alluvial mining.  In any case, SML1K expired by effluxion of time on 26 September 2000.  KDC obtained an ex parte interlocutory order from the National Court on 27 September 2000 (in proceedings OS 574/00) which provided that the term of SML1K was extended for a period of one year pending the hearing of claims regarding an extension of SML1K.  These orders were discharged upon application by Madison on 9 February 2001.

(2)

Legal Proceedings  2000 renewal of the Tenement

Legal proceedings were filed in the National Court on 7 December 2000 by KDC and Mt Kare Gold Resources Limited against the Minister for Mining of PNG, the Mining Advisory Board of PNG, Madison PNG and Matu Mining Limited (Matu) seeking to challenge the renewal of the Tenement in 2000.  The application was to be by way of judicial review of the Ministers decision, for which purpose leave to make the application was obtained.  The application has not been pursued by the plaintiffs in these proceedings.  KDC was deregistered by the Registrar of Companies on 27 June 2002 (although it is possible that it can be reinstated).  The proceedings are considered dormant and there are grounds for defending the proceedings.  However, it is possible that they could be reactivated and, if successful, could affect Madison PNGs title to the Properties.

(3)

Action No. 0S No. 902/05 served on Madison PNG on September 30, 2005

Legal proceedings filed by KDC and Mt. Kare Gold Development Corporation Limited against the Minister for Mining of PNG, the Mining Advisory Board of PNG, Madison PNG and Matu and others requesting that (i) the decision to grant the application to renew Exploration Licence 1093 by the Minister of Mining of Papua New Guinea be quashed; (ii) the decision to renew Exploration Licence 1093 by the PNG Mining Advisory Board be quashed; and (iii) an injunction restraining Madison PNG and Matu from carrying out further exploration or development work on Exploration Licence 1093.

(4)

Legal Proceedings threatened by Waim No 85 Ltd.

On March 25, 2004, Madison PNG received a letter of demand from legal counsel to Waim No 85 Ltd., which purports to acts as the agent and representative of the Paila Landowner Groups and the Tari Landowner Groups.  The letter threatens legal proceedings based on alleged breaches concerning the Joint Venture Agreement dated March 10, 1998 and allegations arising from the lapse of SML1K.

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Exhibit 99.1





CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the annual report on Form 20-F of Madison Minerals Inc. (the Company) for the year ended October 31, 2007, as filed with the Securities and Exchange Commission on the date hereof, I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



1.  The annual report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



2.  The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the Company.





Date:  February 29, 2008





Chet Idziszek

Chet Idziszek

President and Chief Executive Officer





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Exhibit 99.2





CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the annual report on Form 20-F of Madison Minerals Inc. (the Company) for the year ended October 31, 2007, as filed with the Securities and Exchange Commission on the date hereof, I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



1.  The annual report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



2.  The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the Company.





Date:  February 29, 2008





Ian Brown

Ian Brown

Chief Financial Officer