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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2013 or [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 or [   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES 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 300, 1055 West Hastings Street, Vancouver, B.C., Canada, V6E 2E9(Address of principal executive offices)


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2 Page 1 of 56 PagesThe Exhibit Index is located on Page 55 Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class

   Name of each exchange on which registeredNone

   _______________
  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. 40,906,727 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 filer [X ] Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP [   ]   International Financial Reporting Standards as issued by the International Accounting Standards Board [ X ] Other [   ]


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3 If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. [Not applicable] Item 17 [   ]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) 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, 2013 unless an earlier or later date is indicated. 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

   8PART I

   

   10ITEM 1.

   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

   10ITEM 2.

   OFFER STATISTICS AND EXPECTED TIMETABLE

   10ITEM 3.

   KEY INFORMATION

   10A.

   Selected Financial Data

   10B.

   Capitalization and Indebtedness

   11C.

   Reasons For The Offer and Use of Proceeds

   11D.

   Risk Factors

   11Risk of Innsolvency

   11Risks Suggested by the Fact that the Company has a History of Net Losses, a Large Accumulated Deficit and a Persistent Lack of Revenue from Operations

   11Risks to Investors of Significant Fluctuations in Share Prices and Share Price Volatility

   12Risks of the Company’s Exploration Efforts Failing to Establish a Viable Mining Project

   12Risks of Failing to Meet Additional Substantial Funding Requirements

   12Risks of Adverse Currency Fluctuations

   12Risks of Being Required to Find Substantial Funding for Development of Mineral Projects

   13Risks Arising from the Company’s Limited Experience with Development-stage Mining Operations

   13Risks of Experiencing Hazards Associated with Mining, if Mining is Attained

   13Risks Arising from the Company’s Exposure to Fluctuations in Mineral Prices

   13Risk of Adverse Claims Against Title to the Company’s Mineral Interests

   13Risks Arising from the Company’s Limited Capacities in the Face of Extensive Industry Competition

   13Risks Arising from the Potential for Conflicts of Interest of the Company’s Directors

   14Risks Arising from Environmental and Other Regulatory Requirements

   14Lack of a History of, or Intention to Make, Dividend Payments

   15Risks to U.S. Investors Arising from the Fact that the Company’s Officers and Directors Reside Outside the U.S., Raising the Risk of Potential Unenforceability of Civil Liabilities and Judgements

   15Risks Inherent in the Fact that the Company’s Stock is subject to Penny Stock Rules

   15Risks to U.S. Investors Should the Company not Successfully Develop and Subsequently Generate Sufficient Cash Flow from its Properties, such that the Company be Classified as a Passive Foreign Investment Company for U.S. Tax Purposes, Possibly Resulting in Additional Taxes to the U.S. Stockholders, and Reduced Liquidity for the Stock

  15


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5 ITEM 4.

   INFORMATION ON THE COMPANY

   16A.

   History and Development of the Company

   16Belencillo Property, Panama

   16Mt. Kare Property, Papua New Guinea

   17Lewis Property, Nevada

   17B.

   Business Overview

   18C.

   Organizational Structure

   18D.

   Property Plants and Equipment

   19Lewis Property, Nevada

   19Title

   19Location, Access & Physiography

   19Plant and Equipment

   20Regional and Local Geology

   20Mineralization

   21Exploration History

   21Exploration – Results 2006 - 2008

   25Mt. Kare Property, Papua New Guinea

   26Belencillo Property, Panama

   26ITEM 5.

   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

   27A.

   Operating Results

   27Operations on the Lewis Property During Fiscal 2013

   27Operations on the Lewis Property During Fiscal 2012

   27Operations on the Lewis Property During Fiscal 2011

   27Fiscal Year Ended October 31, 2013 Compared to Fiscal Year Ended October 31, 2012

   27Fiscal Year Ended October 31, 2012 Compared to Fiscal Year Ended October 31, 2011

   28Management comment

   29Comment on Capital Markets

   29Liquidity

   29October 31, 2013 Compared to October 31, 2012

   30October 31, 2012 Compared to October 31, 2011

   30October 31, 2011 Compared to November 1, 2010

   31Outlook

   31B.

   Research and Development, Patents and Licenses, etc.

   31C.

   Trend Information

   31D.

   Off-Balance Sheet Arrangements

   32E.

   Tabular Disclosure of Contractual Obligations

   32ITEM 6.

   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

   32A.

   Directors and Senior Management

   32B.

   Compensation

   33Option Grants in Last Fiscal Year

   33C.

   Board Practices

   33D.

   Employees

   34E.

   Share Ownership

   34ITEM 7.

   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

   34A.

   Major Shareholders

   34B.

   Related Party Transactions

   35C.

   Interests of Experts and Counsel

  35


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6 ITEM 8.

   FINANCIAL INFORMATION

   35A.

   Consolidated Statements and Other Financial Information

   35B.

   Significant Changes

   35ITEM 9.

   THE OFFER AND LISTING

   36A.

   Offer and Listing Details

   36B.

   Plan of Distribution

   37C.

   Markets

   37D.

   Selling Stockholders

   37E.

   Dilution

   37F.

   Expenses of the Issue

   37ITEM 10.

   ADDITIONAL INFORMATION

   37A.

   Share Capital

   37B.

   Memorandum and Articles of Association

   37C.

   Material Contracts

   40D.

   Exchange Controls

   40E.

   Taxation

   42Material Canadian Federal Income Tax Consequences

   42Dividends

   42Capital Gains

   42Material United States Federal Income Tax Consequences

   43U.S. Holders

   44Distributions on Common Shares of the Company

   44Foreign Tax Credit

   44Information Reporting and Backup Withholding

   45Disposition of Common Shares of the Company

   45Currency Exchange Gains or Losses

   45Other Considerations

   46Foreign Personal Holding Company

   46Foreign Investment Company

   46Passive Foreign Investment Company

   46Controlled Foreign Corporation

   47F.

   Dividends and Paying Agents

   48G.

   Statements by Experts

   48H.

   Documents on Display

   48I.

   Subsidiary Information

   48ITEM 11.

   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   48PART II

   

   48ITEM 12.

   DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

   48ITEM 13.

   DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES

   48ITEM 14.

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

   49ITEM 15.

   CONTROLS AND PROCEDURES

   49ITEM 16.

   [RESERVED]

   50ITEM 16A.

   AUDIT COMMITTEE FINANCIAL EXPERT

  50


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7 ITEM 16B.

   CODE OF ETHICS

   50ITEM 16C.

   PRINCIPAL ACCOUNTANT FEES AND SERVICES

   50ITEM 16D.

   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

   51ITEM 16E.

   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

   51PART III

   

   51ITEM 17.

   FINANCIAL STATEMENTS

   51ITEM 18.

   FINANCIAL STATEMENTS

   52ITEM 19.

   EXHIBITS

   52SIGNATURES

   54EXHIBIT INDEX

  55


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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.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.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.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.Diorite

   A group of plutonic rocks intermediate in composition between acidic and basic.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.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


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9 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.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 or IP

   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.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.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 wellsStratigraphy

   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.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 (1,000 kilograms or 2,204 pounds).


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10 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 summarize selected financial data for the Company (stated in Canadian dollars) prepared, in respect of the years ended October 31, 2013, 2012 and 2011, in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) (“IFRS-IASB”). The Company’s financial statements have been prepared in accordance with IFRS-IASB for the first time for the fiscal year ended October 31, 2012, together with comparative financial statements for the prior fiscal year also in accordance with IFRS-IASB. Pursuant to SEC Release 33-8567 this information is presented solely for these two years, and information based on US GAAP is not provided. 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”. Results for the period ended October 31, 2012 are not necessarily indicative of results for future periods. INFORMATION IN ACCORDANCE WITH IFRS Year Ended October 312013

   2012

   2011(a)

   Total revenue1

   $0

   $100,000

   $0(b)

   Earnings (loss) before extraordinary itemsTotal

   ($418,000)

   ($256,370)

   ($8,172,102)Per Share2

   ($0.01)

   ($0.01)

   ($0.21)(c)

   Total assets

   $130,480

   $449,343

   $603,288(d)

   Total long-term debt

   $0

   $0

   $0(e)

   Capital stock

   $68,673,644

   $68,673,644

   $68,673,644(f)

   Total shareholder equity (deficiency in equity)

   ($335,782)

   $60,543

   $321,248(g)

   Cash dividends declared per share

   none

   none

   none(h)

   Net earnings (loss) for the yearTotal

   ($418,000)

   ($256,370)

   ($8,172,102)Per Share2

   ($0.01)

   ($0.01)

   ($0.21)
 Note 1: Revenue in fiscal 2012 is non-recurring, arising from the sale of a mineral property interest for non-cash share proceeds. Note 2: Per share amounts are not presented on a full-diluted basis as the inclusion of dilutive securities is anti-dilutive. In this Annual Report on Form 20-F, unless otherwise specified, all monetary amounts are expressed in Canadian dollars. On February 24, 2014, the exchange rate, based on the noon buying rate published by the Bank of Canada, for the conversion of United States dollars into Canadian dollars (the “Noon Rate of Exchange”) was $1.1058.


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11 The following table sets out the high and low exchange rates for each of the last six months. 2014

   2013January

   December

   November

   October

   September

   AugustHigh for period

   1.0974

   1.0670

   1.0510

   1.0384

   1.0363

   1.0433Low for period

   1.0910

   1.0616

   1.0470

   1.0345

   1.0322

   1.0385
  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 312013

   2012

   2011

   2010

   2009Average for the period

   1.0301

   1.0046

   0.9868

   1.0378

   1.1697
  B.

   Capitalization and Indebtedness
  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.  C.

   Reasons for the Offer and Use of Proceeds
  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.  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. Risk of insolvency At the fiscal year-end the Company had a working capital deficiency (negative working capital) of $345,065. Subsequently, working capital has diminished by outlays for the advance royalty payment set out in Note 5 to the Financial Statements and by normal course operating expenses. This deficiency is mitigated by the fact that, as set out in Note 7 to the Financial Statements, of current liabilities of $466,262 the amount of $388,730 is accrued and owing to related parties. These parties have informally agreed to not seek payment of their amounts due. On this basis, the Company is solvent and able to meet its other obligations as they become due. Risks suggested by the fact that the Company has a history of net losses, a large accumulated deficit, and a persistent lack of revenue from operations The Company has incurred significant net losses to date. Its deficit as of October 31, 2013 under IFRS was $72,668,040. 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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12 Risks to investors of significant fluctuations in share prices and share price volatility 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 high of $0.14 to a low of $0.025 in the period beginning November 1, 2011 and ending on the date of this Annual Report. It is probable that such price fluctuations will continue to occur, and there can be no assurance that the market price for the Company’s shares will recover significantly from current low valuations. Risks of the Company’s exploration efforts failing to establish a viable mining project 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. Risks of failing to meet additional substantial 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, and this risk appears more likely in the current economic and financial environment. The Company presently has insufficient cash resources to meet its expected share of the 2014 carrying cost of its Lewis Property. Reference is also made to the matters set out above under the heading Risk of Insolvency. The 2014 carrying costs, and any further exploration programs, if adopted in the current or future years, will require additional financing in order 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. Risk of adverse currency fluctuations The Company maintains its accounts in Canadian dollars. The Company’s operations in Nevada expose it to the impact of fluctuations in the foreign exchange rate of the U.S. dollar against the Canadian dollar. In the most recent six months the cost to the Company of purchasing U.S. dollars has fluctuated significantly reflecting volatility in the USD/CAD foreign exchange rate. The Company does not at the present nor does it currently plan in the future to engage in foreign currency transactions to hedge any exchange rate risks.


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13 Risks of being required to find substantial funding for development of mineral projects 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. A similar risk applies to the cost of developing any other mining project. Risks arising from the Company’s 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. Risks of experiencing hazards associated with mining, if mining is attained 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. Risks arising from the Company’s exposure to fluctuations in 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 many varied 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. Risk of adverse claims against title to the Company’s mineral interests 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 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. Risks arising from the Company’s limited capacities in the face of extensive industry competition Significant competition exists for the limited number of mineral property acquisition opportunities available, certainly including in the State of 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


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14 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. Risks arising from the potential for conflicts of interest of the Company’s directors 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. Risks arising from 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 and municipal laws and by-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.


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15 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. To the best of the Company's knowledge, it is currently operating in compliance with all applicable environmental regulations. Lack of a history of, or intention to make, dividend payments 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. Risks to U.S. investors arising from the fact that the Company's officers and directors reside outside the U.S., raising the risk of potential unenforceability of civil liabilities and judgments The Company and its officers and all 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. Risks inherent in the fact that the Company’s stock is 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. Risks to U.S. investors should the Company not successfully develop and subsequently generate sufficient cash flow from its properties, such that the Company be classified as a Passive Foreign Investment Company for U.S. tax purposes, possibly resulting in additional taxes to its U.S. stockholders, and reduced 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


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16 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 (Nevada) Inc., Madison Enterprises (BVI) Inc., a British Virgin Islands corporation (“MBVI”) which, in turn, holds a 100 per cent interest in Madison Enterprises (PNG) Ltd. (“MPNG”), a Papua New Guinea corporation currently in liquidation and, therefore, no longer controlled by the Company, and Madison Enterprises (Latin American), S.A. (“MELA”) incorporated under the laws of the Republic of Panama which is currently inactive and expected to remain so. MPNG has two wholly-owned direct subsidiaries, Frontier Mining & Exploration Limited (“Frontier”) and Oakland Limited (“Oakland”), both Papua New Guinea corporations, which in turn collectively own a 100% interest in Matu Mining Limited (“Matu”), a Papua New Guinea corporation. Frontier Mining & Exploration Limited has one wholly-owned direct subsidiary, Demil Limited (“Demil”) which is a Papua New Guinea corporation. See “Item 4 - Information on the Company -C. Organisational Structure” below. As of the date of this report, to the best of the Company’s knowledge and belief Frontier, Oakland, Matu and Demil are inactive and their assets, liabilities and contingent liabilities are immaterial and not of relevance to investors in, and users of the financial statements of, the Company. Furthermore, MPNG has been placed in liquidation pursuant to the laws of Papua New Guinea, and consequently the Company has ceased to control MPNG and its subsidiaries. At the date of the Company’s most recent year end and at the date of this annual report the Company is unable to estimate the amount of proceeds, if any, from the liquidation of MPNG. All the assets of MELA were sold in the fiscal year ended October 31, 2012 as set out in Notes 3 and 5 to the Financial Statements. The head office and principal office address of the Company is located at Suite 300, 1055 West Hastings Street, Vancouver, British Columbia, Canada V6E 2E9. Its telephone number is 604-331-8772. Belencillo Property, Panama Through a series of transactions from 1993 to 1999, the Company acquired an eventual 31.12% interest in two exploration concessions known collectively as the Belencillo Property located in the Republic of Panama. It wrote off its cumulative resource property and deferred costs totalling $2,267,471 during the fiscal year ended October 31, 2001 and a further minor amount during the fiscal year ended October 31, 2008. During the 2012 fiscal year, the Company sold its interest in the Belencillo Property to an arm’s length entity for common shares of that entity valued at $100,000. As the carrying value of the project had been fully written down, those proceeds were recognized as a gain on sale of the mineral concession. During the same fiscal year, those shares were liquidated for net cash proceeds of $67,763 and a loss on disposal of $32,237 was recognized.


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17 Mt. Kare Property, Papua New Guinea Through a series of transactions from 1996 to 1999, the Company acquired a 90% beneficial interest in the Mt. Kare Property in Papua New Guinea. Through a series of transactions from 2005 to 2007, the Company divested itself of an effective 54% interest in the Mt. Kare Property. The Company’s formerly wholly-owned indirect subsidiary Madison Enterprises (PNG) Ltd. (“MPNG”), owns a 90% beneficial interest in the Mt. Kare Property. MPNG was held, indirectly through subsidiaries, 60% by Buffalo Gold Ltd. (“Buffalo”) and 40% by the Company, such that those entities own an effective 54% and an effective 36% interest in the Mt. Kare Property. The Company subsequently reacquired the interest formerly held by Buffalo at no cost, resulting in the Company once again owning, indirectly through subsidiaries, a 90% interest in the Mt. Kare Property, subject to the remarks below about MPNG being in liquidation. 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 which in turn holds its 10% beneficial interest in trust for such traditional landowners. It is important to note, however, that MPNG is in liquidation, such that MBVI no longer controls MPNG. The Company does not expect to realize any rights of ownership in the Mt. Kare Property other than through proceeds of liquidation, if any, which might accrue to its benefit. The Company ascribes no value to its rights in the Mt. Kare Property and has written off all related carrying values in its financial statements. MPNG was petitioned into liquidation, a defined legal process under the laws of Papua New Guinea, due to debts incurred while Buffalo controlled MPNG, and accordingly, MPNG is now controlled by the liquidator. The Company does not intend to expend any further funds on the Mt. Kare Property and the Company no longer regards the Mt. Kare project as a property of significance. Lewis Property, Nevada By a series of agreements from 2002 to 2007 the Company holds a 60% 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 remaining 40% interest is held by Americas Bullion Royalty Corp. (“ABRC”) [formerly known as Golden Predator Corporation], a public company whose shares are listed for trading on the Toronto Stock Exchange. On March 21, 2013, ABRC announced it had entered into an option agreement to sell the Company’s 40% joint venture interest in the Lewis Property to Battle Mountain Gold Inc., a private corporation (“BMG”). Closing of this transaction is pending at the date of this report. The Lewis Property is subject to an advance minimum royalty of US$60,000 per year commencing in December 2007 (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 a predecessor owner. These royalties are subject to a purchase provision, initially US$4,000,000 in the year following the exercise of the purchase option in 2007. 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. Accordingly, as at the date of this report the purchase price for these royalties is US$7,000,000. The advance royalty for the first six years has been paid by the Joint Venture in December 2007 through 2012 and the advance royalty for the seventh year has recently been paid, subsequent to the completion of the October 31, 2013 fiscal year. The amount of the payments in the three most recently completed fiscal years as determined pursuant to the escalation clause was US$75,492 in December 2012, US$73,160 in December 2011 and US$70,914 in December 2010 of which the Company’s 60% portion was US$45,295, US$43,896 and US$42,548 respectively. The escalated royalty amount for the current 2013-2014 fiscal year, which was paid in December 2013, was US$76,499 of which the Company’s 60% portion was $US45,899.


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18 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. Since 2005 the Company has been focused primarily on the exploration, and since 2009 principally the retention, of the Lewis Property in Nevada, where exploration had begun in 2002. See “Item 4 - Information on the Company - D. Property, Plants and Equipment” below. This is the only project which the company regards as significant. Prior to 2005, the Company was engaged in the exploration of other mineral properties for which exploration programs were terminated and the carrying values written off. 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 25, 2014:   * While the Company owns 100% of Madison Enterprises (PNG) Limited (“MPNG”), as discussed above under “Mt. Kare Property, Papua New Guinea”, MPNG is in liquidation and accordingly the court-appointed liquidator controls MPNG, the Mt. Kare Property, and MPNG’s subsidiaries Frontier, Oakland and Matu. * * This Panama subsidiary formerly held an interest in the Belencillo project which was sold in fiscal 2012.


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19 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. 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 360 unpatented and 8 patented claims located in Lander County covering some 20 square miles (51.8 sq km or 5,180 hectares) 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 US$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 (subject to a defined annual escalation based on the consumer price index) 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 are subject to a purchase provision for US$4,000,000 in the first 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 December 27th, the 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. During 2007 and 2008 in a stepped transaction GAM became a wholly-owned subsidiary of Golden Predator Corp. In 2013 Golden Predator Corp. changed its name to Americas Bullion Royalty Corp. and subsequently entered into an option agreement to sell its interest to Battle Mountain Gold Inc. (“BMG”), a private company. The closing of this option agreement remains pending at the date of this report. Location, Access & Physiography The Lewis Property consists of a contiguous group of 360 unpatented and 8 patented mining claims comprising approximately 5,498 acres (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 Property is situated approximately 12 miles (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 9 miles (15 kilometres) south from Battle Mountain on State Highway 305 and then west for an additional 5 miles (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 5,000 to 7,875 feet (1,525 to 2,400 metres) above sea level. Vegetation consists of sparse


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20 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. 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 5,000 feet (1,524 metres) 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 1,785 feet (544 metres) quartzite, chert, black shale and volcanic; Member 2 is composed of 3,675 feet (1,120 metres) chert, shale, quartzite and volcanic and Member 3 is composed of 3,000 feet (914 metres) 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 3,000 feet (914 metres) 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 730 feet (222 metres) of conglomerate and sandstone with lessor interbedded shale and limestone of Pennsylvanian age. The middle Antler Peak Formation comprises 200 –1,700 feet (60 – 518 metres) of fossiliferous limestone with subordinate sandy and shaley layers of Late Pennsylvanian and Early Permian age. The upper Edna Mountain Formation comprises 100 – 200 feet (30 – 60 metres) 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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21 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 5,000 feet (1,500 metres) 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 1,272 feet (387 metres) of sandstone, chert, shale and conglomerate; the middle Trenton Canyon member, 1,000 feet (300 metres) of varied colour shale and chert; and the upper Mill Canyon member, 2,385 feet (727 metres) 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. 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.


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22 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 2.3 million ounces (71.5 metric tonnes) gold and 10.8 million ounces (336 metric tonnes) silver. [The remainder of this page has been intentionally left blank. ]


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23


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24 Exploration History (cont’d) In 1986, American Barrick optioned the Lewis Property. During the next three years they conducted geological mapping, geochemistry, and 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 4.9 million ounce (168 metric tonne) 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 (300 metres) 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 (1,778 metres) reverse circulation drilling program on the Lewis Property. This program tested stratigraphic and structural targets along a 400-foot (120 metres) north-south extent of the Virgin Structural Zone, starting 400 feet (120 metres) 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 suggested that the Virgin Structural Zone is open to expansion in every direction. Through 2003, the Company continued to focus its exploration on the Virgin Structural Zone. The Company carried out preliminary structural mapping, geochemical and geophysical (9.03 miles MT-IP or 14.5 kilometres) surveying and drilled 24 holes, totalling 18,050 feet (5,500 metres) on the Virgin Structural Zone for a cumulative total of 33 holes totalling 23,885 feet (7,280 metres). 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.


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25 Drilling has confirmed excellent lateral and vertical continuity of mineralization from surface to a minimum depth of 700 feet (213 metres). The gold-bearing mineralization, at least 1,850 feet (560 metres) in strike extent, takes the form of a continuous sub-vertical, linear body with a series of sub-horizontal, amoeba-shaped zones. 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 9,840 feet (3,000 metres) in length and averaging 130 – 160 feet (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. Exploration – Results 2006 to 2008 From August to November 2006, the Company undertook 49 reverse circulation drill holes totalling 31,690 feet (9,659 metres) and collected 6124 samples for analysis. Seven widely spaced holes totalling 5,400 feet (1,645 metres) tested a 1,800 foot (580 metres) strike extent of the Buena Vista mineral trend. The Buena Vista is a subparallel northwest trending zone of historic mineralization located 1,640 feet (500 metres) 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 (8,013 metres) were drilled as in-fill and step-out holes along a 2,000 foot (600 metres) strike length of the northwest trending Virgin Mineral trend. Hundred-foot (30 metres) in-fill holes have been completed along an 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 and 34 reverse circulation drill holes totalling 31,643 feet (9,645 metres). Ten core holes were drilled to evaluate structure and geology, and to confirm previous RC drill results. Thirty-four reverse circulation holes were drilled as in-fill and step-out holes at 100 foot (30 metres) 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 precious metal mineralization in all the holes and confirming previous RC drill results. In addition the Company carried out an 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 20 lines of IP survey, totaling 57,500 feet (17,526 metres). The 2008 drill program consisted of 17 core holes totalling 12,648 feet (3,855 metres) and 33 reverse circulation holes totalling 18,264 feet (5,567 metres). The program targeted the central portion of the Virgin Zone and included both in-fill and step-out holes using 100 foot (30 metre) drill spacing. A small percentage of core holes used have confirmed previous RC results and the geological and structural models. The drilling expanded the Virgin Zone by 330 feet (100 metres) down-dip over a 1,000 foot (300 metre) strike length. The Virgin Mineralized Zone remains open along strike to the north and south and down-dip to the west and has been defined over a minimum 2,500 foot (750 metre) strike length and now 1,150 feet (350 metres) east-west.


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26 Significant gold and silver results from the 2008 drilling compare favourably with previous reported styles and grades of mineralization including high grade mineralized structural intersections, steeply oriented structural mineralization and sub-horizontal lower grade mineralization hosted by favourable Antler stratigraphy. No significant “on-the-ground” work has been carried out in fiscal 2009 to 2013. During the 2009 to 2013 fiscal years, the joint venture decided to minimize expenditures on the Lewis project, reflecting our uncertainty about market and financing conditions. Notably, however, the Company has expended some $41,200 in December 2010, $44,400 in December 2011 an $44,700 in December 2012 as its portion of advance royalty payments for 2010, 2011 and 2012 respectively, and a further $48,600 in December 2013. Exclusive of the advance royalty, the Company expended approximately $59,000 in fiscal 2011, $37,000 in fiscal 2012 and $74,000 in fiscal 2013 on its 60 per cent portion of JV costs, all as set out in Note 5 of the October 31, 2013 financial statements included with this report. Of these non-royalty amounts expended, the majority was for land and legal costs, principally for claim maintenance and filing fees with government agencies. These expenditures are indicative of the intention of the Company and its joint venture partner to continue with their tenure and development of the Lewis Project. The Company is reviewing data and considering options to move the property forward. In accordance with the Company’s accounting policies, for accounting purposes the Company wrote off the entirety of its carrying costs in respect of the Lewis Property during the fiscal year ended October 31, 2011, in the amount of $7,933,976 resulting in a carrying value of nil thereafter. This decision was triggered principally by the fact that the joint venture had not conducted meaningful on-the-ground exploration programs for the three fiscal years 2009, 2010 and 2011. Mt. Kare Property, Papua New Guinea The Company’s 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 which in turn holds its 10% interest in trust for such traditional landowners. MPNG was formerly held, indirectly through subsidiaries, 60% by Buffalo Gold Ltd. (“Buffalo”) and 40% by the Company, such that those entities came to own an effective 54% and an effective 36% interest in the Mt. Kare Property. The Company subsequently reacquired the interest formerly held by Buffalo at no cost, resulting in the Company once again owning, indirectly through subsidiaries, a 90% interest in the Mt. Kare Property. Due to debts incurred while Buffalo controlled MPNG, MPNG was petitioned into liquidation, a defined legal process under the laws of Papua New Guinea, and accordingly, MPNG is now controlled by the liquidator and no longer consolidated into the Company’s financial statements. The Company does not intend to expend any further funds on the Mt. Kare Property and the Company no longer regards the Mt. Kare project as a property of significance. We do not expect to recover any material amounts from the liquidation of MPNG. Belencillo Property, Panama As set out in Item 4.A above under “Belencillo Property, Panama”,during the 2012 fiscal year the Company sold its interest in the Belencillo Property to an arm’s length entity for 1) 175,438 common shares of that entity valued at $100,000 and 2) a further 250,000 shares of that entity upon the project commencing commercial production. During the same fiscal year the 175,438 shares received as sale proceeds were liquidated for cash proceeds of $67,763 and a loss on disposal of $32,237 was recognized.


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27 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 years ended October 31, 2010, 2011, 2012 and 2013 the Company was primarily engaged in maintaining its tenure of its Lewis Property in Nevada. The Company has no plans to contribute to the funding of any further exploration on the Mt. Kare Property in Papua New Guinea. Operations on the Lewis Property during fiscal 2013 As set out in Note 5 to the Financial Statements, during the fiscal year ended October 31, 2013, the Company incurred, in respect of its 60%, option fees and acquisition and exploration expenditures of $118,956 on the project, comprised of an advance royalty payment of $44,721, assay and related storage costs of $7,495, contractor and geological staff costs of $29,127, and land, legal and insurance costs of $37,613, consisting principally of annual claim maintenance costs paid to government agencies. No direct exploration work was performed on the property in 2013. A series of impairment charges totaling $118,956 was recognized over the course of the 2013 fiscal year. Operations on the Lewis Property during fiscal 2012 As at October 31, 2011, the Company had written off all carrying costs in respect of its 60% interest in the Lewis Property in Nevada. As set out in Note 5 to the Financial Statements, during the fiscal year ended October 31, 2012, the Company incurred, in respect of its 60%, option fees and acquisition and exploration expenditures of $81,010 on the project, comprised of an advance royalty payment of $44,410, assay and related storage costs of $7,435, contractor and geological staff costs of $11,939, and land, legal and insurance costs of $17,226, consisting principally of annual claim maintenance costs paid to government agencies. No direct exploration work was performed on the property in 2012. A series of impairment charges totaling $81,010 was recognized over the course of the 2012 fiscal year. Operations on the Lewis Property during fiscal 2011 As at October 31, 2010, the Company had incurred, in respect of its 60% interest, $7,833,765 in option fees and for acquisition and exploration costs at the Lewis Property in Nevada. As set out in Note 5 to the Financial Statements, during the fiscal year ended October 31, 2011, the Company incurred, in respect of its 60%, option fees and acquisition and exploration expenditures of $100,211 on the project, comprised of an advance royalty payment of $41,169, assay and related storage costs of $7,263, and land, legal and insurance costs of $51,779, consisting principally of annual claim maintenance costs paid to government agencies. No direct exploration work was performed on the property in 2011. In accordance with the Company’s accounting policies, for accounting purposes the Company wrote off the entirety of its carrying costs in respect of the Lewis Property during the fiscal year ended October 31, 2011, in the amount of $7,933,976 resulting in a carrying value of nil thereafter. This decision was triggered principally by the fact that the joint venture had not conducted meaningful in-the-field exploration programs for the three years 2009, 2010 and 2011. Of the $7,933,976 written off, under U.S. generally accepted accounting principles the amount of $6,294,921 had been charged to income in prior years. Fiscal Year Ended October 31, 2013 Compared to Fiscal Year Ended October 31, 2012 During the fiscal year ended October 31, 2013 the Company recorded a foreign exchange gain of $1,887, income from project management fees of $2,659 and interest earned of $404. During the fiscal year ended


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28 October 31, 2012 the Company recorded a non-recurring gain on sale of its Belencillo mineral concession of $100,000, a related non-recurring loss on sale of securities received in that transaction of $32,237, a foreign exchange loss of $1,858, income from project management fees of $1,475 and interest earned of $5,102. None of the fiscal 2013 “other gains” items are in the least material or significant to our operations. The fiscal 2012 mineral concession gain on sale and related loss on sale of marketable securities were non-recurring in that fiscal year. Expenses for the fiscal year ended October 31, 2013 were $396,940, a 21% increase from $328,852 for the fiscal year ended October 31, 2012. The largest cost centre increase was in office and rent costs, arising from an increase in the Company’s portion of certain shared office premises and related costs. Exploration costs also increased, principally attributable to costs of preparing an updated National Instrument 43-101 technical report which is expected to be filed with Canadian securities regulatory authorities in the near future. Fiscal 2013 yielded, based on IFRS-IASB, a net loss for the year of $418,000 or $0.01 loss per share compared to net loss in fiscal 2012 of $256,370, also a $0.01 loss per share. The principal causes of the increased loss were a) the absence of non-recurring revenue from the sale of the Belencillo concession in Panama (together with the related loss on sale of certain marketable securities received as consideration), and b) the increase in expenses described in the preceding paragraph. The Company expects to continue in a net loss position for the fiscal year ending October 31, 2014 due to the nature of its operations as a development stage company. Fiscal Year Ended October 31, 2012 Compared to Fiscal Year Ended October 31, 2011 During the fiscal year ended October 31, 2012 the Company recorded a non-recurring gain on sale of its Belencillo mineral concession of $100,000, a related non-recurring loss on sale of securities received in that transaction of $32,237, a foreign exchange loss of $1,858, income from project management fees of $1,475 and interest earned of $5,102. During the fiscal year ended October 31, 2011 the Company recorded the very material write-off of its mineral property of $7,933,976, a foreign exchange loss of $4,006, income from project management fees of $672 and interest earned of $2,119. The reduction in foreign exchange loss is attributable to holding net U.S. dollar denominated assets during a period when the exchange value of the U.S. dollar has, on balance, strengthened modestly against the Canadian dollar, with considerable month-to-month volatility. Project management fees were very modest, but increased proportional to eligible expenditures on the Lewis project. Interest income increased reflecting modestly larger cash balances available to invest. Expenses for the fiscal year ended October 31, 2012 were $328,852, a 39% increase from $236,911 for the fiscal year ended October 31, 2011. The largest cost centre increase was in exploration costs, arising from the expensing quarter by quarter of exploration costs of the Lewis project representing ongoing impairment of carrying values; these costs had been capitalized in the 2011 fiscal year. Other increases occurred in tax filing costs, salaries, rent and audit and accounting costs, most of which are subject to considerable variances based on levels of corporate activity. The principal cost centre decrease was a reduction in legal costs – an inherently variable category. Fiscal 2012 yielded, based on IFRS-IASB, a net loss for the year of $256,370 or $0.01 loss per share compared to net loss in fiscal 2011 of $8,172,102, or $0.21 loss per share. The overwhelming cause of the decreased loss was the absence of a major write-off of the Company’s accounting values in respect of the Lewis Project, which in fiscal 2011 comprised 97 per cent of the aggregate losses. The Company expects to continue in a net loss position for the fiscal year ending October 31, 2013 due to the nature of its operations as a development stage company.


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29 Management comment 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 producing mineral properties. Readers of this report are directed to the risk factor “Risk of Insolvency” at page 11 above, wherein it is set out that: “At the fiscal year-end the Company had a working capital deficiency (negative working capital) of $345,065. Subsequently, working capital has diminished by outlays for the advance royalty payment set out in Note 5 to the Financial Statements and by normal course operating expenses. This deficiency is mitigated by the fact that, as set out in Note 7 to the Financial Statements, of current liabilities of $466,262 the amount of $388,730 is accrued and owing to related parties. These parties have informally agreed to not seek payment of their amounts due. On this basis, the Company is solvent and able to meet its other obligations as they become due.” Comment on Capital Markets 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, significant doubt could arise about the ability of the Company to continue as a going concern. Over the past 12 months the capital markets for the raising of equity for companies such as Madison have become difficult, with some observers of the opinion that these capital markets are as unreceptive as at any time in the past 30 years or more. The Company’s most recent capital raisings occurred in March and April 2011, as set out in the Consolidated Statements of Changes in Shareholders’ Equity, when we completed two private placement financings for gross and net proceeds of $395,000, augmenting our cash and working capital resources. These resources were further augmented in fiscal 2012 by the net cash proceeds of $67,763 realized on the liquidation of the share consideration received for the Belencillo property sale, as set out in Note 3 to the Financial Statements. Liquidity In the near term, the Company plans to continue its mineral tenure of its currently held properties. See “Item 4 - Information on the Company - D. Property, Plants and Equipment” above. The amounts likely to be expended on the Lewis Gold Project for 2014 are expected to be at a similar modest level as in 2013, reflecting the Company’s current cash resources. The Company will remain watchful about market conditions, and is prepared to alter its plans if evidence so leads it. Based on the Company’s current cash position, and predicated on the continuing willingness of certain related party creditors to defer payment of amounts accrued as payable to them, the Company faces the necessity to find sources of additional financing for its operations during the fiscal year currently in progress. In particular, the Company’s share of annual tenure maintenance costs, expected to be due and payable in August 2014, is budgeted for approximately $50,000. This amount exceeds the Company’s currently budgeted cash resources. 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. At October 31, 2013, the Company had a working capital deficiency (that is, negative working capital) of $345,065. This deficiency is mitigated by management’s expectation that certain related party creditors will continue to defer payment of amounts accrued as payable to them, amounts which are set out in Note 7 to the Financial Statements. Notwithstanding this mitigating item, management does not believe its cash resources or other working capital items will be sufficient to meet the Company’s general and administrative expenses and its share of the cost of the next phase of mineral tenure on its Lewis Property for the current fiscal year in progress.


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30 The October 31, 2013 negative working capital position compares to positive working capital of $43,391 at October 31, 2012. Clearly the Company has continued to draw down its working capital significantly in the 2013 fiscal year recently completed. If the Company is to advance or develop its mineral properties further, or to maintain its general and administrative cost burdens, 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, substantial doubt about the Company’s ability to continue as a going concern exists, and is set out in Note 1 to the Financial Statements. 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 endeavours to source additional equity capital and of its exploration programs on its mineral exploration properties. October 31, 2013 Compared to October 31, 2012 At October 31, 2013, the Company's current assets totalled $121,197 compared to $432,191 at October 31, 2012. The decrease is attributable principally to the drawdowns in cash set out in the Consolidated Statements of Cash Flows and to an increase in the amount receivable from the joint venture partner (which amount has been subsequently collected). During the fiscal year, total liabilities increased to $466,262 from $388,800. Eighty-seven percent of this increase, the amount of $67,520, was the increase in the accrual of unpaid executive management salaries to a senior officer and of unpaid professional fees to a professional firm controlled by a director. As a result of these factors, the Company had a working capital deficiency (that is, negative working capital) of $345,065 at October 31, 2013 compared to positive working capital of $43,391 at October 31, 2012. The Company had no long-term debt at either October 31, 2013 or October 31, 2012. At October 31, 2013, the Company had total assets of $130,480 compared to $449,343 at October 31, 2012. This decrease is principally attributable to net losses of $418,000 offset in part by the increase in accounts payable and accrued liabilities described in the preceding paragraph. Share capital as at October 31, 2013 was $68,673,644, unchanged from the prior year. The Company's largest cash outflows in the fiscal year ended October 31, 2013 were to fund its operating activities in the amount of $299,066. We also drew down cash by making net cash advances on behalf of our joint venture partner. Those advances have subsequently been recovered. The Company's largest cash outflows in the prior fiscal year ended October 31, 2012 were to fund its operating activities in the amount of $128,328. The largest cash inflow was the net proceeds on the sale of the shares received as consideration for the sale of the Belencillo property interest – which was a non-recurring item. October 31, 2012 Compared to October 31, 2011 At October 31, 2012, the Company's current assets totalled $432,191 compared to $573,194 at October 31, 2011. The decrease is attributable principally to the drawdowns in cash set out in the Consolidated Statements of Cash Flows and to a reduction in receivables on the receipt of commodity tax refunds. During the fiscal year, total liabilities increased to $388,800 from $282,040. The principal component of this increase was an accrual of unpaid executive management salaries to a senior officer and of unpaid professional fees to a professional firm controlled by a director. As a result of these factors, the Company had working capital of $43,391 at October 31, 2012 compared to $291,154 at October 31, 2011. The Company had no long-term debt at either October 31, 2012 or October 31, 2011.


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31 At October 31, 2012, the Company had total assets of $449,343 compared to $603,288 at October 31, 2011. This decrease is principally attributable to net losses of $256,370 offset in part by the increase in accounts payable and accrued liabilities described in the preceding paragraph.. Share capital as at October 31, 2012 was $68,673,644, unchanged from the prior year. The Company's largest cash outflows in the fiscal year ended October 31, 2012 were to fund its operating activities in the amount of $128,328. The largest cash inflow was the net proceeds on the sale of the shares received as consideration for the sale of the Belencillo property interest – which is of a non-recurring nature. For the prior year ended October 31, 2011 expenditures on projects, virtually entirely on the Lewis project, were $107,561 and to fund operating activities were $129,940 – virtually the same as in fiscal 2012. October 31, 2011 Compared to November 1, 2010 At October 31, 2011, the Company's current assets totalled $573,194 compared to $405,451 at November 1, 2010. The increase is attributable principally to the two private placement financings carried out in March and April 2011 as set out in the Consolidated Statements of Changes in Shareholders’ Equity, and to drawdowns in the Company’s cash position from operating activities and from investing activities as set out in the Statement of Cash Flows. During the fiscal year, total liabilities increased to $282,040 from $180,235. The principal component of this increase was an accrual of unpaid executive management salaries to a senior officer and of unpaid professional fees to a professional firm controlled by a director. As a result of these factors, the Company had working capital of $291,154 at October 31, 2011 compared to $225,216 at October 31, 2010. The Company had no long-term debt at either October 31, 2011 or October 31, 2010. At October 31, 2011, the Company had total assets of $603,288 compared to $8,287,255 at October 31, 2010. This decrease is principally attributable to the writedown of the carrying costs of the Lewis Project set out in the Statement of Loss and Comprehensive Loss and the expenditures on the Lewis Project set out in Note 5. Share capital as at October 31, 2010 was $68,673,644, an increase of $395,000 from the prior year arising from the private placement financings set out in the Consolidated Statements of Changes in Shareholders’ Equity. The Company's largest cash outflows in the fiscal year ended October 31, 2011 were to fund its operating activities in the amount of $129,940 and expenditures on the Lewis Property, Nevada of $107,561. Outlook For the remainder of the fiscal year currently in progress and ending October 31, 2014, the Company’s activities are likely to be limited, to conform to funds available. The technical focus will continue to be the Lewis Property. Based on existing cash, and subject to the continuing willingness of certain related party creditors to defer payment of amounts accrued as payable to them, the Company will nonetheless require additional financing during the current 2014 fiscal year. The Company has no material commitments for capital expenditures for the 2014 fiscal year. In December 2013 the joint venture made the advance royalty payment due at that time for the year 2014 on the Lewis project in the amount of US$76,499 of which the Company’s 60% share was US$45,899. It is the current plan of the joint venture to make a similar advance royalty payment in December 2014; however, the Company’s current cash resources are not sufficient to make such a payment at that time. B.

   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.


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32 C.

   Trend Information
 Readers of this report are referred to the disclosure on page 28 above in “Comment on Capital Markets” for a discussion of current difficult conditions in the capital markets. D.

   Off-Balance Sheet Arrangements
 The Company has no off-balance sheet arrangements. E.

   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 35 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 35 years. Mr. Brown is 66 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 worked as an editor for The Northern Minerfrom 1994 to 2001. Ms. Danielson is 62 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 which discovered the Hemlo gold deposits in Northern Ontario. Ms. Dragovan is 64 years old and is the spouse of Mr. Idziszek. Chet Idziszek Mr. Idziszek is President and CEO and a director of the Company. Mr. Idziszek holds a Master of Applied Sciences degree from McGill University and has worked as an exploration geologist and exploration executive with numerous international mining companies for over 40 years. He has been recognized by his industry peers for his central role in the discovery and development of the Eskay Creek gold deposit in Canada, being designated “Mining Man of the Year” in 1990 and “Prospector of the Year” in 1994. He has also been recognized for his leadership of Adrian Resources Ltd. during its exploration and development of the Petaquilla copper-gold-molybdenum deposits in Panama. He was a director of Arequipa Resources Ltd. which discovered the Pierina gold deposit subsequently acquired by Barrick Gold Corp. in 1996 for USD $790 million. Since 2005 his principal focus has been Oromin Explorations Ltd. and its joint venture on the OJVG Gold Project in eastern Sénégal. This project reached the positive feasibility stage in 2010 and subsequently to date has established 3.78 million ounces of gold in indicated resources and 0.96 million ounces in inferred resources with ongoing and widespread scope for expansion. On October 4, 2013, Teranga Gold Corporation completed the acquisition of all the issued and outstanding shares of Oromin Explorations Ltd. by way of a plan of arrangement. Mr. Idziszek is 66 years old and is the spouse of Ms. Dragovan.


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33 Robert Sibthorpe Mr. Sibthorpe is a director of the Company. He holds a B.Sc. in geology and an M.B.A. from the University of Toronto. Mr. Sibthorpe worked as a mining analyst and director of Yorkton Securities Inc. in Vancouver from 1986 to 1996 and 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 and executive of mining exploration companies. Mr. Sibthorpe is 65 years old. James G. Stewart Mr. Stewart is a director and the Secretary of the Company. He holds a law degree and worked as a lawyer both in private practice and as corporate counsel from 1984 to 2013 and has extensive experience in the fields of mining, corporate finance and securities law. Mr. Stewart is 55 years old. B.

   Compensation
 During the fiscal year ended October 31, 2013, the Company paid or accrued $76,440 by way of salary and benefits for management duties carried out by director and CEO Mr. Idziszek, accrued $12,000 by way of directors’ fees to Ms. Danielson and Mr. Sibthorpe as to $6,000 each, and paid or accrued $5,500 for legal and associated fees to a law practice controlled by director James G. Stewart. There were no incentive stock options granted to or exercised by such directors and officers or other non-cash compensation. No other funds were set aside or accrued by the Company during the fiscal year ended October 31, 2013 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 amount of $52,020 of the salary amount for the CEO and the amount of $3,500 in respect of legal fees were accrued during the year rather than paid in cash, and are in accounts payable at the year end date and at the date of this annual report. An additional $206,110 for salary to Mr. Idziszek and $93,100 for professional fees to Mr. Stewart in respect of prior fiscal years is also accrued and in accounts payable at the year end date. Option Grants in Last Fiscal Year There were no stock options granted to the Company’s officers or directors during the fiscal year ended October 31, 2013. 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. 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 interim and 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 shall 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.


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34 D.

   Employees
 During the fiscal year ended October 31, 2013, the Company had eight employees, all of whom worked at the Company’s head office. Of the eight employees, three worked in management roles, three in administrative roles, and two in accounting. Mineral exploration work was carried out by contract staff. During the fiscal years ended October 31, 2012 and 2011, the Company had the same eight employees, engaged in the same roles. Mineral exploration work was carried out by contract staff. None of the Company’s employees were casual or temporary employees. Subsequent to the fiscal year-end, staff levels have been reduced to four employees: two in management roles and one each in an administrative and an accounting role. 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: Number of

   Number of OptionsCommon Shares

   or Warrants

   BeneficialHeld at

   Outstanding at

   Percentage

   ExerciseName

   February 13, 2014

   February 13, 2014

   Ownership1

   Price

   Expiry DateIan Brown

   Nil

   Nil

   Nil%

   NA

   NAVivian Danielson

   15,000

   Nil

   0.04%

   NA

   NANell Dragovan

   1,388,718

   Nil

   3.39%

   NA

   NAChet Idziszek

   1,522,928

   Nil

   3.72%

   NA

   NARobert Sibthorpe

   175,000

   Nil

   0.43%

   NA

   NAJ.G. Stewart

   568,929

   Nil

   1.39%

   NA

   NATotal:

   3,670,575

   Nil

   8.97%
 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 13, 2014, 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 40,906,727 Common Shares outstanding as of February 13, 2014. 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, there are no stock options outstanding and there are 4,090,672 shares reserved for issuance under the Plan. ITEM 7.

   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
  A.

   Major Shareholders
 As at October 31, 2013 and February 13, 2014 Pinetree Capital Ltd. (“Pinetree”) held 5,313,000 or 12.99% of the Company’s common shares. At October 31, 2012 and 2011 Pinetree held 5,250,000 or 12.83% of the Company’s common shares. At October 31, 2010 Pinetree held 4,233,000 or 11.32% of the Company’s common shares.


---

35 Based on the records of the Company’s registrar and transfer agent, Computershare Investor Services Inc., of 3rdFloor, 510 Burrard Street, Vancouver, British Columbia, Canada, as at February 13, 2014 there were 40,906,727 common shares of the Company issued and outstanding. At such date there were 192 registered holders of the Company’s common shares resident in the United States, holding an aggregate 3,171,056 common shares, including 2,884,869 shares held by Cede & Co. This number represents approximately 7.75% of the total issued and outstanding common shares of the Company as at February 13, 2014. 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 23, 2014 there were 1,121 beneficial holders, holding an aggregate 9,230,242 common shares. This number represents approximately 22.56% of the total issued and outstanding common shares of the Company as at February 13, 2014. Including the 2,884,869 shares held by Cede & Co. the total number of registered and beneficial holders of the Company’s common shares resident in the United States, therefore, is 1,313 holders, holding an aggregate 12,401,298 common shares. This number represents approximately 30.32% of the total issued and outstanding common shares of the Company as at February 13, 2014. B.

   Related Party Transactions
 There were no material transactions in the fiscal year ended October 31, 2013, 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 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 section. 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, 2013 which contain an Independent Auditor’s Report dated February 25, 2014, Consolidated Statements of Financial Position as at October 31, 2013 and 2012, Consolidated Statements of Loss and Comprehensive Loss for the Fiscal Years Ended October 31, 2013, 2012 and 2011, Consolidated Statements of Changes in Shareholders’ Equity for the Fiscal Years Ended October 31, 2013, 2012 and 2011, Consolidated Statements of Cash Flows for the Fiscal Years Ended October 31, 2013, 2012 and 2011, and Notes to the Consolidated Financial Statements. B.

   Significant Changes
 No significant changes have occurred since the date of the annual financial statements included in this


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36 Annual Report on Form 20-F. 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

   LowFiscal Year 2013-2014January 2014

   $0.03

   $0.03December 2013

   $0.05

   $0.03November

   $0.05

   $0.03October

   $0.04

   $0.03September

   $0.06

   $0.04August

   $0.07

   $0.03First Quarter to January 31, 2014

   $0.05

   $0.032013

   $0.08

   $0.03Fourth Quarter

   $0.07

   $0.03Third Quarter

   $0.08

   $0.03Second Quarter

   $0.05

   $0.03First Quarter

   $0.06

   $0.042012

   $0.14

   $0.04Fourth Quarter

   $0.08

   $0.04Third Quarter

   $0.12

   $0.06Second Quarter

   $0.14

   $0.09First Quarter

   $0.11

   $0.062011

   $0.22

   $0.072010

   $0.21

   $0.082009

   $0.19

   $0.06
 The closing price of the Company's common shares on the TSX Venture Exchange on February 24, 2014 was $0.03. The high and low sale prices for the common shares of the Company on the Over The Counter Bulletin Board (“OTCBB”) 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: High

   LowFiscal Year 2013-2014January 2014

   US$0.05

   US$0.02December 2013

   US$0.05

   US$0.02November

   US$0.05

   US$0.02October

   US$0.04

   US$0.02September

   US$0.06

   US$0.03August

   US$0.09

   US$0.02First Quarter to January 31, 2014

   US$0.05

   US$0.022013

   US$0.09

   US$0.02Fourth Quarter

   US$0.09

   US$0.02Third Quarter

   US$0.08

   US$0.02Second Quarter

   US$0.08

   US$0.02First Quarter

   US$0.07

   US$0.03
       37 High

   Low2012

   US$0.13

   US$0.05Fourth Quarter

   US$0.06

   US$0.05Third Quarter

   US$0.08

   US$0.05Second Quarter

   US$0.13

   US$0.08First Quarter

   US$0.11

   US$0.052011

   US$0.21

   US$0.062010

   US$0.20

   US$0.062009

   US$0.23

   US$0.03
 The latest closing price of the Company's common shares on the OTCBB on February 24, 2014 was US$0.03. B.

   Plan of Distribution
 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 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 OTCBB since February 25, 1997. D.

   Selling Stockholders
 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 section. E.

   Dilution
 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 section. F.

   Expenses of the Issue
 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 section. ITEM 10.

   ADDITIONAL INFORMATION
  A.

   Share Capital
 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 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 Actto the Act on October 26, 2004. The Company is not limited in its objects and purposes.
      38 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. 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
      39 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, 2008. 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, 2008. 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, 2008.
      40 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 in 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. 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
      41 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; and2.

   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; and5.

   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
      42 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. 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
      43 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 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.
      44 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. 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
      45 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. 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.
      46 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%). 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
      47 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. 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.
      48 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 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 section. G.

   Statements by Experts
 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 section. H.

   Documents on Display
 Any documents referred to in this Annual Report may be inspected at the head office of the Company, Suite 300, 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 is a small business issuer as defined in Form 20-F and is not required to provide this disclosure. PART II ITEM 12.

   DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
 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 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.
      49 ITEM 14.

   MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
 Effective March 5, 2008 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, 2008. 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 9, 2008. Unless they are redeemed earlier, the rights will expire ten years from March 5, 2008. ITEM 15.

   CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company is collected and communicated to management, as appropriate, to allow timely decisions regarding required disclosure. At the end of the period covered by this report, the fiscal year ended October 31, 2013, an evaluation was carried out under the supervision of, and with the participation of, the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures as defined in Rule 13a – 15(e) and Rule 15d –15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are adequately designed and effective in ensuring that the information required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission rules and forms. Management’s Report on Internal Control over Financial Reporting (“ICFR”) Management is responsible to the Board of Directors for the preparation of financial statements of the Company. These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS-IASB), and necessarily include some amounts based on estimates and judgments. The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s management has employed a framework consistent with Exchange Act Rule 13a-15(c), to evaluate the
      50 Company’s internal control over financial reporting described below. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles. Management conducted an evaluation of the design and operation of the Company’s internal control over financial reporting as of October 31, 2013, based on the criteria set forth in Internal Control – Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. This evaluation included the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on this assessment, the CEO and CFO have determined that the Company’s internal control over financial reporting is effective as at October 31, 2012, at a reasonable assurance level, to ensure that material information regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. In connection with this assessment, no material weaknesses in the Company’s internal control over financial reporting were identified by management. Our report herein was not subject to attestation by our registered public accounting firm pursuant to 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 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
 The aggregate fees billed in the fiscal year ended October 31, 2013 by Davidson & Company, the Company’s principal accountants are: Type of Fees

   Amount Paid

   Percentage of ServicesAudit fees

   $35,700

   88%Audit-related fees

   -

   -Tax fees

   $5,000

   12%
      51 All other fees

   -

   -Total fees

   $40,700

   100%
 These amounts related to work done for the fiscal year ended October 31, 2012. The aggregate fees billed in the fiscal year ended October 31, 2012 by Davidson & Company, the Company’s principal accountants are: Type of Fees

   Amount Paid

   Percentage of ServicesAudit fees

   $40,800

   89%Audit-related fees

   -

   -Tax fees

   $5,000

   11%All other fees

   -

   -Total fees

   $45,800

   100%
 These amounts related to work done for the fiscal year ended October 31, 2011. The Company has made an accrual of $35,000 for combined audit fees and tax fees for the fiscal year ended October 31, 2013. 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, 2013, which is the period covered by this Annual Report on Form 20-F. 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, 2013, which is the period covered by this Annual Report on Form 20-F. PART III ITEM 17.

   FINANCIAL STATEMENTS
 Not applicable
      52 ITEM 18.

   FINANCIAL STATEMENTS
 See the Financial Statements and Exhibits listed in Item 19 hereof and filed as part of this Annual Report. These financial statements were prepared in accordance with IFRS as issued by the IASB and are expressed in Canadian dollars. For a history of exchange rates in effect for Canadian dollars as against U.S. dollars, see page 11 of this Annual Report. ITEM 19.

   EXHIBITS
  (a)

   Financial Statements
  Description of Document

   Page No.Cover Sheet

   F-1Auditors’ Report dated February 25, 2014

   F-2Consolidated Statements of Financial Position as at October 31, 2013 and 2012

   F-4Consolidated Statements of Comprehensive Loss for the Years Ended October 31, 2013, 2012 and 2011

   F-5Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended October 31, 2013, 2012 and 2011

   F-6Consolidated Statements of Cash Flows for the Years Ended October 31, 2013, 2012 and 2011

   F-7Notes to the Consolidated Financial Statements

   F-8
  (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 MiningPty. 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 CarpenterPacific Resources NL
      53 Exhibit Number

   Description of Document

   Page No.*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*4.O

   Shareholder Rights Plan Agreement dated March 5, 2008, between Madison Minerals Inc. and Pacific Corporate Trust Company (now Computershare Investor Services Inc.)*4.P

   Madison Minerals Inc. Stock Option Plan dated April 9, 2008*4.Q

   Madison Minerals Inc. Share Compensation Plan dated April 9, 2008*5.A.

   Madison Minerals Inc. Stock Option Plan dated April 9, 2008 (amended March 1, 2011)*6.A.

   Option Termination Agreement – The Belencillo Concession, dated March 1, 201212.1

   Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)

   E-12.112.2

   Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)

   E-12.213.1

   Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b)

   E-13.113.2

   Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b)

   E-13.2*

   These exhibits were previously filed with the Company’s Registration Statement or a previous Annual Report on Form 20-F (file no. 0-29250).
      54 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 25thday of February, 2014 MADISON MINERALS INC. “Chet Idziszek” Per: (signed) Chet IdziszekTitle: President
      55 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
      56 Exhibit Number

   Description of Document

   Page No.*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*4.O

   Shareholder Rights Plan Agreement dated March 5, 2008, between Madison Minerals Inc. and Pacific Corporate Trust Company (now Computershare Investor Services Inc.)*4.P

   Madison Minerals Inc. Stock Option Plan dated April 9, 2008*4.Q

   Madison Minerals Inc. Share Compensation Plan dated April 9, 2008*5.A.

   Madison Minerals Inc. Stock Option Plan dated April 9, 2008 (amended March 1, 2011)*6.A

   Option Termination Agreement – The Belencillo Concession, dated March 1, 201212.1

   Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)

   E-12.112.2

   Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)

   E-12.213.1

   Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b)

   E-13.113.2

   Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b)

   E-13.2*

   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. Consolidated Financial Statements October 31, 2013 Expressed in Canadian Dollars F-1
      INDEPENDENT AUDITORS' REPORT To the Shareholders of Madison Minerals Inc. We have audited the accompanying consolidated financial statements of Madison Minerals Inc., which comprise the consolidated statements of financial position as at October 31, 2013 and 2012, and the consolidated statements of comprehensive loss, changes in shareholders’ equity and cash flows for the years ended October 31, 2013, 2012 and 2011 and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.  F-2
      Opinion In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Madison Minerals Inc. as at October 31, 2013 and 2012 and its financial performance and its cash flows for the years ended October 31, 2013, 2012 and 2011, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Emphasis of Matter The accompanying consolidated financial statements have been prepared assuming that Madison Minerals Inc. will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has no current source of revenue. These conditions, along with other matters as set forth in Note 1, indicate substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. “DAVIDSON & COMPANY LLP”Vancouver, Canada

   Chartered AccountantsFebruary 25, 2014
 F-3
      MADISON MINERALS INC.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(Expressed in Canadian Dollars, unless otherwise stated)As at
  October 31,

   

   

   

   October 31,2013

   

   

   

   2012ASSETSCurrent AssetsCash

   $

   85,940

   

   

   $

   403,852Marketable securities (Note 3)

   

   2,890

   

   

   

   7,225Receivable from joint venture partner (Note 5)

   

   29,554

   

   

   

   10,708Receivables

   

   2,813

   

   

   

   6,549Deposits and prepaid expenses

   

   -

   

   

   

   3,857Total current assets

   

   121,197

   

   

   

   432,191Non-Current AssetsProperty and equipment (Note 4)

   

   -

   

   

   

   7,869Reclamation deposits

   

   9,283

   

   

   

   9,283Exploration and evaluation assets (Note 5)

   

   -

   

   

   

   -Total non-current assets

   

   9,283

   

   

   

   17,152Total Assets

   $

   130,480

   

   

   $

   449,343LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent LiabilitiesTrade and other payables

   $

   466,262

   

   

   $

   388,800Shareholders’ EquityShare capital (Note 6)

   

   68,673,644

   

   

   

   68,673,644Reserves

   

   3,658,614

   

   

   

   3,636,939Deficit

   

   (72,668,040

   )

   

   

   (72,250,040

   )Total shareholders’ equity (deficiency)

   

   (335,782

   )

   

   

   60,543Total Liabilities and Shareholders’ Equity

   $

   130,480

   

   

   $

   449,343
 Nature and continuance of operations (Note 1) Commitments (Note 9) The accompanying notes are an integral part of these consolidated financial statements. These consolidated financial statements are authorized for issue by the Board of Directors on February 25, 2014. “Chet Idziszek”

   “Vivian Danielson”Director

   Director
 F-4
      MADISON MINERALS INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2013

   

   

   

   2012

   

   

   

   2011EXPENSESAccounting and audit

   $

   52,445

   

   

   $

   54,625

   

   

   $

   46,983Amortization (Note 4)

   

   7,869

   

   

   

   12,942

   

   

   

   12,942Exploration expenditures (Note 5)

   

   118,956

   

   

   

   81,010

   

   

   

   18,554Filing fees

   

   11,228

   

   

   

   11,647

   

   

   

   15,287Insurance

   

   7,905

   

   

   

   8,285

   

   

   

   7,500Legal fees

   

   14,273

   

   

   

   20,249

   

   

   

   34,990Office and rent

   

   73,043

   

   

   

   12,490

   

   

   

   2,083Public relations

   

   4,317

   

   

   

   1,445

   

   

   

   1,865Salaries and benefits

   

   96,518

   

   

   

   95,465

   

   

   

   84,949Tax filing fees

   

   -

   

   

   

   19,655

   

   

   

   -Transfer agent fees

   

   10,386

   

   

   

   11,039

   

   

   

   11,758(396,940

   )

   

   

   (328,852

   )

   

   

   (236,911

   )OTHER INCOME (EXPENSES)Foreign exchange gain (loss)

   

   1,887

   

   

   

   (1,858

   )

   

   

   (4,006

   )Gain on sale of mineral concession (Note 5)

   

   -

   

   

   

   100,000

   

   

   

   -Interest earned

   

   404

   

   

   

   5,102

   

   

   

   2,119Loss on sale of marketable securities (Note 3)

   

   -

   

   

   

   (32,237

   )

   

   

   -Project management fees

   

   2,659

   

   

   

   1,475

   

   

   

   672Write-down of exploration and evaluation assets (Note 5)

   

   -

   

   

   

   -

   

   

   

   (7,933,976

   )Write-down of marketable securities (Note 3)

   

   (26,010

   )

   

   

   -

   

   

   

   -(21,060

   )

   

   

   72,482

   

   

   

   (7,935,191

   )Loss for the year

   

   (418,000

   )

   

   

   (256,370

   )

   

   

   (8,172,102

   )Other comprehensive lossUnrealized loss on marketable securities (Note 3)

   

   -

   

   

   

   (4,335

   )

   

   

   (8,670

   )Reclassification on write down of marketable securities

   

   21,675

   

   

   

   -

   

   

   

   -Total comprehensive loss for the year

   $

   (396,325

   )

   

   $

   (260,705

   )

   

   $

   (8,180,772

   )Basic and diluted loss per common share

   $

   (0.01

   )

   

   $

   (0.01

   )

   

   $

   (0.21

   )Weighted average number of common shares outstanding

   

   40,906,727

   

   

   

   40,906,727

   

   

   

   39,487,549
 The accompanying notes are an integral part of these consolidated financial statements. F-5
      MADISON MINERALS INC.CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  Share capital

   

   

   

   Reserves

   

   

   

   

   

   Total share-Number of

   

   

   

   

   

   Share-based

   

   Investment

   

   

   

   

   

   holders’shares

   

   Amount

   

   

   

   payments

   

   revaluation

   

   

   Deficit

   

   

   equityBalance at October 31, 2010

   37,406,727

   $

   68,278,644

   

   

   $

   3,658,614

   $

   (8,670

   )

   $

   (63,821,568

   )

   $

   8,107,020Shares issued on prospectus offering

   3,500,000

   

   395,000

   

   

   

   -

   

   -

   

   

   -

   

   

   395,000Total comprehensive loss for the year

   -

   

   -

   

   

   

   -

   

   (8,670

   )

   

   (8,172,102

   )

   

   (8,180,772

   )Balance at October 31, 2011

   40,906,727

   $

   68,673,644

   

   

   $

   3,658,614

   $

   (17,340

   )

   $

   (71,993,670

   )

   $

   321,248Balance at October 31, 2011

   40,906,727

   $

   68,673,644

   

   

   $

   3,658,614

   $

   (17,340

   )

   $

   (71,993,670

   )

   $

   321,248Total comprehensive loss for the year

   -

   

   -

   

   

   

   -

   

   (4,335

   )

   

   (256,370

   )

   

   (260,705

   )Balance at October 31, 2012

   40,906,727

   $

   68,673,644

   

   

   $

   3,658,614

   $

   (21,675

   )

   $

   (72,250,040

   )

   $

   60,543Balance at October 31, 2012

   40,906,727

   $

   68,673,644

   

   

   $

   3,658,614

   $

   (21,675

   )

   $

   (72,250,040

   )

   $

   60,543Total comprehensive loss for the year

   -

   

   -

   

   

   

   -

   

   21,675

   

   

   (418,000

   )

   

   (396,325

   )Balance at October 31, 2013

   40,906,727

   $

   68,673,644

   

   

   $

   3,658,614

   $

   -

   

   $

   (72,668,040

   )

   $

   (335,782

   )
 The accompanying notes are an integral part of these consolidated financial statements F-6
      MADISON MINERALS INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2013

   

   

   

   2012

   

   

   

   2011CASH FLOWS FROM OPERATING ACTIVITIESLoss for the year

   $

   (418,000

   )

   

   $

   (256,370

   )

   

   $

   (8,172,102

   )Items not affecting cash:Amortization

   

   7,869

   

   

   

   12,942

   

   

   

   12,942Gain on sale of mineral concession

   

   -

   

   

   

   (100,000

   )

   

   

   -Loss on sale of marketable securities

   

   -

   

   

   

   32,237

   

   

   

   -Write-down of exploration and evaluation assets

   

   -

   

   

   

   -

   

   

   

   7,933,976Write-down of marketable securities

   

   26,010

   

   

   

   -

   

   

   

   -Changes in non-cash working capital items:Receivables

   

   3,736

   

   

   

   70,478

   

   

   

   (13,911

   )Deposits and prepaid expenses

   

   3,857

   

   

   

   5,625

   

   

   

   -Trade and other payables

   

   77,462

   

   

   

   106,760

   

   

   

   109,155Net cash used in operating activities

   

   (299,066

   )

   

   

   (128,328

   )

   

   

   (129,940

   )CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of marketable securities (Note 3)

   

   -

   

   

   

   67,763

   

   

   

   -Expenditures on exploration and evaluation assets

   

   -

   

   

   

   -

   

   

   

   (107,561

   )Reclamation deposits

   

   -

   

   

   

   -

   

   

   

   5,003Net cash provided by (used in) investing activities

   

   -

   

   

   

   67,763

   

   

   

   (102,558

   )CASH FLOWS FROM FINANCING ACTIVITIESReceivable from joint venture partner

   

   (18,846

   )

   

   

   (8,528

   )

   

   

   3,387Issuance of share capital

   

   -

   

   

   

   -

   

   

   

   395,000Net cash provided by (used in) financing activities

   

   (18,846

   )

   

   

   (8,528

   )

   

   

   398,387Change in cash

   

   (317,912

   )

   

   

   (69,093

   )

   

   

   165,889Cash, beginning of year

   

   403,852

   

   

   

   472,945

   

   

   

   307,056Cash, end of year

   $

   85,940

   

   

   $

   403,852

   

   

   $

   472,945
 Supplemental disclosure with respect to cash flows (Note 12) The accompanying notes are an integral part of these consolidated financial statements. F-7
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  1.

   NATURE AND CONTINUANCE OF OPERATIONS
 Madison Minerals Inc. (the “Company”) was incorporated under the provisions of the Company Act of British Columbia and is in the process of exploring its exploration and evaluation assets and has not determined whether these assets 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 address of the Company’s corporate office and principal place of business is Suite 2000, Guinness Tower, 1055 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2E9. 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. These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has a history of losses and no source of revenue. The continuing operations of the Company are dependent upon its ability to continue to raise adequate funding and to commence profitable operations in the near future. These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern. Management has undertaken available cost cutting measures and is monitoring the Company’s cash flow. Until such time as the Company may decide to raise, and succeed in raising, additional equity capital it intends to restrict its cash operating costs and investment in exploration and evaluation assets to a low level, conforming to funds available. As at October 31

   

   2013

   

   

   2012Working Capital (Deficiency)

   $

   (345,065

   )

   $

   43,391Deficit

   $

   (72,668,040

   )

   $

   (72,250,040

   )
 Current assets amounted to $121,197 with current liabilities of $466,262 resulting in a working capital deficiency of $345,065. 2.

   SIGNIFICANT ACCOUNTING POLICIES
  A.

   Statement of compliance and conversion to International Financing Reporting Standards
 The consolidated financial statements have been prepared in accordance with International Accounting Standard 1, Presentation of Financial Statements (“IAS 1”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). F-8
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  B.

   Basis of preparation
 These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as financial assets or financial liabilities at fair value through profit and loss and available–for-sale financial assets, which are measured at fair value, as explained in the accounting policies note set out below. The comparative figures presented in the consolidated financial statements are in accordance with IFRS. The policies applied in these consolidated financial statements are based on IFRS issued and outstanding as of the date the statements were issued. The accounting policies set out below have been applied consistently to all years presented and have been applied consistently by the Company and its subsidiaries. C.

   Basis of consolidation
 These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Madison Enterprises (Latin America) S.A., a Panamanian corporation, Madison Enterprises (Nevada) Inc., a U.S. corporation, and Madison Enterprises (BVI) Inc., a British Virgin Islands corporation. All significant inter-company transactions and balances have been eliminated upon consolidation. D.

   Functional currency
 Items included in the financial statements of each of the entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional and presentation currency of the Company and its subsidiaries is the Canadian dollar. Transactions in foreign currencies are translated to the functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date and non-monetary assets and liabilities are translated at historical rates. Foreign currency gains and losses arising from translation are included in profit or loss. E.

   Financial assets and liabilities
 The Company classifies its financial instruments in the following categories: financial assets at fair value through profit or loss, loans and receivables, available for sale financial assets, financial liabilities at fair value through profit or loss, and other financial liabilities at amortized cost. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. Financial assets at fair value through profit or loss (“FVTPL”) The Company’s financial assets at FVTPL comprise cash. A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated as at FVTPL if the Company manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Company’s risk management strategy. Attributable transaction costs are recognized in the consolidated statement of comprehensive loss when incurred. FVTPL are measured at fair value, and changes are recognized in the consolidated statement of comprehensive loss. F-9
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  E.

   Financial assets and liabilities(continued)
 Available-for-sale financial assets The Company’s investments in marketable securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than temporary impairment losses, are recognized in other comprehensive income or loss and presented in the investment revaluation reserve in shareholders’ equity. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognized in the investment revaluation reserve is included in profit or loss. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Company’s loans and receivables comprise of receivable from joint venture partner and receivables. Loans and receivables are measured at amortized cost using the effective interest method, less any impairment. Financial liabilities at fair value through profit or loss This category comprises of derivatives, or liabilities acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the consolidated statement of financial position at fair value with the changes in fair value recognized in the consolidated statement of comprehensive income or loss. Other financial liabilities at amortized cost The Company’s trade and other payables are classified as other financial liabilities at amortized cost and are initially measured at fair value and subsequently measured at amortized cost. Transaction costs incurred upon the issuance of debt instruments or modification of a financial liability are deducted from the financial liability and are amortized using the effective interest method over the expected life of the related liability. Impairment of financial instruments Financial assets or a group of financial assets are assessed for indicators of impairment at each statement of financial position reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. Objective evidence of impairment could include: significant financial difficulty of the issuer or counterparty; ordefault or delinquency in interest or principal payments; orit becoming probable that the borrower will enter bankruptcy or financial re-organization. For loans and receivables carried at amortized cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced by the impairment loss through the use of a provision account. Subsequent recoveries of amounts previously written off are credited against the provision account. Changes in the carrying amount of the provision account are recognized in profit or loss. F-10
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  E.

   Financial assets and liabilities(continued)
 Impairment of financial instruments (continued) With the exception of available-for-sale financial assets, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of available-for-sale financial assets, impairment losses previously recognized through profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized directly in shareholders’ equity. The Company does not have any derivative financial instruments. F.

   Exploration and evaluation assets
 Exploration and evaluation expenditures in relation to each separate area of interest are recognized as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: the rights to tenure of the area of interest are current; andat least one of the following conditions is also met:the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; orexploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are initially measured at cost and are capitalized by property. If economically recoverable ore reserves are developed, capitalized costs of the related property are reclassified as mine development and amortized using the unit of production method. When a property is abandoned, all related costs are written off to operations. The amounts shown for exploration and evaluation assets 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. G.

   Property and equipment
 Property and equipment (“PE”) are carried at cost, less accumulated amortization and accumulated impairment losses. The cost of an item of PE consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. F-11
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  G.

   Property and equipment (continued)
 Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of comprehensive income or loss during the financial period in which they are incurred. Amortization is calculated at the following rates: Leasehold improvements

   Straight line over life of leaseFurniture and fixtures

   Straight line over five yearsComputer equipment

   Straight line over five yearsOffice equipment

   Straight line over five years
 An item of PE is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in the consolidated statement of comprehensive income or loss. H.

   Restoration and rehabilitation provision
 A provision for restoration and rehabilitation is recognized when there is a present legal or constructive obligation; as a result of exploration, development, or production activities undertaken; it is probable that an outflow of economic benefits will be required to settle the obligation; and the amount of the provision can be measured reliably. The estimated future obligations include the costs of removing facilities, abandoning sites and restoring the affected areas. The restoration and rehabilitation provision is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date, based on current legal requirements. Future restoration costs are reviewed at least annually and any changes in the estimate are reflected in the present value of the restoration and rehabilitation provision at each reporting date. To date the Company does not have any significant restoration obligations. I.

   Impairment
 At each financial position reporting date the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the profit or loss for the period. For the purposes of impairment testing, each resource property is considered a cash-generating unit and assets are allocated to each cash-generating unit to which the exploration activity relates. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. F-12
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  J.

   Share-based payment transactions
 Share-based payments to employees are measured at the fair value of the instruments issued and each tranche is recognized on a straight-line basis over the vesting period. An individual is classified as an employee when the individual is an employee for legal or tax purposes (“direct employee”) or provides services similar to those performed by a direct employee. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. Fair value of the equity instruments issued is determined using the Black-Scholes option pricing model. The offset to the recorded cost is to share-based payments reserve. Consideration received on the exercise of stock options is recorded as share capital and the related share-based payments reserve is transferred to share capital. The Company estimates the number of equity instruments that are expected to vest and then, at each reporting date, makes adjustments to the actual number that vest unless forfeitures are due to market-based conditions. K.

   Income taxes
 Income tax expenses comprises current and deferred tax. Current and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in shareholders’ equity or in other comprehensive income or loss. Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date. Deferred tax is accounted for using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not recognized for temporary differences related to the initial recognition of assets or liabilities that affect neither accounting nor taxable profit nor investments in subsidiaries, associates and interests in joint ventures to the extent it is probable that they will not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner and expected date of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. A deferred tax asset is recognized only to the extent that it is probable that future taxable amounts will be available against which the asset can be utilized. L.

   Loss per common share
 The Company computes the dilutive effect of options, warrants and similar instruments whereby the dilutive effect on loss per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. The Company assumes that the proceeds would be used to purchase common shares at the average market price during the period. For the periods presented, this calculation proved to be anti-dilutive. Basic and diluted loss per share is calculated using the weighted average number of common shares outstanding during the year. F-13
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  M.

   Use of Judgments and Estimates
 The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of income and expenses during the reporting periods. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Critical judgments in applying accounting policies: The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements: Determination of share-based payments: The assumptions used in determining the fair value of share options granted include judgments in respect of length of service together with share price volatility, dividend, interest yields and exercise patterns. Also, the Company estimates the fair value using the Black-Scholes option pricing model but recognizes that other valuation models could provide differing results. Management believes that the current model provides a fair valuation measure. Assessment of impairment: The Company reviews each asset (or cash generating unit) at each reporting date to determine whether there are any indicators of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. The recoverable amount of an asset (or cash generating unit) is measured at the higher of fair value less costs to sell and value in use. Income taxes Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company`s current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome for these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities. In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent that it is probable that taxable profit will be available against which a deductible temporary difference can be utilized. This is deemed to be the case when there is sufficient taxable temporary difference relating to the same taxation authority and the same taxable entity which are expected to reverse in the same year as the expected reversal of the deductible temporary difference, or in years into which a tax loss arising from the deferred tax asset can be carried back or forward. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped. F-14
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  N.

   New Standards Not Yet Adopted
  IFRS 7, Financial Instruments: Disclosures- In December 2011, the IASB amended IFRS 7 requiring additional disclosures about the initial application of IFRS 9. This amendment is effective for annual periods beginning on or after January 1, 2015 (or otherwise when IFRS 9 is first applied). IAS 32, FinancialInstruments: Presentation,was amended in December 2011 relating to application guidance on the offsetting of financial assets and financial liabilities. This standard is effective for annual periods beginning on or after January 1, 2014. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.IFRS 9, Financial Instruments- The IASB intends to replace IAS 39, *Financial Instruments: Recognition and Measurement* (“IAS 39”), in its entirety with IFRS 9, *Financial Instruments*(“IFRS 9”) in three main phases. IFRS 9 will be the new standard for the financial reporting of financial instruments that is principles-based and less complex than IAS 39, and has an unknown postponed effective date. IFRS 9 requires that all financial assets be classified as subsequently measured at amortized cost or at fair value based on the Company’s business model for managing financial assets and the contractual cash flow characteristics of the financial assets. Financial liabilities are classified as subsequently measured at amortized cost except for financial liabilities classified as at fair value through profit or loss, financial guarantees and certain other exceptions. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.IFRS 10, Consolidated Financial Statements– This standard establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. This standard (i) requires a parent entity (an entity that controls one or more other entities) to present consolidated financial statements; (ii) defines the principle of control, and establishes control as the basis for consolidation; (iii) sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee; and (iv) sets out the accounting requirements for the preparation of consolidated financial statements. IFRS 10 supersedes IAS 27, Consolidated and Separate FinancialStatements, (“IAS 27”) and SIC-12, Consolidation – Special Purpose Entitiesand is effective for annual periods beginning on or after January 1, 2013, with early application permitted. IAS 27 and IAS 28, Investments in Associates, were revised and reissued as IAS 27, Separate Financial Statements, and IAS 28, Investments in Associates and Joint Ventures, to align with the new consolidation guidance. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.IFRS 11, Joint Arrangements– This standard establishes the core principle that a party to a joint arrangement determines the type of joint arrangement in which it is involved by assessing its rights and obligations and accounts for those rights and obligations in accordance with that type of joint arrangement. This standard is effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.IFRS 12, Disclosure of Involvement with Other Entities– This standard requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows. This standard is effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements. F-15
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  2.

   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  N.

   New Standards Not Yet Adopted(continued)
 IFRS 13, Fair Value Measurement(“IFRS 13”) – This standard defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for: share-based payment transactions within the scope of IFRS 2, Share-based Payment; leasing transactions within the scope of IAS 17, Leases; measurements that have some similarities to fair value but that are not fair value, such as net realizable value in IAS 2, Inventoriesor value in use in IAS36, Impairment of Assets. This standard is effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements. 3.

   MARKETABLE SECURITIES
 The Company’s holdings of marketable securities consist of shares in Lund Enterprises Corp., formerly Lund Gold Ltd. (“Lund”) whose shares are listed on the TSX Venture Exchange (the “Exchange”). Lund is a related party in that it has a number of directors in common with the Company. During the year ended October 31, 2013 the Company recognized a write down of $26,010 recorded in the loss for the year. During prior years, the Company recognized an unrealized loss of $4,335 in fiscal 2012 and $8,670 in fiscal 2011. Marketable

   Number of

   Fair value per

   Fair value end

   Fair value per

   Fair valuesecurity

   shares

   share end of

   of year

   share beginning

   beginning ofyear

   

   of year

   yearLund

   289,000

   $0.01

   $ 2,890

   $ 0.025

   $ 7,225
 In March 2012, the Company acquired 175,438 shares in Petaquilla Mineral Ltd. (“Petaquilla”) which is listed on the TSX Stock Exchange. Petaquilla is an arm’s length company whose shares were acquired as consideration for the sale of certain mineral concessions to Petaquilla (Note 5). During the year ended October 31, 2012, the Company sold all its shares in Petaquilla for total proceeds of $67,763 and recognized a total net loss of $32,237. The Company also holds 3,521,648 shares of Buffalo Gold Ltd. (“Buffalo”), a company whose shares are no longer listed on any quoted market. Accordingly, the carrying value was reduced to $nil in fiscal 2009. F-16
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  4.

   PROPERTY AND EQUIPMENT
  Leasehold

   

   Furniture and

   

   Computer

   

   Officeimprovements

   

   fixtures

   

   equipment

   

   equipment

   

   TotalCostBalance at October 31, 2011

   $

   52,185

   $

   8,613

   $

   2,289

   $

   1,622

   $

   64,709Additions

   

   -

   

   -

   

   -

   

   -

   

   -Disposals

   

   -

   

   -

   

   -

   

   -

   

   -Balance at October 31, 2012

   

   52,185

   

   8,613

   

   2,289

   

   1,622

   

   64,709Additions

   

   -

   

   -

   

   -

   

   -

   

   -Disposals

   

   -

   

   -

   

   -

   

   -

   

   -Balance at October 31, 2013

   $

   52,185

   $

   8,613

   $

   2,289

   $

   1,622

   $

   64,709Accumulated AmortizationBalance at October 31, 2011

   $

   35,346

   $

   5,880

   $

   1,564

   $

   1,108

   $

   43,898Amortization

   

   10,434

   

   1,724

   

   460

   

   324

   

   12,942Disposals

   

   -

   

   -

   

   -

   

   -

   

   -Balance at October 31, 2012

   

   45,780

   

   7,604

   

   2,024

   

   1,432

   

   56,840Amortization

   

   6,405

   

   1,009

   

   265

   

   190

   

   7,869Disposals

   

   -

   

   -

   

   -

   

   -

   

   -Balance at October 31, 2013

   $

   52,185

   $

   8,613

   $

   2,289

   $

   1,622

   $

   64,709Net Book ValueOctober 31, 2011

   $

   16,839

   $

   2,733

   $

   725

   $

   514

   $

   20,811October 31, 2012

   $

   6,405

   $

   1,009

   $

   265

   $

   190

   $

   7,869October 31, 2013

   $

   -

   $

   -

   $

   -

   $

   -

   $

   -
 F-17
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  5.

   EXPLORATION AND EVALUATION ASSETS
  Lewis Property, NevadaBalance, October 31, 2010

   

   7,833,765Advance royalty

   

   41,169Assays and storage

   

   7,263Land, legal and insurance

   

   51,779Total additions in the year

   

   100,2117,933,976Write-down of exploration and evaluation assets

   

   (7,933,976

   )Balance, October 31, 2011

   

   -Advance royalty

   

   44,410Assays and storage

   

   7,435Contractors and geological staff

   

   11,939Land, legal and insurance

   

   17,226Total additions in the year

   

   81,010Reclassified as exploration expenditures

   

   (81,010

   )Balance, October 31, 2012

   

   -Advance royalty

   

   44,721Assays and storage

   

   7,495Contractors and geological staff

   

   29,127Land, legal and insurance

   

   37,613Total additions in the year

   

   118,956Reclassified as exploration expenditures

   

   (118,956

   )Balance, October 31, 2013

   $

   -
 Lewis Property, Nevada The Company and Americas Bullion Royalty Corp. (“Americas”) (formerly Golden Predator Corp. and formerly Great American Minerals, Inc.) entered into an exploration and option to purchase agreement with Victory Exploration Inc. dated May 29, 2002 (the “Lewis Agreement”) to jointly acquire a 100% interest in the Lewis Property, located in Lander County, Nevada. Americas is a publicly traded company trading on the Toronto Stock Exchange. The Company and Americas also entered into a joint venture letter agreement dated May 23, 2002 whereby the Company acquired a 60% interest in the Lewis Agreement and the Company and Americas elected to participate in the further exploration and development of the Lewis Property on a 60/40 joint venture basis. On March 29, 2006, the Company and Americas 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 Americas as well as charging a project management fee to offset certain administrative expenses. F-18
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  5.

   EXPLORATION AND EVALUATION ASSETS (CONTINUED)
 On December 27, 2007 the parties to the Venture exercised their option to purchase the Lewis 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% and recorded as acquisition costs of $1,206,720 and advance royalty cost of $36,202, and by Americas as to 40%. As at October 31, 2013, Americas owed $29,554 (October 31, 2012 – $10,708) to the Company, in its capacity as the project manager, for exploration and management costs incurred on the project. The Lewis Property is subject to a 5% gross royalty on gold or silver produced and a 4% net smelter returns royalty on all other metals. These royalties are subject to an annual advance minimum royalty of US$60,000, subject to annual escalation based upon a defined consumer price index (“CPI”), commencing in 2007 on the exercise of the purchase option. These royalties can be purchased for the price of US$4,000,000 for a period of one year following the exercise in December 2007 of the purchase option, or thereafter for a price which increases by US$500,000 per annum each December 27 for a period of 35 years. During the fiscal year ended October 31, 2011 the Company recorded an impairment charge of $7,933,976 writing off all costs recorded in respect of the Lewis Property. Henceforth it commenced charging ongoing exploration and related costs to its consolidated statement of comprehensive loss, classified as exploration expenditures. In November 2013 the parties made the required advance royalty payment in respect of calendar year 2014 of USD $76,499 of which the Company’s portion was USD $45,899, recorded as $48,630. Belencillo Mineral Concession, Republic of Panama In March 2012 the Company sold its 31.12% interest in the Belencillo mineral concession in the Republic of Panama to Petaquilla Minerals Ltd. ("Petaquilla"), an arm's length corporation whose shares are listed and trade on the Toronto Stock Exchange (the "Exchange"), in consideration of: a) shares of Petaquilla with a value of $100,000 issuable upon regulatory approval; and b) a further 250,000 shares of Petaquilla issuable upon the commencement of commercial production on the subject concession. On March 8, 2012 the Company received 175,438 shares of Petaquilla in satisfaction of the first tranche of shares to be issued (Note 3). The Company had in prior fiscal years written off all carrying costs in respect of this project. Accordingly, the Company recorded a gain on sale of $100,000. 6.

   SHARE CAPITAL(a)

   Authorized:As at October 31, 2013, the authorized share capital of the Company was an unlimited number of common shares without par value.(b)

   Issued:Common shares: 40,906,727 (October 31, 2012 – 40,906,727; October 31, 2011 - 40,906,727)(c)

   Shareholders rights plan:The Company has in place 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, originally adopted with a ten-year term during 1998, was renewed in March 2008 with a further ten-year term expiring March 5, 2018. F-19
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  6.

   SHARE CAPITAL (CONTINUED)(d)

   Stock options:The Company has a rolling stock options plan (the “Options 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 Options Plan. Under the Options 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 Options Plan will have a term not to exceed five years and are subject to vesting provisions as determined by the Board of Directors of the Company.Stock option transactions are summarized as follows: Number of Stock

   

   Weighted AverageOptions

   

   

   Exercise PriceOutstanding at October 31, 2010

   2,637,616

   

   $

   0.83Granted

   -

   

   

   -Exercised

   -

   

   

   -Expired or cancelled

   (1,687,616

   )

   

   1.10Outstanding at October 31, 2011

   950,000

   

   $

   0.36Granted

   -

   

   

   -Exercised

   -

   

   

   -Expired or cancelled

   (200,000

   )

   

   0.77Outstanding at October 31, 2012

   750,000

   

   $

   0.25Granted

   -

   

   

   -Exercised

   -

   

   

   -Expired or cancelled

   (750,000

   )

   

   0.25Outstanding and exercisable at October 31, 2013

   -

   

   $

   -
  (e)

   Share compensation plan:The Company has a plan whereby the Board of Directors may at its discretion in any 12 month period allot and issue up to a maximum in the aggregate of 250,000 common shares to one or more officers, employees or consultants for providing extraordinary contributions to the advancement of the Company. F-20
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  6.

   SHARE CAPITAL (CONTINUED)(f)

   Warrants:Share purchase warrant transactions are summarized as follows: Number of Warrants

   

   Weighted AverageExercise PriceOutstanding at October 31, 2010

   984,833

   

   $

   0.25Issued

   3,500,000

   

   

   0.15Exercised

   -

   

   

   -Expired or cancelled

   (984,833

   )

   

   0.25Outstanding at October 31, 2011

   3,500,000

   

   $

   0.15Issued

   -

   

   

   -Exercised

   -

   

   

   -Expired or cancelled

   -

   

   

   -Outstanding at October 31, 2012

   3,500,000

   

   $

   0.15Issued

   -

   

   

   -Exercised

   -

   

   

   -Expired or cancelled

   (2,500,000

   )

   

   0.15Outstanding and exercisable at October 31, 2013

   1,000,000

   

   $

   0.16
 As at October 31, 2013, the following share purchase warrants were outstanding and exercisable: Number of Warrants

   Exercise Price

   Expiry Date1,000,000*

   $

   0.16

   April 14, 2015
 * On April 15, 2013, the terms of these warrants were amended to extend the expiry date of the warrants from April 14, 2013 to April 14, 2015. All other terms remain the same. 7.

   RELATED PARTY TRANSACTIONS
 The Company incurred the following expenses with key management personnel, consisting of senior officers, directors and a professional services firm controlled by a director: Year ended October

   

   

   

   Year ended October

   

   

   

   Year ended October31, 2013

   

   

   

   31, 2012

   

   

   

   31, 2011Directors’ fees

   $

   12,000

   

   

   $

   12,000

   

   

   $

   12,000Legal fees

   

   5,500

   

   

   

   14,350

   

   

   

   30,100Salaries and benefits

   

   76,440

   

   

   

   83,440

   

   

   

   72,860$

   93,940

   

   

   $

   109,790

   

   

   $

   114,960
 Directors’ fees, legal fees, and salaries and benefits have been expensed to operations, or capitalized to exploration and evaluation assets, based on the nature of the expenditure. F-21
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  7.

   RELATED PARTY TRANSACTIONS (CONTINUED)Included in trade and other payables at October 31, 2013 is $388,730 (October 31, 2012 - $321,210; October 31, 2011 - $233,660) due to related parties.8.

   SEGMENT INFORMATIONThe Company has one operating segment being the exploration of exploration and evaluation assets located in the United States (Note 5). The Company’s property and equipment are all currently located in Canada (Note 4).9.

   COMMITMENTSTo retain its interests, the Company is committed to certain advance royalty payments at the Lewis Property as set out in Note 5.The Company has no contingencies.10.

   FINANCIAL INSTRUMENTSThe Company’s financial instruments include cash, marketable securities, receivable from joint venture partner, receivables, and trade and other payables. (a)

   Financial assets and liabilities by category
  At October 31, 2013

   

   FVTPL

   

   Available-for-sale

   

   Loans andreceivables

   

   Other financialliabilities

   

   TotalFinancial assetsCash

   $

   85,940

   $

   -

   $

   -

   $

   -

   $

   85,940Marketable securities

   

   -

   

   2,890

   

   -

   

   -

   

   2,890Receivable from joint venture partner

   

   -

   

   -

   

   29,554

   

   -

   

   29,554Receivables

   

   -

   

   -

   

   2,813

   

   -

   

   2,813Total financial assets

   $

   85,940

   $

   2,890

   $

   32,367

   $

   -

   $

   121,197Financial liabilitiesTrade and other payables

   $

   -

   $

   -

   $

   -

   $

   466,262

   $

   466,262At October 31, 2012

   

   FVTPL

   

   Available-for-sale

   

   Loans andreceivables

   

   Other financialliabilities

   

   TotalFinancial assetsCash

   $

   403,852

   $

   -

   $

   -

   $

   -

   $

   403,852Marketable securities

   

   -

   

   7,225

   

   -

   

   -

   

   7,225Receivable from joint venture partner

   

   -

   

   -

   

   10,708

   

   -

   

   10,708Receivables

   

   -

   

   -

   

   6,549

   

   -

   

   6,549Total financial assets

   $

   403,852

   $

   7,225

   $

   17,257

   $

   -

   $

   428,334Financial liabilitiesTrade and other payables

   $

   -

   $

   -

   $

   -

   $

   388,800

   $

   388,800
  (b)

   Fair value of financial instrumentsThe carrying values of receivable from joint venture partner, receivables, and trade and other payables approximate their fair values due to their relatively short maturity. F-22
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  10.

   FINANCIAL INSTRUMENTS (CONTINUED)(c)

   Fair value hierarchyIFRS requires disclosures about the inputs to fair value measurements, including their classification within a hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; andLevel 3 – Inputs that are not based on observable market data. The following tables illustrate the valuation method of the Company’s financial instruments carried at fair value as at October 31, 2013 and October 31, 2012: At October 31, 2013

   

   Level 1

   

   Level 2

   

   Level 3

   

   TotalCash

   $

   85,940

   $

   -

   $

   -

   $

   85,940Marketable securities

   $

   2,890

   $

   -

   $

   -

   $

   2,890At October 31, 2012

   

   Level 1

   

   Level 2

   

   Level 3

   

   TotalCash

   $

   403,852

   $

   -

   $

   -

   $

   403,852Marketable securities

   $

   7,225

   $

   -

   $

   -

   $

   7,225
  11.

   FINANCIAL RISK MANAGEMENT
 The Company is exposed to a variety of financial risks by virtue of its activities, including foreign currency risk, liquidity risk, equity market risk, interest rate risk and credit risk. The Company’s objective with respect to financial risk management is to minimize potential adverse effects on the Company’s financial position and performance. Management is responsible to the Board of Directors for establishing controls and procedures with the objectives that financial risks are mitigated to acceptable levels. (a)

   Foreign currency riskForeign currency risk is the risk that the fair values of financial assets and liabilities denominated and for settlement in currencies other than the Canadian dollar (CAD) may fluctuate because of changes in foreign exchange rates. The Company holds a portion of its cash in United States dollars (USD), however, at October 31, 2013 the Company’s exposure to exchange rate changes for the USD was not material. To date the Company has elected not to hedge its USD exposures by futures or options strategies. F-23
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  11.

   FINANCIAL RISK MANAGEMENT (CONTINUED)
  (b)

   Liquidity riskLiquidity risk is the risk that the Company will not be able to meet its obligations as they become due. At October 31, 2013 the Company had current assets of $121,197 with current liabilities of $466,262 resulting in a working capital deficiency of $345,065. The Company has no regular cash flows from its operating activities. In addition, the Company will depend on management’s ability to raise the funds required through future equity financings. If such funds cannot be raised, the Company would be required to postpone or curtail its operating and investing activities. The Company manages its liquidity risk by forecasting cash flow requirements for its planned exploration and corporate activities and anticipating investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of annual budgets and of significant expenditures and commitments, and in monitoring the climate and opportunity for equity financings.(c)

   Equity market riskThe Company is exposed to equity market risk arising from its investments, which are marketable securities classified as available-for-sale. The Company’s maximum exposure to equity market risk is the carrying value of its investments.(d)

   Interest rate riskThe Company’s exposure to interest rate risk is not material. The nature of its financial instruments do not lead to any material risk that their fair values or future cash flows will fluctuate because of changes in market interest rates.(e)

   Credit riskCredit risk is the risk of financial loss to the Company if a counter-party to a financial instrument fails to meet its contractual obligations. The Company has no material counter-parties to its financial instruments with the exception of the financial institutions which hold its cash deposits. The Company manages this credit risk by investing its cash in interest-bearing accounts at a major Canadian chartered bank. The Company has no material receivables and, therefore, does not believe it has a material exposure to credit risk.(f)

   Capital ManagementThe capital of the Company consists of the items included in shareholders’ equity. The Company manages its capital structure and makes adjustments to it based on the funds required by and available to the Company. The Company’s objective for capital management is to plan for the capital required to support the Company’s ongoing acquisition and exploration of its exploration and evaluation assets and to provide sufficient funds for its corporate activities.The Company’s exploration and evaluation assets are in the exploration stage. As an exploration stage company, the Company is currently unable to self-finance its operations. The Company has historically relied on equity financings to finance operations. In order to carry out the Company’s planned exploration programs and to pay for administrative costs, the Company will spend its existing working capital and raise additional funds as required. The Company uses a planning and budgeting process to manage its capital requirements. 12.

   SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
 The Company had no significant non-cash transactions for the years ended October 31, 2013, 2012 and 2011. F-24
      MADISON MINERALS INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the years ended October 31, 2013, 2012 and 2011(Expressed in Canadian Dollars, unless otherwise stated)
  13.

   INCOME TAXES
 A reconciliation of income taxes at statutory rates with reported taxes is as follows: Year ended

   

   

   

   Year ended

   

   

   

   Year endedOctober 31, 2013

   

   

   

   October 31, 2012

   

   

   

   October 31, 2011Loss for the year before income taxes

   $

   (418,000

   )

   

   $

   (256,370

   )

   

   $

   (8,172,102

   )Expected income tax recovery

   $

   100,000

   

   

   $

   64,733

   

   

   $

   2,193,000Items not deductible for tax purposes, tax rate differences and other

   

   188,000

   

   

   

   2,093

   

   

   

   542,000Losses for which no tax benefit has been recognized and change in unrecognized deductible temporary differences

   

   (288,000

   )

   

   

   (66,826

   )

   

   

   (2,735,000

   )Income tax (expense) recovery

   $

   -

   

   

   $

   -

   

   

   $

   -
 The Canadian income tax rate declined during the year due to changes in the law that reduced corporate income tax rates in Canada. The deductible temporary differences and unused tax losses that are not recognized as deferred tax assets are as follows: Year ended

   Expiry dates

   

   Year ended

   

   Year endedOctober 31,

   

   

   October 31,

   

   October 31,2013

   

   

   2012

   

   2011Exploration and evaluation assets

   $

   10,547,000

   No expiry date

   $

   7,520,508

   $

   8,072,106Non-capital losses available for future periods

   

   5,065,000

   2014-2033

   

   7,889,166

   

   7,125,047Property and equipment

   

   278,000

   No expiry date

   

   269,643

   

   256,701Other

   

   55,000

   No expiry date

   

   78,771

   

   49,037
 Tax attributes are subject to review, and potential adjustments, by tax authorities. F-25