UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER 000-51302
MADISON EXPLORATIONS, INC.
_________________________________________________________________
(Exact Name of Small Business Issuer as Specified in its Charter)
NEVADA
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
525 Seymour Street, Suite 900
Vancouver, BC, Canada V6B 3H7
________________________________________ __________
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (604) 974-0568
Issuer's fax number: (604) 974-0569
N/A
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report. Former Address: 525 Seymour Street, Suite 807, Vancouver, BC, Canada,
V6B 3H7)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes / / No /X/
Indicate by check mark whether the registrant is a shell company (as defined in
12b-2 of the Exchange Act). Yes /X/ No / /
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
At March 31, 2007, and as of the date hereof, there were outstanding
113,020,000 shares of the Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes / / No /X/
-2-
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MADISON EXPLORATIONS, INC.
(A Development Stage Enterprise)
CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
MARCH 31, 2007
DECEMBER 31, 2006
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
MANAGEMENT CERFICATION
The financial statements attached are prepared in accordance with U.S. generally
accepted accounting principles (U.S. GAAP). The financial statements have not
been audited. The Company's Treasurer certifies that the statements and the
notes thereto, present fairly, in all material respects, the financial position
of the issuer and the results of its operations and cash flows for the periods
presented, in conformity with accounting principles generally accepted in the
United States, consistently applied.
Joel Haskins
Madison Explorations Inc.
Treasurer
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONTENTS
FINANCIAL STATEMENTS
Consolidated Balance Sheets F-1
Consolidated Statements of Operations F-2
Consolidated Statements of Stockholders' Equity (Deficit) F-3
Consolidated Statements of Cash Flows F-4
Notes to Consolidated Financial Statements F-5 - F-7
________________________________________________________________________________
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
2007 2006
__________ ____________
ASSETS
CURRENT ASSETS
Cash $ 12,064 $ 20,422
Deposits 4,330 4,290
Prepaid Expenses 1,010 1,001
__________ __________
Total current assets $ 17,404 $ 25,713
__________ __________
Total assets $ 17,404 $ 25,713
========== ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 5,844 $ 2,500
Note payable and accrued interest 29,297 28,797
Deferred revenue 50,000 50,000
Officers loans and advances 26,130 29,128
__________ __________
Total current liabilities $ 111,271 $ 110,425
__________ __________
STOCKHOLDERS' (DEFICIT)
Common stock: $.001 par value;
authorized 500,000,000 shares;
issued and outstanding: 113,020,000 shares
at December 31, 2006 and 113,020,000
shares at March 31, 2007 $ 113,020 $ 113,020
Additional paid-in capital (57,118) (57,118)
Accumulated other comprehensive income (4,432) (4,295)
Accumulated deficit during development stage (145,337) (136,319)
__________ __________
Total stockholders' (deficit) $ (93,867) $ (84,712)
__________ __________
Total liabilities and
stockholders' (deficit) $ 17,404 $ 25,713
========== ==========
See Accompanying Notes to Consolidated Financial Statements.
F-1
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
June 15, 1998
Three months ended inception) to
March 31, March 31, March 31,
2007 2006 2007
_____________ _____________ _____________
Revenues $ - $ - $ 94,000
Cost of revenue - - -
_____________ _____________ _____________
Gross profit $ - $ - $ 94,000
Operating expenses
Exploration and development $ 131 $ 3,766 $ 109,040
General and administrative 8,062 4,978 121,879
_____________ _____________ _____________
Operating (loss) (8,193) (8,744) $ (136,919)
Other expense 825 945 8,418
_____________ _____________ _____________
Net loss $ (9,018) $ (9,689) $ (145,337)
============= ============= =============
Net loss per share, basic
and diluted $ (0.00) $ (0.00)
============= =============
Average number of shares
of common stock outstanding 113,020,000 112,822,222
============= =============
See Accompanying Notes to Consolidated Financial Statements.
F-2
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
Accumulated
Deficit Accumulated
Common Stock Additional During Other
___________________________ Paid in Development Comprehensive
Shares Amount Capital Stage Income Total
___________ ___________ __________ ___________ _____________ _________
June 15, 1998, issue
common stock 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430
Net loss, December 31, 1999 - - - - -
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 1999 53,750,000 $ 53,750 $ (53,320) - $ - $ 430
Net loss, December 31, 2000 - - - - -
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2000 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430
Net loss, December 31, 2001 - - - - -
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2001 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430
Net loss, December 31, 2002 - - - - -
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2002 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430
Net loss, December 31, 2003 - - - - -
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2003 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430
Issuance of common stock for cash 59,070,000 59,070 (58,598) 472
June 14, 2004 forward stock split
5000:1
Capital contribution 5,000 5,000
Foreign currency adjustments (2,554) (2,554)
Net loss, December 31, 2004 - - - (49,108) (49,088)
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2004 112,820,000 $ 112,820 $ (106,918) $ (2,554) $ (49,088) $ (45,740)
Foreign currency adjustments (444) (444)
Net loss, December 31, 2005 - - - (48,720) (48,720)
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2005 112,820,000 $ 112,820 $ (106,918) $ (2,998) $ (97,808) $ (94,904)
Issuance of common stock for cash 200,000 200 49,800 50,000
Foreign currency adjustments (1,297) (1,297)
Net loss, December 31, 2006 - - - (38,511) (38,511)
___________ ___________ __________ ___________ ___________ _________
Balance, December 31, 2006 113,020,000 $ 113,020 $ (57,118) $ (4,295) $ (136,319) $ (84,712)
Foreign currency adjustments (137) (137)
Net loss, March 31, 2007 - - - (9,018) (9,018)
___________ ___________ __________ ___________ ___________ _________
Balance, March 31, 2007 113,020,000 $ 113,020 $ (57,118) $ (4,432) $ (145,337) $ (93,867)
=========== =========== ========== =========== =========== =========
See Accompanying Notes to Consolidated Financial Statements.
F-3
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Dec. 3, 1998
Three months ended (inception) to
March 31, March 31, March 31,
2007 2006 2007
__________ __________ _____________
Cash Flows From
Operating Activities
Net loss $ (9,018) $ (9,689) $ (145,337)
Adjustments to reconcile net loss
to cash used in operating activities:
Changes in assets and liabilities
(Increase) in deposits (40) - (4,330)
(Increase) in prepaid expenses (9) - (1,010)
Increase (decrease) in accounts payable and accruals 3,344 252 5,844
Increase in deferred revenue - - 50,000
__________ __________ __________
Net cash used in
operating activities $ (5,723) $ (9,437) (94,833)
__________ __________ __________
Cash Flows From
Investing Activities
Net cash provided used in
investing activities $ - $ - -
__________ __________ __________
Cash Flows From
Financing Activities
Issuance of common stock $ - $ 50,000 $ 50,902
Capital contribution - - 5,000
Officer loans and advances (2,998) 321 26,130
Note payable 500 500 29,297
__________ __________ __________
Net cash provided by (used in)
financing activities $ (2,498) $ 50,821 $ 111,329
__________ __________ __________
Effect of exchange rate changes on cash and
cash equivalents $ (137) $ (141) $ (4,432)
__________ __________ __________
Net increase (decrease)
in cash $ (8,358) $ 41,243 $ 12,064
Cash, beginning of period 20,422 56,288 -
__________ __________ __________
Cash, end of period $ 12,064 $ 97,531 $ 12,064
========== ========== ==========
See Accompanying Notes to Consolidated Financial Statements.
F-4
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited Consolidated Financial Statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-QSB. They
do not include all information and notes required by generally accepted
accounting principles for complete financial statements. However, except as
disclosed herein, there has been no material change in the information disclosed
in the notes to the consolidated financial statements included in the Annual
Report on Form 10-SB of Madison Explorations, Inc. for the year ended December
31, 2006. When used in these notes, the terms "Company," "we," "us" or "our"
mean Madison Explorations, Inc. In the opinion of management, all adjustments
(including normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 2007 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2006.
NOTE 2. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. These financial statements show that Madison
Explorations, Inc. had a substantial working capital deficiency and that it has
suffered losses since inception. Management believes that the Company will still
need additional financing of approximately $2,000,000 to continue to operate as
planned during the twelve-month period subsequent to March 31, 2007. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. These financial statements have been prepared on the basis of
generally accepted accounting principles as applicable to a going concern,
however the future of Madison Explorations, Inc. will depend upon the company's
ability to obtain adequate financing, successfully resolve any outstanding
contingencies and attain profitable operations. Although the successful
resolution of these uncertainties is not assured, management is of the opinion
that current negotiations for financing and ultimate satisfactory settlement of
any contingencies will allow the company to continue its operations.
Management plans to obtain such financing through private and public offerings
of debt and equity securities. However management cannot assure that the Company
will be able to obtain any or all of the additional financing it will need to
continue to operate through at least March 31, 2008 or that, ultimately, it will
be able to generate any profitable commercial mining operations. If the Company
is unable to obtain the required financing, it may have to curtail or terminate
its operations and liquidate its remaining assets and liabilities.
The accompanying financial statements do not include any adjustments related to
the recoverability and classifications of assets or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue its operations as a going concern
F-5
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 2. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS No. 159 In February 2007, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 159, "The Fair
Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159").
SFAS No. 159 provides the option to report certain financial assets and
liabilities at fair value, with the intent to mitigate volatility in financial
reporting that can occur when related assets and liabilities are recorded on
different bases. This statement is effective for us beginning January 1, 2008.
We do not expect SFAS No. 159 to have a material impact on our consolidated
financial statements.
FASB Interpretation No. 48 In July 2006, the FASB issued Financial
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes--an
Interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the
recognition threshold and measurement of a tax position taken on a tax return.
FIN 48 also requires expanded disclosure with respect to the uncertainty in
income taxes. Effective January 1, 2007, we adopted the provisions of FIN 48
EITF Issue No. 06-10 In March 2007, the Emerging Issues Task Force ("EITF")
reached a consensus on EITF Issue No. 06-10, "Accounting for Deferred
Compensation and Postretirement Benefit Aspects of Collateral Assignment
Split-Dollar Life Insurance Arrangements" ("EITF 06-10"). EITF 06-10 provides
that an employer should recognize a liability for the postretirement benefit
related to collateral assignment split-dollar life insurance arrangements in
accordance with either SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," or APB No. 12 "Omnibus Opinion." Entities should
recognize the effects of applying EITF 06-10 through either (i) a change in
accounting principle through a cumulative-effect adjustment to retained earnings
or to other components of equity or net assets in the statement of financial
position as of the beginning of the year of adoption or (ii) a change in
accounting principle through retrospective application to all prior periods. The
provisions of EITF 06-10 are effective as of January 1, 2008 and are not
expected to have a material impact on our consolidated financial statements.
F-6
MADISON EXPLORATIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 3. STOCKHOLDERS' EQUITY
NET LOSS PER COMMON SHARE
Net loss per share is calculated in accordance with SFAS No. 128, "EARNINGS PER
SHARE." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
The Company has no warrants or options outstanding at March 31, 2007 or December
31, 2006.
NOTE 4. NOTE PAYABLE
The Company has a note payable in the amount of $25,000 from Pale Face Holdings,
Ltd. The note provides for interest payable at 8% annually. Accrued interest on
the note payable was $4,297 as at March 31, 2007 and $3,797 for the year ended
December 31, 2006. The note payable balance including accrued interest was
$29,297 and $28,797 at March 31, 2007 and December 31, 2006, respectively.
NOTE 5. RELATED PARTY TRANSACTIONS
The officers of the Company have advanced funds to the Company to continue
ongoing operations. On June 25, 2004, two officers executed demand notes at 5%
interest for $15,000 in CAD ($12,992 USD) each. Also, funds were advanced to the
Company to form its subsidiary. A total of $147 in US dollars was advanced for
this purpose. Since all funds advanced are due on demand, this amount has been
classified as a liability in the accompanying financial statements. The officers
of the Company also submit expense reports on a regular basis of expenses
incurred on behalf of the Company in the normal performance of their duties.
These payable to the officers for unreimbursed expenses totaled $0 and $0 in
Canadian funds at March 31, 2007 and December 31, 2006, respectively.
Interest on the notes payable for the quarter ended March 31, 2007, was $325 and
$1,314 for the year ended December 31, 2006. As of March 31, 2007 and December
31, 2006, the officer advances were $26,130 and $29,128, including $0 and $1,314
in accrued interest, respectively.
NOTE 6. COMPREHENSIVE INCOME
Accumulated other comprehensive income consists of the following:
March 31, 2007 Dec. 31, 2006
______________ _____________
Foreign currency translation adjustment $ (4,432) $ (4,295)
============== =============
The components of other comprehensive income for the three-month period ended
March 31, 2007 and the year ended December 31, 2006:
March 31, 2007 Dec. 31, 2006 Inception to date
______________ _____________ _________________
Foreign currency translation adjustment $ (137) $ (1,297) $ (4,432)
============== ============= =================
F-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion regarding the Company and our business and operations
contains "forward-looking statements." These statements consist of any statement
other than a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or its negative or other variations or comparable terminology. All
forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements.
PLAN OF OPERATION
The Company was incorporated in June of 1998 under the name of "Madison-Taylor
General Contractors, Inc." and intended to engage as a general contractor for
constructing temporary buildings at exploratory mining locations. Madison-Taylor
General Contractors, Inc. was unable to implement the business and remained
inactive from 1998 until 2004. The Company commenced operations under its
current name in April of 2004. After implementing the Company's current plan of
operation, the Company has relied on advances and contributions of capital of
approximately $28,100 from our principal stockholders, an additional shareholder
loan of $25,000 and proceeds of approximately $144,000 from the sale of a 20%
interest in one of the Company's claims (Bulls Eye), the sale of a 15% interest
in another claim (Bronco), and a further sale of 15% in another claim
(Woodmountain North) to support its limited operations. The Company has also
entered into a private placement agreement whereby the Company issued 200,000
Regulation S Common shares in exchange for $50,000. As of March 31, 2007, the
Company had approximately $12,064 of cash. The Company will need additional
equity or debt financing of up to $2,000,000 to fully implement its planned
exploration program.
GEOLOGICAL REPORT: SOUTHERN SASKATCHEWAN
The Company has several specific exploration objectives:
(1) To locate one or more Kimberlite/Lamproite pipes, dykes or sills;
(2) To determine whether the Kimberlite/Lamproite contains Diamonds; and
(3) To determine if the diamond-bearing pipe could be the source of an
economically viable mine.
Even if the Company locates Kimberlite, the finding of diamonds in Kimberlite is
rare and the finding of a commercial grade of diamonds is rarer.
We believe that exploration is by its very nature is evolutionary. Each
subsequent step is based on the foundation established by previous results. Even
then, diverse factors affect the process. Weather and seasons influence when
work can be commissioned. Previous results determine the direction for future
exploration and the availability of funds dictates what work can be budgeted for
each phase of exploration.
The Company has completed its initial phase of work on the Scout Lake properties
and now intends to continue the initial phase of work on some of its other
properties in the Wood Mountain District. The results at our Scout Lake
properties do not warrant spending further time and money at this location.
Phase one work should consist of a ground magnetometer survey at approximately
500 meter line-spacing. At the same time, surface samples should be taken of
till for heavy mineral evaluation. About 50 samples would cover the grid area
satisfactorily. If results warrant, a few lines of gravimetric surveying could
be done. Two or three RC drill holes (about 500 meter) would then test the
anomaly.
Phase 1 - Initial Wood Mountain Evaluation
- Ground Magnetometer - 1 month Instrument Rental 1,800
- 50 Sample Collections - Processing @ $50 each 2,500
- Gravimetric Survey - Instrument Rental 600
- Chemical Analysis - 50 @ $10 each 500
- Personnel - Geologist 2 weeks @ $300/day 4,200
- Personnel - Assistant 2 weeks @ $200/day 2,800
- Accommodation - $100/day x 2 2,800
- Transportation - Truck Rental, Maintenance 2,000
Engineering & Supervision
- Engineering & Supervision 2,000
- Contingencies approximately 5% 900
Phase 1 Total $20,100
Phase Two - Regional Program
The regional program of exploration is being proposed to locate kimberlite
diatremes. At present, we have regional to detailed heavy mineral anomalies and
regional to detailed magnetic anomalies. Unfortunately, the heavy mineral
dispersion is too widespread and the magnetic anomalies are too numerous to
allow reasonable drill target selection. The following systematic approach may
help us to alleviate this problem:
Regional Structural Study
Kimberlite pipe emplacement is governed by deep-seated structures that penetrate
stable Archean Cratons and allow the rapid rise of lower mantle ultramafic
magmas through diamond-bearing strata. Some of the major structures in southern
Saskatchewan are known, but it appears that a satellite imagery interpretation,
in particular of radar data, would be of value to us.
Regional Heavy Mineral Study
Heavy mineral data is already available to us from the government and other
available for purchase proprietary surveys. However, a large proportion of the
area of our interest remains without data.
It is proposed that a detailed heavy mineral survey be conducted over the area
with one sample being taken per township to start. The usual method of
processing heavy mineral samples, which includes, washing, sizing, gravity
separation by jig, tables or heavy liquids, microscopic hand-picking and
microprobe analysis would be prohibitively expensive. Therefore, the following
processing methodology is suggested:
(a) Sample till or stream sediments (about 20 kg).
(b) Wash and sieve sample in the field or nearby portable equipment to obtain a
clean, sized fraction suitable for hydrosizing.
(c) Use a laboratory-sized elutriator (hydrosizer) to obtain a sized, heavy
mineral fraction. Adjust density to retain all indicator minerals.
(d) Analyze for chromium and nickel and other trace elements by total fusion and
ICP. This will provide an indicator for ultramafic rocks.
(e) Plot results and evaluate for trends.
(f) Some detailed HM testing, - microprobing grain-picking.
Wood Mountain Formation Study
Heavy minerals including standard indicator minerals and micro-diamonds have
been recovered from the unconsolidated sand and gravel deposits of the Wood
Mountain formation. We believe that a heavy mineral study of this formation and
a paleo-current study should be undertaken. The samples should be processed in
the same manner as in the "Regional Heavy Mineral Study."
Compilation of Geophysical Data
(a) Aeromagnetic
(b) Ground magnetic
(c) Gravimetric
(d) Seismic
G.I.S. Compilation of all Data
A G.I.S. (Geographic Information Systems) compilation of the following data
should be undertaken in order to select the best drill targets:
(a) Bedrock Geology
(b) Surficial Geology (i.e. land surface to approximately 5 feet below)
(c) Our HM Surveys
(d) Government surveys
(e) Federal-provincial geochem and HM
(f) Aeromagnetic Data surveys
(g) Gravity Data
(h) Seismic Data
(i) Ground Magnetic Data
(j) Cratonic Age Data
(k) Satellite Radar Imagery Interpretation
Phase 2 - Regional Program
Regional Structural Study
- Satellite Photos - 10 @ $200 each 2,000
- Interpretation - 10 hours @ $500 5,000
- Digitizing 3,000
Regional Heavy Mineral Study
- Sample collection - 600 samples @ $15 each 9,000
- Vehicle - FWD - 3 months @ $2,000/month 6,000
- Detail Sample Collection - 1000 samples @ $15 each 15,000
- Initial Processing 24,000
- Washer/Sieve rental - 3 months @ $2,000/month 6,000
- Sample Bags - 1,600 20Kg bags @ $1 each 1,600
- Sample Bags - 1,600 2Kg bags @ $1 each 1,600
- Elutriation (Hydraulic Separation of HM) - 1600 @ $18.75 each 30,000
- ICP (Induced Coupled Polarization) (total) - 1600 @ $10 each 16,000
- Digitizing 3,000
Regional Surficial Geology Study
- Data Interpretation 4,000
- Digitizing 3,000
Compilation of Geophysical Data
- Data Collection 2,500
- Data Interpretation 5,000
- Digitizing 4,000
G.I.S. Compilation
- Additional Data Collection 5,000
- Data Interpretation 5,000
- Digitizing 5,000
Engineering & Supervision
- Engineering & Supervision 15,000
- Contingencies approximately 5% 7,800
Phase 2 Total $178,500
Phase Three - Drilling and Confirmation
The goal of this phase will be to locate anomalous areas by the use of ground
magnetic surveys, and to prioritize each for test drilling.
Gravimetric Surveys will be completed over the ground magnetic anomalies - 1 or
2 lines per anomaly. Test Drilling will then be conducted to test the best
targets.
Phase 3 - Drilling and Confirmation
Ground Magnetic Surveys
- Instrument Rental - 3 months @ $1,600/month 4,800
- Field computer Rental - 3 month @ $300/month 900
- Operator/Assistant - 70 Days @ $300/day 21,000
Gravimetric Survey
- Instrument Rental - 3 months @ $1,600/month 3,000
- Operator/Assistant - 70 Days @ $300/day 21,000
- Surveying 6,000
Test Drilling
- 5,000 ft. @ $10 50,000
- Cutting Analysis - 50 samples @ $500 each 25,000
Engineering & Supervision
- Engineering & Supervision 13,000
Contingencies approximately 5% 6,700
Phase 3 Total $151,400
24 Month Exploration Budget on new and future claims
The Company intends to option additional property by way of claim staking or
acquiring companies with promising mineral claims in the area of Southern
Saskatchewan and Northern Montana
________________________________________________________________________________
Planned Exploration on future Claims Year 1 Year 2
________________________________________________________________________________
Claim Staking/property acquisition 50,000 50,000
________________________________________________________________________________
Property Exploration Expenditures 500,000 650,000
________________________________________________________________________________
$550,000 $700,000
________________________________________________________________________________
The Company's business plan for the year 2007 will consist of further
exploration on the properties over which we hold mineral exploration claims and
options. As part of Phase Two, the Company also plans to continue staking
strategically important areas as more information becomes available with respect
to the geology of Southern Saskatchewan. The Company intends to use third party
contractors to collect soil samples, process and analyze the results, plot drill
targets, drill the identified targets and other exploration related work. The
Company completed its drill program at Scout Lake in 2005. The results of the
drill program do not warrant spending further time and money at this location.
The main thrust of our program will now be in the Val Marie area of the Wood
Mountain district in Southern Saskatchewan. As of May 15, 2007 the Company
has 56 mineral claims in Southern Saskatchewan.
The combination of numerous indicator minerals (pyrope garnets and chrome
diopsides) and magnetic anomalies make this area a prime target. The indicator
mineral suite is identical chemically to that of the Fort a la Corne district.
An early drilling program is anticipated for this area. Additional targets in
the Wood Mountain district and other areas will also be investigated. Keating
analysis of existing geophysical data over the Company's claim holdings has
identified 6 potential diamond targets, including the 3 targets that were
previously designated as high priority drill targets. Preliminary investigation
of these targets will be carried out to assess the possibility of diamond
deposits existing on the Company's properties.
The Company estimates that we will require approximately $2,000,000 Canadian to
conduct its full exploration program over a two year period. This amount will be
used to pay for prospecting and geological mapping, airborne surveys, lodging
and food for workers, transportation of workers to and from the work sites,
fuel, pick-up truck rentals, assays, drilling, equipment rental, additional
claim staking, and supervision.
The officers and directors have agreed to pay all costs and expenses of having
the Company comply with the federal securities laws (and being a public company)
should the Company be unable to do so. We estimate that these costs will be
approximately $20,000 per year. Our officers and directors have also agreed to
pay the other expenses of the Company, excluding those direct costs and expenses
of data gathering and mineral exploration, should the Company be unable to do
so. To implement our business plan, we will need to secure financing for our
business development. We have no source for funding at this time.
If we are unable to raise additional funds to satisfy our reporting obligations,
investors will no longer have access to current financial and other information
about our business affairs.
Additional funding to conduct either our full exploration program or a partial
exploration program will depend upon our ability to secure loans or obtain
either private or public financing. We have had some preliminary negotiations
for funding that have been unsuccessful and we currently have not undertaken any
further negotiations. There is no assurance that we will be able to obtain such
funding on any terms or terms acceptable to us and if adequate funds are not
available, we believe that our business development will be adversely affected.
Accordingly, there is no assurance that we will be able to continue in business.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.
ITEM 3. CONTROLS AND PROCEDURES.
We carried out an evaluation, under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our disclosure controls and procedures, as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934
as of the end of the period covered by this report. Based on that evaluation,
our Chief Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures as of March 31, 2007 were effective at a
level that provides reasonable assurance to ensure that information required to
be disclosed by us in reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms.
There have been no changes in our internal controls over financial reporting or
in other factors that could materially affect, or are reasonably likely to
affect, our internal controls over financial reporting during the quarter ended
March 31, 2007.
PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the three month
period ended March 31, 2007.
ITEM 3 - DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION.
BOARD MEETING.
Our board held one meeting during the current quarter, which was a special
meeting by written consent.
AUDIT COMMITTEE.
Our board of directors has not established an audit committee. In addition, we
do not have any other compensation or executive or similar committees. We will
not, in all likelihood, establish an audit committee until such time as the
Company generates a positive cash flow of which there can be no assurance. We
recognize that an audit committee, when established, will play a critical role
in our financial reporting system by overseeing and monitoring management's and
the independent auditors' participation in the financial reporting process. At
such time as we establish an audit committee, its additional disclosures with
our auditors and management may promote investor confidence in the integrity of
the financial reporting process.
Until such time as an audit committee has been established, the full board of
directors will undertake those tasks normally associated with an audit committee
to include, but not by way of limitation, the (i) review and discussion of the
audited financial statements with management, and (ii) discussions with the
independent auditors the matters required to be discussed by the Statement On
Auditing Standards No. 61 and No. 90, as may be modified or supplemented.
Our board of directors consistent with our intent to enhance the reliability and
credibility of our financial statements, have submitted the financial statements
included in this Form 10-QSB to our independent auditor prior to the filing of
this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter for which this report
is filed.
The following exhibits are filed with this report:
31.1 Certification of Chief Executive Officer.
31.2 Certification of Chief Financial Officer.
32.1 Section 906 Certification of Chief Executive Officer.
32.2 Section 906 Certification of Chief Financial Officer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: May 15, 2007 MADISON EXPLORATION, INC.
BY: /s/ KEVIN M. STUNDER
________________________________________
Kevin M. Stunder
Chief Executive Officer and Director
BY: /s/ JOEL HASKINS
________________________________________
Joel Haskins
Chief Financial Officer and Director