Madison Mineral


Lewis Gold Property, Nevada LOCATION: Approximately 2,225 hectares (5,500 acres) in Lander County, Nevada, within the Battle Mountain Trend, which hosts a series of gold mines (Marigold, Lone Tree, Fortitude, Phoenix, Twin Creeks, Midas, Trenton Canyon) with resources or past production collectively totaling more than 25 million ounces of gold. OWNERSHIP: Madison operates and owns 60% of the Lewis Property. Joint venture partner Golden Predator Royalty and Development Corp. holds the remaining 40% through its wholly owned subsidiary, Great American Minerals Inc. (GAM). OPPORTUNITY: Precious Metals. The main exploration targets are high-grade structurally controlled veins/faults and lower grade disseminated skarns and replacements associated with north-trending structures and Tertiary intrusives. OVERVIEW Nevada is the world's third largest gold-producing region after South Africa and Australia, accounting for 85% of US production. Most of the state's gold and silver comes from the prolific Carlin Trend and the parallel Battle Mountain Cortez-Eureka Trends. The Lewis Property is strategically located within the Battle Mountain Trend, which hosts a range of mineral deposit types including high-grade vein-hosted gold deposits, large gold-copper porphyry systems with associated peripheral gold-silver skarns, and sedimentary-rock-hosted disseminated gold deposits. The Lewis Property is directly contiguous with the Phoenix Mine placed into production by owner Newmont Mining in late 2006. This newly expanded open-pit mine is scheduled to produce between 300,000 and 350,000 ounces of gold (with by-product copper) over at least a 15-year mine life. Previous operators at Lewis focused their exploration efforts on the Virgin Zone, a major structural-stratigraphic corridor which hosts the mineralization at Newmont's adjacent Phoenix Mine. Their programs confirmed that the Virgin Zone extends onto the Lewis Property within a similar geological environment, for up to 4.5 km of potential strike length, of which only a small portion has been drill-tested to date. Madison has also drill-tested the adjacent sub-parallel Copper Canyon-Buena Vista Structural Zone and a series of structural splays associated with the Virgin Zone. After securing an option to earn 60% of the Lewis Property in 2002 (since earned), Madison Minerals traced the extension of the Virgin Zone north from the Newmont boundary onto the Lewis Property for at least 4.5 kilometers, of which only a small portion has been drill-tested to date. Madison's drilling has also tested a series of associated structural splays, one of which returned bonanza grades of 17.5 g/t gold and 48.1 g/t silver over 32 meters at its intersection with the Virgin Zone. In addition to testing the extension of the Virgin Zone and its associated structural splays, Madison has drill-tested the adjacent sub-parallel Copper Canyon-Buena Vista Zone, located 500 meters west and south of the Virgin Zone. Other areas of interest include two locally mineralized zones with evidence of small-scale historic production. From 2002 to 2008, Madison has drilled 145 reverse circulation (RC) and 29 core holes totaling 36,100 meters (118,100 feet) at the Lewis Property, 160 of which tested the Virgin Zone. All but 15 of these 174 holes interested mineralization. The results of previous, recent and ongoing exploration programs will be used to generate an initial NI 43-101 compliant resource estimate for the Lewis Property. HISTORIC EXPLORATION The Lewis Property was historically mined for high-grade silver, gold and base metals and was first drilled in modern times by Hart River Mines (1980-1985). The discovery and development of a series of world-class gold deposits in the Carlin and Battle Mountain-Eureka Trends during the 1980s attracted several senior companies to intermittently explore the Lewis Property, notably Homestake Mining and the predecessor company of Barrick Gold. A subsequent round of exploration took place from 1996 to 1997, when United Tex-Sol Mines Inc. drilled holes UTX 1-16 at Lewis. The Fortitude Mine adjacent to the Lewis Property was the most significant gold producer in the Battle Mountain Trend during the 1980s and became the flagship operation of Battle Mountain Gold Company after it was spun off from Pennzoil Company in 1985. As Fortitude's high-grade reserves declined in the early 1990s, Battle Mountain Gold diversified from its namesake district to pursue projects worldwide. From 1984 to closure in early 1993, the Fortitude skarn deposit produced 2.8 million ounces of gold and 10.8 million ounces of silver from 11 million tons of ore, with heap-leaching of lower grade disseminated ores continuing until 2006. Newmont Mining acquired Battle Mountain through a merger process completed in early 2001, and soon after reactivated exploration of the Phoenix deposit, the lower grade outer shell of the past-producing Fortitude Mine. The newly constructed Phoenix Mine began operations in late 2006 in time to benefit from rising gold prices. The intermittent exploration efforts of previous operators at the Lewis Property during the 1980s and 1990s focused on the strike extension of the Virgin Zone, the favorable structural-stratigraphic corridor hosting most of the known mineralization at Newmont's adjacent property. Their programs partially traced the Virgin Zone for a minimum 1,000 feet onto the Lewis Property and also outlined a virtually identical geological environment to that underlying Newmont's adjacent property. RECENT EXPLORATION 2008-2010 The 2008 drill program — 17 core holes totaling 3,855 meters and 33 RC holes totaling 5,567 meters — targeted the central portion of the Virgin Zone and consisted of in-fill and step-out holes using 30-meter drill spacings. The core drilling confirmed the previous RC results as well as the geological and structural models, while the overall drilling program expanded the Virgin Zone by 100 meters down-dip over a 300-meter strike length. At year-end 2008, the Virgin Zone was defined over a minimum 750-meter strike length and 350 meters east-west. The zone remains open for expansion along strike to the north and south and down-dip to the west. The 2008 drilling program also encountered significantly higher silver values. As an example, Hole MAD-145 intersected 1.21 g/t gold and 458 g/t silver over 6 meters, for a calculated equivalent of 7.17 g/t gold (at US$9 per ounce silver and US$900 per ounce gold) over the interval. These results suggest an apparent mineral zonation on the property, with silver values increasing to the north and west. Results from the 2008 drilling program compare favorably with previously reported styles and grades of mineralization, including high-grade mineralized structural intersections, steeply oriented structural mineralization and sub-horizontal lower grade mineralization hosted by favorable Antler stratigraphy. Most of the 2008 drill-holes intersected the most common type, sub-horizontal lower-grade mineralization. Madison's exploration programs to date have further confirmed that the Lewis Property shares a virtually identical geological environment to that underlying the Phoenix-Fortitude area, including a direct on-strike extension to the hosting Antler Sequence stratigraphy, controlling structures (Virgin and Copper Canyon – Buena Vista Structural Zones) and mineralizing styles: a sub-vertical structurally controlled type and a sub-horizontal, stratigraphically controlled type. The southern boundary of the Lewis Property lies just 250 meters north and 100 west of Newmont's present open pit, which means any new or proposed northerly or westerly expansion of this pit would require a pushback onto the Lewis Property. Future exploration programs will continue to test the extension of the Virgin Zone, the most advanced exploration target at the Lewis Property, as drilling to date has only tested a small portion of its potential 4.5-km-long extent. Further exploration drilling is also required to define the adjacent sub-parallel Copper Canyon-Buena Vista Zone, located 500 meters west and south of the Virgin Zone. Other areas of exploration interest include the 2-km-long, Central Virgin-Hider-White-Shiloh Zone and the easterly sub-parallel Trinity Zone. Both are known to host significant gold and silver mineralization locally, including small historic production.

Lewis Gold Property, Nevada

LOCATION: Approximately 2,225 hectares (5,500 acres) in Lander County, Nevada, within the Battle Mountain Trend, which hosts a series of gold mines (Marigold, Lone Tree, Fortitude, Phoenix, Twin Creeks, Midas, Trenton Canyon) with resources or past production collectively totaling more than 25 million ounces of gold.

OWNERSHIP: Madison operates and owns 60% of the Lewis Property. Joint venture partner Golden Predator Royalty and Development Corp. holds the remaining 40% through its wholly owned subsidiary, Great American Minerals Inc. (GAM).

OPPORTUNITY: Precious Metals. The main exploration targets are high-grade structurally controlled veins/faults and lower grade disseminated skarns and replacements associated with north-trending structures and Tertiary intrusives.

OVERVIEW

Nevada is the world's third largest gold-producing region after South Africa and Australia, accounting for 85% of US production. Most of the state's gold and silver comes from the prolific Carlin Trend and the parallel Battle Mountain Cortez-Eureka Trends. The Lewis Property is strategically located within the Battle Mountain Trend, which hosts a range of mineral deposit types including high-grade vein-hosted gold deposits, large gold-copper porphyry systems with associated peripheral gold-silver skarns, and sedimentary-rock-hosted disseminated gold deposits.

The Lewis Property is directly contiguous with the Phoenix Mine placed into production by owner Newmont Mining in late 2006. This newly expanded open-pit mine is scheduled to produce between 300,000 and 350,000 ounces of gold (with by-product copper) over at least a 15-year mine life. Previous operators at Lewis focused their exploration efforts on the Virgin Zone, a major structural-stratigraphic corridor which hosts the mineralization at Newmont's adjacent Phoenix Mine. Their programs confirmed that the Virgin Zone extends onto the Lewis Property within a similar geological environment, for up to 4.5 km of potential strike length, of which only a small portion has been drill-tested to date. Madison has also drill-tested the adjacent sub-parallel Copper Canyon-Buena Vista Structural Zone and a series of structural splays associated with the Virgin Zone.

After securing an option to earn 60% of the Lewis Property in 2002 (since earned), Madison Minerals traced the extension of the Virgin Zone north from the Newmont boundary onto the Lewis Property for at least 4.5 kilometers, of which only a small portion has been drill-tested to date. Madison's drilling has also tested a series of associated structural splays, one of which returned bonanza grades of 17.5 g/t gold and 48.1 g/t silver over 32 meters at its intersection with the Virgin Zone.

In addition to testing the extension of the Virgin Zone and its associated structural splays, Madison has drill-tested the adjacent sub-parallel Copper Canyon-Buena Vista Zone, located 500 meters west and south of the Virgin Zone. Other areas of interest include two locally mineralized zones with evidence of small-scale historic production.

From 2002 to 2008, Madison has drilled 145 reverse circulation (RC) and 29 core holes totaling 36,100 meters (118,100 feet) at the Lewis Property, 160 of which tested the Virgin Zone. All but 15 of these 174 holes interested mineralization.

The results of previous, recent and ongoing exploration programs will be used to generate an initial NI 43-101 compliant resource estimate for the Lewis Property.

HISTORIC EXPLORATION

The Lewis Property was historically mined for high-grade silver, gold and base metals and was first drilled in modern times by Hart River Mines (1980-1985). The discovery and development of a series of world-class gold deposits in the Carlin and Battle Mountain-Eureka Trends during the 1980s attracted several senior companies to intermittently explore the Lewis Property, notably Homestake Mining and the predecessor company of Barrick Gold. A subsequent round of exploration took place from 1996 to 1997, when United Tex-Sol Mines Inc. drilled holes UTX 1-16 at Lewis.

The Fortitude Mine adjacent to the Lewis Property was the most significant gold producer in the Battle Mountain Trend during the 1980s and became the flagship operation of Battle Mountain Gold Company after it was spun off from Pennzoil Company in 1985. As Fortitude's high-grade reserves declined in the early 1990s, Battle Mountain Gold diversified from its namesake district to pursue projects worldwide. From 1984 to closure in early 1993, the Fortitude skarn deposit produced 2.8 million ounces of gold and 10.8 million ounces of silver from 11 million tons of ore, with heap-leaching of lower grade disseminated ores continuing until 2006.

Newmont Mining acquired Battle Mountain through a merger process completed in early 2001, and soon after reactivated exploration of the Phoenix deposit, the lower grade outer shell of the past-producing Fortitude Mine. The newly constructed Phoenix Mine began operations in late 2006 in time to benefit from rising gold prices.

The intermittent exploration efforts of previous operators at the Lewis Property during the 1980s and 1990s focused on the strike extension of the Virgin Zone, the favorable structural-stratigraphic corridor hosting most of the known mineralization at Newmont's adjacent property. Their programs partially traced the Virgin Zone for a minimum 1,000 feet onto the Lewis Property and also outlined a virtually identical geological environment to that underlying Newmont's adjacent property.

RECENT EXPLORATION
2008-2010

The 2008 drill program — 17 core holes totaling 3,855 meters and 33 RC holes totaling 5,567 meters — targeted the central portion of the Virgin Zone and consisted of in-fill and step-out holes using 30-meter drill spacings. The core drilling confirmed the previous RC results as well as the geological and structural models, while the overall drilling program expanded the Virgin Zone by 100 meters down-dip over a 300-meter strike length. At year-end 2008, the Virgin Zone was defined over a minimum 750-meter strike length and 350 meters east-west. The zone remains open for expansion along strike to the north and south and down-dip to the west.

The 2008 drilling program also encountered significantly higher silver values. As an example, Hole MAD-145 intersected 1.21 g/t gold and 458 g/t silver over 6 meters, for a calculated equivalent of 7.17 g/t gold (at US$9 per ounce silver and US$900 per ounce gold) over the interval. These results suggest an apparent mineral zonation on the property, with silver values increasing to the north and west.

Results from the 2008 drilling program compare favorably with previously reported styles and grades of mineralization, including high-grade mineralized structural intersections, steeply oriented structural mineralization and sub-horizontal lower grade mineralization hosted by favorable Antler stratigraphy. Most of the 2008 drill-holes intersected the most common type, sub-horizontal lower-grade mineralization.

Madison's exploration programs to date have further confirmed that the Lewis Property shares a virtually identical geological environment to that underlying the Phoenix-Fortitude area, including a direct on-strike extension to the hosting Antler Sequence stratigraphy, controlling structures (Virgin and Copper Canyon – Buena Vista Structural Zones) and mineralizing styles: a sub-vertical structurally controlled type and a sub-horizontal, stratigraphically controlled type.

The southern boundary of the Lewis Property lies just 250 meters north and 100 west of Newmont's present open pit, which means any new or proposed northerly or westerly expansion of this pit would require a pushback onto the Lewis Property.

Future exploration programs will continue to test the extension of the Virgin Zone, the most advanced exploration target at the Lewis Property, as drilling to date has only tested a small portion of its potential 4.5-km-long extent. Further exploration drilling is also required to define the adjacent sub-parallel Copper Canyon-Buena Vista Zone, located 500 meters west and south of the Virgin Zone. Other areas of exploration interest include the 2-km-long, Central Virgin-Hider-White-Shiloh Zone and the easterly sub-parallel Trinity Zone. Both are known to host significant gold and silver mineralization locally, including small historic production.

Lewis Gold Property, Nevada

OVERVIEW

HISTORIC EXPLORATION

RECENT EXPLORATION 2008-2010

RECENT EXPLORATION
2008-2010