Recently it was brought to my attention that a “sell” had been put out on Madison. Actually, the sell was put out by a colleague of mine and a gentleman with whom I’ve been friends with for years—but I couldn’t disagree with him more on this one.
I’ve been preaching for years (can I get an Amen!) that people absolutely must perform their own due diligence on a company and not take someone else’s word on what to do. Not even mine. (another Amen, please!)
In my opinion, Madison is a “buy” not a “sell”.
I am moving my target up to $2.25 US and from there it might well be raised to $5.00 US depending upon how things go with the exploration programs. You’ll notice I’m not being very coy about this. Remember also, that I am the one who said buy Madison up to a $1.25 US on August 14, 2006. This occurred in one of my update pieces. I believe the year high so far for MMRSF has been $1.19 so we’ve come pretty close to the targets.
I’ve been covering this company for five years now and I think I have a feel for it. I would absolutely hate to see people wake up in a few months and be kicking themselves because they sold at exactly the wrong time. And ladies and gentlemen, in my very humble opinion, this is exactly the wrong time.
Why should you NOT be selling?
Why? Well they are in the middle of a drill program at Lewis where excellent results have already been obtained and new assays are pending.
Buffalo Gold, their JV partner on Mt Kare (in PNG) in conjunction with Madison, has just released additional and very positive results. (http://www.madisonminerals.com/html/archive/Madison_Oct_26a_2006.pdf)
Madison Minerals was very pleased to announce the addition of Martha Deacon to their Board of Directors while creating an advisory board comprised of some very high profile and respected professionals including two engineers. To wit, Dr, Donald Kohls, Henry Ewanchuk, P. Eng, and Edward Yurkowski, P. Eng. Incidentally, Dr. Kohls was on Madison’s Board of Directors since 1993 and while he wishes to pursue other interests, he also wishes to continue his involvement with the company. This Board would appear to be the perfect vehicle for that involvement. Please visit their website www.madisonminerals.com for further details.
There are major changes currently occurring at this company and I see them as being very positive. Madison has worked too hard for too long to be summarily dismissed for a few dollars profit. Now is an excellent time to be buying—did I mention that?
The Gold Market will soon begin moving in the Upward Direction
I personally believe that this gold bull market is about ready to get moving again and companies that are exploring advanced stage projects are going to do well. Madison has spent close to $33 million Canadian on this project at Mt. Kare and they have set the table for Buffalo Gold.
Buffalo, Madison’s Joint Venture Partner, has picked up where Madison left off in the realm of exploration. As importantly, Buffalo has done a terrific job in aggressively pursuing the disbursement of the story. Buffalo Gold is going to bring Mt. Kare home. (Cue in the hallelujah chorus right about now!)
Incidentally, it appears that Buffalo Gold will spend an additional $20 million plus or minus to bring the project to fruition; i.e. a bankable feasibility study. The price tag could be significantly higher but let’s be conservative here and say that in order to complete their “earn in”, they will spend that $20 million which combined with Madison’s $33 Million equals something around $53 Million Canadian expended on this project. There is a reason why and part of it can be summed up in the joint press release that the two companies put out on Friday October 26, 2006. For a teaser, please consider:
Buffalo reported:
assay results for drilling at the Western Roscoelite Zone has highlighted additional high-grade intercepts, including:
- 59.1 metres of 10.1 g/t gold in hole MK06-11
- Including 29.0 metres of 17.1 g/t gold
- 16.4 metres of 9.4 g/t gold in hole MK06-66
- Including 9.2 metres of 14.8 g/t gold”
What we really need to understand here is that we’re getting a “twofer”. The whole is greater than the sum of the parts. Let me explain. When we combine the excellent results that we’re receiving from the work that Buffalo is doing along with the excellent results that Madison has achieved at Mt. Kare, we are able to combine the two into a “grand picture” that offers “numbers” larger and more significant than any single company has come up with. Both companies have contributed in a way that allows for a synergistic approach to identifying and quantifying the drill results from these different zones.
A Long Term Winner
My suggestion is not to trade in a short term gain for along term winner. Of course, if you feel you need to sell 1/3 into strength and take some money off the table, by all means do so. Many of you have waited a good long time so see Madison above a buck and who could blame you for taking some profits. I’ve waited right along with you—perhaps longer than most. But my suggestion, as a fellow shareholder, and as one who has a vested interest in this company is to keep some of your marbles in the circle. I preach patience when the project calls for it and this one calls for patience.
Consider also that Madison was recently the number one percentage gainer according to Big Charts and the NY DJ Mining Index—up some 325%. Not too far behind was Buffalo Gold, up some 113%. Remember that Richard Russell says that one should get behind the bull and ride it all the way to the top. I simply don’t believe we are that close to the top at this stage of the game. I would be remiss if I didn’t try and explain my perspective to you. You also have my promise that if and when I believe it is time to cash in the chips, I’ll be the first to let you know.
You are not going to find many companies in the one to two dollar range that have “ten bagger potential”. I just mentioned two of them to you. Of course, I’m biased but when you work with a group for five years, you have a tendency to know the story. You also want those investors who have stuck it out to be rewarded.
But remember, as a disclaimer and for the sake of disclosure, I’m a shareholder in both companies and they do advertise on Goldseek.com. If I didn’t appreciate the talents of these people and the projects that are on the table here, I wouldn’t still be around. You can “bet your bibby “(“Laugh In” circa 1978?), I’d be running the other way.
I want you to personally understand the projects, the management, and the peripheral elements to the story. All you have to do is read the press releases and talk to people at the companies. In these instances that would be David Scott at Madison Minerals (1.877.529.8475) and Julie Hajduk at Buffalo Gold (1.888.685.5492). Both would be more than happy to send you an information kit and to assist you in any way they can.
Both companies have positioned themselves beautifully to participate in this gold bull market. (No, I don’t believe it to be over—far from it; this bull has a long ways to go but more on that another time).
Two Important Consideration of Which you are probably Unaware
First, Damien Reynolds and his team at Buffalo Gold are probably some of the better people in this business at getting their story out. These days, that is an absolutely huge advantage. One of the reasons that Madison has done so well, is that Damien, Julie, Brian (McEwen-CEO), Christine, and on across the line are working in sync to let the world in on the fact that Papua New Guina is a great place to discover gold. Currently most of the team is at a Gold Mining Show in Germany where both Buffalo and Madison have a large shareholder base. I want to be involved in companies that feel compelled to aggressively promote their company when they know they’ve got the goods.
Secondly, Chet Idziszek, David Mallo, and David Scott, and the rest of this team are only too happy to be working with Buffalo Gold on Mt Kare because they need more time and resources to focus on the Lewis Property in Nevada.
Additionally, Oromin (OLE) their project in Sabodala, located in Senegal, Africa has monumental potential and they need additional time and resources for this project. I’ll have more on this story for you in the very near future. Let’s just say everyone is busy—crazy busy and that’s a good thing if you’re a shareholder.
Thirdly, (this is a bonus!) it is my understanding that the management at Madison Minerals which also controls Oromin is revamping their public relations-investor relations department in order to better disseminate the profiles and information about both Madison and Oromin.
In this day and age, sharp management teams understand that they are competing with many other mining companies and need to have an integrated approach to PR/IR. There is a sea change afoot at Madison-Oromin-Lund to elevate their profile. There will even be synergistic efforts between the companies.
Buffalo Gold has already been hard at work elevating their profile by hiring the very best people and directing that information into the most efficient channels. That includes on line, off line (magazines, newspapers) and attendance at shows.
Here is the real kicker. These projects that I’ve mentioned have the goods. Madison (MMR-V and MMRSF-OTCBB) has Mt. Kare and the Lewis Project in Nevada while Oromin (OLE –V and OLEPF-OTCBB) has Sabodala in Africa. Buffalo Gold (BYBUF) has Mt. Kare and a list of other high quality properties.
In every gold bull market, there are a handful of companies that seem to have the “big projects” combined with savvy marketing—MMRSF, BYBUF, and OLEPF fit that bill; you can’t have one with out the other. You know, like love and marriage go together like a horse and carriage. Goodness gracious, I must be dating myself—really I’m 39 just like Jack Benny always was.
Back to a final Word on Madison
Now back to Madison who has optioned a tremendous asset to a JV Partner that not only realizes and understands its potential, but knows how to develop and promote it.
So as Buffalo Gold continues to drill off the Mt. Kare asset with both in fill and step out holes, Madison is supporting them in every way possible.
Ace in the Hole
Several years back, one of my headlines was Madison has Monster Potential. It still does. Even though some people don’t understand that concept, I do, and now—so do you.
That Monster Potential is truly reinforced by what is occurring in Nevada at their “Lewis Property” in Lander County. Recently, Madison raised $5,000,000 and much of those funds will be used to explore the Lewis Property, considered by many professionals to be a plum in Nevada. After all, it does sit right next door to Newmont’s Phoenix Fortitude Complex and they’ve already drilled holes that would make any miner sit up and take notice. Half an ounce of gold over 100 feet is not too shabby. I don’t believe that is the language utilized in the official Handbook of geological vernacular, but you do get my point.
Put another way 0.512 oz per ton gold over 105 feet is the equivalent of 17.5 g/t gold over 32 meters. When we look at the numbers in terms of grams per ton, they seem to really jump out at you; especially in a world where 5 g/t is considered exceptional.
Here is an interesting thought. These results being discovered at the Lewis Property in Nevada are not that dissimilar from those being discovered at Mt. Kare in PNG!!
The reason we don’t currently think in these terms is because the international standard is grams per ton and so when we review ounces per ton with all those decimals, the significance can be lost in the mix. Up until now we’ve been considering Lewis in terms of ounces per ton and PNG in grams per ton. It might be time for Americans to think in terms of universal standards.
Consider it like this. An ounce of gold is 32 g/t and one-half ounce is about 16 g/t and a quarter ounce would be about 8 g/t and so on and so forth. And then think in terms of any distance over 25 feet that has 3-4 g/t deserves notice.
Furthermore; at this point, Mt. Kare has a much higher profile than does Lewis in Nevada so we tend to gravitate to those kinds of projects. Needless to say, I want you to keep an eye out on the progress of this current Lewis drill program being undertaken in Nevada and right next door to Nevada’s Phoenix Fortitude Complex.
People need to begin relating to the idea that the numbers coming out of PNG and Mt Kare are similar to the numbers coming out of Lewis!
Madison has acquired a joint venture partner by way of Buffalo Gold to take the lead on the Mt. Kare Project. On both levels, technical and promotional, they have done an excellent job. Review the recent joint press releases put forth by both Madison and Buffalo and you’ll quickly understand the buzz. For instance:
Press Release dated September 21, 2006
Vancouver, B.C., September 21, 2006 - Buffalo Gold Ltd. (TSX-V: BUF.U; OTC-BB: BYBUF; FWB: B4K) is pleased to announce additional assay results from the diamond drilling program at the Mt. Kare Gold Project in Papua New Guinea. Specific highlights of the drill results include:
North-Western Roscoelite Zone
- 30.0 metres of 19.2 g/t gold in hole MK06-58
- Including 6.5 meters of 41.8 g/t gold
- 25.0 metres of 22.6 g/t gold in hole MK06-63
South-Western Roscoelite Zone
- 29.2 metres of 1.9 g/t gold in hole MK06-68
- And 24.5 metres of 2.5 g/t gold
- And 11.0 metres of 2.9 g/t gold
Press Release dated August 28, 2006
Vancouver, B.C., August 28, 2006 — Buffalo Gold Ltd. (TSX-V: BUF.U) is pleased to announce additional assay results from the diamond drilling program at the Mt. Kare Gold Project in Papua New Guinea. Highlights of the drill results include:
- 49.0 metres of 10.4 g/t gold in hole MK06-50
- Including 8.0 meters of 29.2 g/t gold
- 79.1 metres of 3.0 g/t gold in hole MK06-52
- 40.0 metres of 15.3 g/t gold in hole MK06-53
- Including 24.0 metres 24.0 g/t gold
- 26.6 metres of 3.7 g/t gold in hole MK06-56
(Hole abandoned while still in mineralization)
Now if you go to the website and review these press releases you’ll understand the Roscoelite Zone is only one area in this rather large project. By all means review the jointly released news put out recently and mentioned above in this piece.
Needless to say, these are excellent results. But more importantly, the programs are on going. Though management is rather tight lipped about the immediate plans, as well they should be, the idea is to aggressively explore Mt. Kare and to eventually present a feasibility study. Aggressively explore means to have as many drill rigs as are available on the property delineating the deposit.
It is my understanding that Buffalo is trying to put a third drill rig on the property and keep on drilling!
Conclusion
Madison has reached a milestone closing over a dollar. I’m moving my buy target up to $2.25 US because the Mt. Kare Project in PNG is well in hand and Madison is “cashed up” and ready to aggressively proceed at the Lewis Property in Nevada.
A drill program has been on going at Lewis and the drill results are not yet available because there has been a backlog at the assay labs.
However, results are anticipated in early November 2006 from the first of the drill holes with additional assays following shortly thereafter.
But there will be results trickling out of Nevada between now and February; perhaps even longer.
With a terrific JV partner in Buffalo Gold, Madison is free to focus on the long awaited Lewis Property and now they have the financial wherewithal to do it.
Additionally, while all this is going on, the same group that is running Madison Minerals has a tiger by the tail down in Africa by way of the Sabodala Project.
It has taken a good deal of hard work by all parties involved but I for one am going to stick around and see how this all pans out—if you’ll pardon the pun.
Until next time,
D. Stewart Armstrong
Posted by D.Stewart Armstrong in Articles