June 21, 2005
Room 4561
Kevin M. Stunder
President
Madison Explorations, Inc.
525 Seymour Street, Suite 807
Vancouver, BC, CANADA V6B 3H7
Re: Madison Explorations, Inc.
Form 10-SB filed May 4, 2005
File no. 0-51302
Dear Mr. Stunder,
We have reviewed your Form 10-SB and have the following
legal
comments. Accounting comments were mailed on June 9, 2005 under
separate cover, since we did not have a facsimile number for
Madison.
Where indicated, we think you should revise your document in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
As appropriate, please amend your registration statement in
response
to these comments. You may wish to provide us with marked copies
of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
Please file an amendment by June 29, 2005 to comply with the
staff`s comments. If the filing cannot be amended by that time to
comply with the staff`s comments, you should consider withdrawing
the
filing before it becomes effective by operation of law on July
3, 2005 and then refiling it at such time as the you can comply.
Please note that you should file the request for withdrawal by
June
30, 2005.
Part I
Item 1. Description of Business, pages 3-7
1. Describe the sale of your 20% interest in your Bulls Eye
project,
such as the parties involved (e.g., Echo Resources), the sales
price,
and any rights and responsibilities of Madison. Please file any
agreements as exhibits, such as the joint venture agreement.
2. Identify Scout Resources Inc. as a subsidiary and describe its
business. See Item 101 of Regulation S-B.
3. Please include the address of Madison`s website.
Acquisition Agreement, page 4
4. Please ensure that you have a materially complete description
of
the acquisition agreement so that the rights and responsibilities
of
each party are disclosed. The second paragraph of this section
states
that Madison will issue shares to Dr. Montgomery and Mr. Fu to
provide them with an amount equal to 10% of Madison`s outstanding
shares as of July 1, 2004. When is it expected that Madison will
be
issuing these shares? How will the value of the shares be
determined
upon issuance? Please briefly identify Mr. Fu and his relationship
to
Madison. When did Dr. Montgomery and Mr. Fu purchase the property
and
how much did they purchase it for? Disclose how it will determined
whether the results of the Work Program will be deemed
satisfactory
(or unsatisfactory) to the Vendor for purposes of Section 3.3.
Explain that the agreement requires Madison to loan the mine
development costs to be borne by Dr. Montgomery and Mr. Fu.
Exploration Program, pages 5-6
5. Please advise how the arrangements for compensating Montgomery
Consultants Ltd and Dr. Montgomery compare with rates paid to
unrelated persons doing the same work. File any consulting
agreements
as exhibits.
6. Beginning in the third paragraph of this section, you discuss
taking soil samples and testing them for the presence of a number
of
metals specified only by their chemical symbols. Please include
the
full names of these metals.
7. We note that Madison`s business is described, in the second
paragraph on page 3, as "diamond exploration in the Saskatchewan
area
of Canada." Please explain,
then, why you are testing for these metals. Are you also seeking
these in economically producible quantities? If so, please
disclose
this in the discussion on page 3.
8. Clarify, if true, that you have three part-time employees and
that
each employee intends to devote not more than 10% of his time to
Madison.
Item 2. Plan of Operation, pages 7-13
9. Please furnish us with a copy of the geological report as
supplemental information.
10. Please disclose, after the three point list, that even when
kimberlite is found, finding diamonds in the kimberlite is quite
rare
and finding them of commercial grade and in commercial quantities
is
rarer yet.
11. Please define technical terms such as "surficial" as used on
page
10.
12. We note that you have $30, 841 at December 31, 2004 from
advances
and contributions from your principal stockholders and the
proceeds
of a sale of a 20% interest in one of your claims (Bulls Eye).
Once
this registration statement becomes effective you will incur
material
costs associated with your reporting obligations. Here, or
elsewhere
as appropriate, discuss the costs associated with being a publicly
reporting company, which are in addition to the $2 million
necessary
in 2005 for the second phase of your exploration project, how you
intend to pay for these costs, and the consequences to investors
if
you fail to satisfy your reporting obligations.
24 Month Exploration Budget on new and future claims, pages 12-13
13. At the top of page 13, you disclose that you estimate that you
will need some $2,000,000 Canadian in order to conduct your full
exploration program through 2006. Please discuss how you intend
to
raise this amount of money.
Item 5. Directors, Executive Officers, Promoters, and Control
Persons, pages 16-20
Conflicts of Interest, pages 18-19
14. Please disclose what, if any, policy exists regarding
transactions between or among the various companies in which the
principals of Madison are involved.
Item 7. Certain Relationships, page 21
15. In Business, you note that you will use the services of
Montgomery Consultants, a related party, as well as other third
party
contractors, to conduct surveys and
exploration at the properties to begin to enable you to determine
whether you can extract and produce diamonds. Please describe any
services provided to date and file any agreement that you might
have
with Dr. Montgomery`s firm.
Part II
Item 1. Market Price for Common Equity and Related Stockholder
Matters, 23-25
Market Information, pages 23-24
16. Clarify who assigned a trading symbol of MDEX to you.
17. Please explain the reason for the inclusion of the discussion
of
the requirements for the NASDAQ Smallcap market in the two
paragraphs
at the top of page 24 or delete them.
Item 4. Recent Sales of Unregistered Securities, page 26
18. The table shows a total of 59, 770,000 shares of Madison`s
after-
split common issued to Haskins and Stunder while the Security
Ownership of Certain Beneficial Owners and Management on page 16
shows them as owning a total of 64,070,000 shares, a difference of
4,300,000 shares. Please explain.
19. You disclose only one issuance the past three years -- 59
million
post-split shares on June 2, 2004 to two individuals, yet you have
195 shareholders. Please advise. See Item 701 of Regulation S-B.
20. We are unclear why certifications were filed for this Form 10-
SB
when they are only required for annual and quarterly reports. See
Exchange Act Rule 13a-14. Please advise or revise.
Exhibits
21. Your bylaws are related to Madison-Taylor General Contractors,
Inc. rather than Madison Explorations. Please advise.
Closing
You may contact Babette Cooper at (202) 551-3396 or Terence
O`Brien, the Accounting Branch Chief at (202) 551-3355 if you have
questions regarding comments
regarding the financial statements and related matters. Please
contact Hugh Fuller at (202) 551-3853 or me at (202) 551-3730 with
any other questions.
Sincerely,
Barbara C. Jacobs
Assistant Director