VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 2, 2011) - Lincoln Mining Corporation (TSX VENTURE:LMG) –
A Strategic Partnership for Lincoln Mining Corporation
Mr. Saxton comments:
On March 31, 2011, Lincoln Mining Corporation ("Lincoln") issued a press release announcing that it had entered into an exploration financing agreement of up to $10 million with Elgin Mining Inc. ("Elgin"). We have received many comments from Lincoln shareholders, and the investment community, regarding the agreement and consider this to be an opportune time to elaborate on Lincoln's strategic partnership with Elgin (and its CEO, Mr. Bob Buchan) and what it means for Lincoln and why Lincoln management believes it is a milestone deal for the Company and its shareholders.
The proposed agreement originated with a visit to the Oro Cruz property by Mr. Buchan and me. Mr. Buchan immediately recognized the potential of the project, which he reiterates in the joint news releases of Elgin and Lincoln dated March 31, 2011.
I would like to point out some very positive features of this partnership:
- Mr. Buchan was quick in making the decision to collaborate with Lincoln in the exploration and development of the Oro Cruz and La Bufa projects. Mr. Buchan has a track record of success with developing gold companies and is the founder and CEO of Kinross Gold Corp. (which is currently one of the largest gold companies in the world with a market capitalization of $16 billion) and most recently Allied Nevada Gold Corp., of which Mr. Buchan is Executive Chair, (currently trading at around $40 per share). Lincoln's transaction is specifically with Elgin, which I am sure Mr. Buchan aims to make equally successful.
- Initially, Elgin has committed to invest $4 million in Lincoln by investing $3 million on the Oro Cruz property in California and $1 million on the La Bufa project in Mexico. No Lincoln shares will be issued for this investment, thereby creating absolutely no dilution to Lincoln shareholders. It should be emphasized that if Lincoln were to carry out this exploration itself by raising the required funds through an equity financing, it would add another 35 to 40 million shares to Lincoln's total. Only after this initial investment has been made by Elgin will it then have the option to earn into the projects to a maximum of 60%.
- We believe that both the Oro Cruz and La Bufa have the potential to develop into significant gold deposits. If exploration success results in Elgin earning its maximum position Lincoln would retain a 40% interest in project(s) of considerable size, at substantially reduced cost. If this happens then we will have accomplished a great deal for our shareholders. A successful exploration program will enable Elgin to work with Lincoln to ensure that the projects are developed and funded to production and with a minimal dilution to Lincoln's stock. We believe that by the time Elgin's earn-in has occurred, substantial value will be added to the project(s) assets as a result of the investment which would provide Lincoln with an outstanding partner for future production.
- Exploration will continue at La Bufa. Management believes the potential for the discovery of a large resource exists at the La Bufa project. Gammon Gold has recently reported a multi-million gold and silver inferred resource on their adjacent property (News Release February 28, 2011). We know that the main geological structures that have resource bearing potential cut across both the Gammon Gold ground and the Lincoln ground. We plan to start drilling on the La Bufa property in early June. Also note that permitting for drilling at Oro Cruz is in progress and drilling is anticipated later in the year.
As a result of Elgin's investment and with continuing exploration success, we anticipate Lincoln will emerge as a stronger presence in the junior gold market.
In closing, we would like to thank our shareholders for their continued support; our management team is committed to developing projects and new opportunities with maximum shareholder value in mind.
Lincoln Mining Corp. is a Canadian precious metals exploration and development company with several projects in various stages of exploration and development which include the Oro Cruz gold property in California, the Pine Grove gold property in Nevada and the La Bufa gold-silver property in Mexico. In the United States, the Company operates under Lincoln Gold US Corp., a Nevada corporation.
On behalf of Lincoln Mining Corporation
Paul Saxton, President & CEO
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Contact Information:
Investor Relations
604-688-7377
604-688-7307 (FAX)
www.lincolnmining.com