Vancouver, British Columbia – Paul Saxton, President of Lincoln Mining Corporation, TSX-V: LMG (“Lincoln” or the “Company”) is pleased to announce that pursuant to an Oro Cruz Letter Agreement (the “Letter Agreement”) dated February 28, 2019, the Company, through its subsidiary, Lincoln Gold US Corp. (“Lincoln US”), granted to Demerara Gold Corp. (“Demerara”), a non-reporting British Columbia company, and Bell Mountain Exploration Corp. (“Bell Mountain”), a wholly-owned subsidiary of Eros Resources Corp., the right to enter into a formal Option and Joint Venture Agreement (the “JV Agreement”) until June 30, 2019, for the exploration and development of the Oro Cruz property located in Imperial County, southeastern California. To earn a 75% interest in the Oro Cruz gold project, Demerara and Bell Mountain will have to spend approximately USD $2.1 million in property payments, exploration and development over the next five years.
As consideration for granting the due diligence period, Demerara and Bell Mountain will pay Lincoln USD $10,000 and commit to purchasing CAD $35,000 worth of securities in the Company’s next private placement. If exercised, the JV Agreement will allow Demerara and Bell Mountain together to earn up to an undivided 75% interest in the Oro Cruz gold project by funding payments to ADGIS, Inc. (“ADGIS”) and incurring the costs of ongoing exploration and development at the Oro Cruz property.
By Letter Agreement dated May 1, 2018, Lincoln and Lincoln US acquired an option to purchase from ADGIS, Inc. of Reno, Nevada, a 100% interest in the 20 Hercules lode claims (“Hercules Property”) located in Imperial County, California, subject to a 2% Net Smelter Return royalty and a 1% Net Smelter Return royalty within a 1 mile area of interest; both royalties are payable to ADGIS. Lincoln US is the recorded holder of other mining tenures and claims located in Imperial County, California and that, together with the Hercules Property, comprise the Oro Cruz properties gold project (the “Oro Cruz Properties”).
Demerara entered into a memorandum of understanding with Lincoln in September, 2018 giving it an exclusive period to investigate the Oro Cruz Properties until February 28, 2019 and then to enter into the JV Option for the Oro Cruz Properties.
Recently Lincoln US staked an additional 120 lode claims and 13 placer claims in around the Oro Cruz property. The expanded claim block now consists of 251 (“OC”) lode claims, 13 (“OCP”) placer claims, plus 20 (“Hercules”) lode claims under the purchase option with ADGIS. The property has nearly doubled in size and is now comprised of approximately 5,420 acres or nearly 8.5 square miles. The new claim staking was conducted to cover favorable geology in the Cargo Muchacho Mountains in the immediate vicinity of past producers American Girl, American Boy, Padre y Madre, and Oro Cruz gold mines. This gold rich area falls within the northern U.S. portion of the Caborca Orogenic Gold Belt that extends southward into northern Mexico. Lincoln also staked the old leach pads at the American Girl and Padre y Madre mines. These pads are thought to still retain significant resources subject to possible reprocessing.
Upon the exercise of the JV Agreement, the joint venture will cover the OC, the OCP and the Hercules claims and as well as any additional mining interests or mineral properties acquired by either party within five miles of the Lincoln US claims.
The Terms of the Option and Joint Venture Agreement is made up of two (2) earn-in components:
First Component to earn a 51% interest in the Oro Cruz
- A Cash Payment: Demerara and Bell Mountain will pay all yearly cash payments due to ADGIS as per the ADGIS Letter Agreement dated May 1, 2018, through to the year 2023 for a total of USD $400,000. Demerara and Bell Mountain will pay Lincoln a total of USD $25,000 yearly through to 2023 for a total of USD $100,000.
- By June 30, 2019, and on the anniversary days of the following four (4) years Demerara and Bell Mountain will together commit to pay the annual Oro Cruz BLM and County fees before Sept 1. If this commitment is not made by June 30 of each year, then Lincoln will either pay these fees, or have the right to look for another partner to fund the payments and the Demerara and Bell Mountain JV Option will then be considered as terminated.
- Prior to December 31, 2019, Demerara and Bell Mountain shall spend USD $200,000 on exploration and development or other appropriate activities on the Oro Cruz properties.
- Prior to October 1, 2022, Demerara and Bell Mountain will spend an additional USD $800,000 in total on exploration and development or other appropriate activities on the Oro Cruz properties.
- Bell Mountain will be the operator of the activities.
- Demerara and Bell Mountain will share in the cost of running the Lincoln’s Carson City field office.
Second Component to earn an additional 24% interest in the Oro Cruz for a total of 75% interest
- Upon the completion of the initial cash and work commitments to earn a 51% interest, Demerara and Bell Mountain shall, at their discretion, have the right to earn an additional undivided 24% joint venture interest for work and/or payments totaling an additional USD $600,000.
- During the JV Option period, Lincoln must not sell or encumber any interest in the Oro Cruz Properties.
Lincoln Mining Corp. is a Canadian precious metals exploration and development company, with interests in the development-stage Pine Grove gold property in Nevada and the pre-development stage Oro Cruz gold property in California. In the United States, the Company operates under Lincoln Gold US Corp. and Lincoln Resource Group Corp., both are Nevada corporations. For further information, please contact Paul Saxton at 604-688-7377, or visit the Company’s website at www.lincolnmining.com.
On behalf of Lincoln Mining Corporation
Paul Saxton, President & CEO
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