VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/22/12 -- Lincoln Mining Corporation (TSX VENTURE: LMG) ("Lincoln" or the "Company") is pleased to announce that further to its news release of November 7, 2012, it has closed the transactions with Procon Mining and Tunnelling Ltd. ("Procon") as described below.
Convertible Debenture of $2,300,000
The Company has closed the private placement of a convertible debenture (the "Debenture") by the Company to Procon in an aggregate principal amount of $2,300,000, which is due and payable on November 22, 2015. The Debenture is convertible at any time, in whole or in part at the election of Procon, into up to 23,000,000 common shares of the Company on the basis of one common share for each $0.10 of principal. The Debenture bears interest at the rate of 6% per annum, calculated and payable monthly, on the outstanding principal amount. The Debenture is secured by a general security agreement granted by the Company.
A copy of the Debenture and the general security agreement will be filed under the Company's profile at www.sedar.com.
Private Placements of $1,100,000 and $500,000
The Company has closed the private placement of 22,000,000 common shares of the Company to Procon at a price of $0.05 per share for proceeds of $1,100,000.
The Company also closed a private placement of 10,000,000 common shares of the Company to Prairie Enterprises (Alberta) Inc., a private company controlled by Mr. Edward Yurkowski (who is the CEO, co-founder and a shareholder of Procon), at a price of $0.05 per share for proceeds of $500,000.
At the closing of the private placements, Procon holds approximately 29.0% of the Company's 158,860,203 issued and outstanding shares. On a partially-diluted basis assuming the exercise of the entire principal amount of the Debenture, Procon would hold approximately 37.9% of the Company's outstanding shares.
At the closing of the private placements, Mr. Yurkowski beneficially holds approximately 6.7% of the Company's issued and outstanding shares.
No finders fees or warrants were issued in connection with the private placements. All securities issued or issuable under the private placements (including the Debenture) will be subject to a four month hold period in Canada expiring on March 23, 2013, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.
Lincoln intends to use the proceeds raised from the private placements towards the purchase price for the acquisition of the Bell Mountain project (as described in the Company's news release dated September 5, 2012), to advance the work programs on its mineral projects and for general working capital purposes. With the completion of the Procon transactions, closing of the Bell Mountain acquisition is expected to occur by the end of November 2012.
At the closing of the private placements described above and as required by the Procon transactions, three incumbent directors of the Company resigned (Philip Walsh, Michael Price and Robert Elton), and the remaining directors appointed four nominee directors of Procon to the board resulting in Procon nominee directors constituting a majority of the board of directors of the Company. As a result, the board of directors of the Company is now comprised of the following persons:
Paul Saxton (President, CEO and Corporate Secretary) Andrew Milligan (independent director) Robert Cruickshank (independent director) Edward Yurkowski (Procon nominee) James Dales (Procon nominee) Yan Luo (Procon nominee) Yuhang Wang (Procon nominee)
Biographies of the Procon nominee directors were disclosed in the Company's information circular dated September 25, 2012, available on www.sedar.com.
Following closing, the Company's audit committee will be comprised of Andrew Milligan, Robert Cruickshank and James Dales, and the compensation committee will be comprised of Andrew Milligan, Robert Cruickshank and Edward Yurkowski.
The Company would like to thank Messrs. Elton, Price and Walsh for their service and ongoing support.
Pursuant to the terms of the Debenture, for so long as the Debenture is outstanding and held by Procon or an affiliate, the Company has agreed to include a majority of Procon nominee directors in management's list of nominee directors for election by shareholders at annual general meetings or otherwise.
United States Regulatory Filings
Lincoln and Procon intend to prepare and submit regulatory notifications in the US related to the closing of this transaction given Lincoln's US assets.
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 Pine Grove gold property in Nevada, the Oro Cruz gold property in California and the La Bufa gold-silver property in Mexico. In the United States, the Company operates under its two Nevada subsidiaries Lincoln Gold US Corp. and Lincoln Resource Group Ltd.
On behalf of Lincoln Mining Corporation
Paul Saxton, President & CEO
THIS PRESS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS OR INFORMATION. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS RELEASE, INCLUDING WITHOUT LIMITATION, STATEMENTS REGARDING FUTURE PLANS AND OBJECTIVES OF LINCOLN IN RELATION TO THE PROCON AND BELL MOUNTAIN TRANSACTIONS ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE VARIOUS RISKS AND UNCERTAINTIES. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL PROVE TO BE ACCURATE AND ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S PLANS OR EXPECTATIONS INCLUDE THE RISK THAT THE COMPANY WILL NOT RECEIVE ALL NECESSARY UNITED STATES REGULATORY APPROVALS IN RELATION TO THE PROCON AND BELL MOUNTAIN TRANSACTIONS AS PLANNED, OR THAT THE NECESSARY APPROVALS WILL REQUIRE MODIFICATIONS TO THE TERMS OF THE TRANSACTIONS; US REGULATORY REVIEW OF THE PROCON AND BELL MOUNTAIN TRANSACTIONS MAY RESULT IN REGULATORY ORDERS OR OTHER ACTION THAT MAY HAVE AN ADVERSE EFFECT ON THE BUSINESS, OPERATIONS OR ASSETS OF THE COMPANY IN THE UNITED STATES; THE RISK THAT ACTUAL RESULTS OF FUTURE EXPLORATION WORK, INCLUDING DRILL RESULTS AND RESULTS OF ENGINEERING AND METALLURGICAL STUDIES, WILL NOT SUPPORT THE COMPANY'S PLANS TO ADVANCE ITS NEVADA PROJECTS; THE UNCERTAINTY OF THE GEOLOGY, GRADE AND CONTINUITY OF MINERAL DEPOSITS (INCLUDING IN RESPECT OF THE BELL MOUNTAIN PROPERTY) AND THE RISK OF UNEXPECTED VARIATIONS IN MINERAL RESOURCES, GRADE AND/OR RECOVERY RATES; COST OVERRUNS AND PROJECT DELAYS; AVAILABILITY OF CAPITAL AND FINANCING REQURIED TO ADVANCE THE COMPANY'S PROJECTS; GENERAL ECONOMIC, MARKET OR BUSINESS CONDITIONS; FLUCTUATING METAL PRICES; REGULATORY CHANGES; TIMELINES OF GOVERNMENT OR REGULATORY APPROVALS AND OTHER RISKS DETAILED HEREIN AND FROM TIME TO TIME IN THE FILINGS MADE BY THE COMPANY. THE COMPANY MAKES ALL REASONABLE EFFORTS TO UPDATE ITS CORPORATE MATERIAL, DOCUMENTATION AND FORWARD-LOOKING INFORMATION ON A TIMELY BASIS.
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Lincoln Mining Corporation