Mar. 31, 2011 (Canada NewsWire Group) --
TORONTO AND VANCOUVER, March 31 /CNW/ - Lincoln Mining Corporation, TSX-V: LMG ("Lincoln") and Elgin Mining Inc., TSX-V: ELG ("Elgin") are pleased to announce that they have entered into an option agreement (the "Agreement") granting Elgin the exclusive right and option to acquire up to a 60% undivided interest in each of Lincoln's Oro Cruz and La Bufa properties (collectively the "Properties" and individually a "Property") by funding expenditures totaling $10,000,000 over a maximum four year period.
Pursuant to the Agreement, Elgin shall as a binding commitment (the "Initial Exploration Commitment") fund an initial aggregate amount of $4,000,000 in exploration expenditures on the Properties ($3,000,000 on Oro Cruz and $1,000,000 on La Bufa) over a period of up to two years from the date of the Agreement prior to earning any interest in the Properties. On the date that the Initial Exploration Commitment has been satisfied (the "Option Acquisition Date"), Elgin will have acquired the exclusive right and option to earn up to a 60% interest in each Property on the basis of a 20% interest earned in a Property for each $1,000,000 in additional expenditures funded on the Property over a two year period following the Option Acquisition Date. If within two years of the Option Acquisition Date, Elgin fails to fund at least $1,000,000 in respect of a Property, Elgin shall acquire no interest in that Property. The parties have agreed to negotiate and enter into a formal option and joint venture agreement, based on the terms of the Agreement, following the Option Acquisition Date. Lincoln will continue to be the operator of the Properties until such time as Elgin has earned a greater than 50% interest in a Property, at which time Elgin will be entitled to be the operator of such Property.
The Agreement is subject to acceptance by the TSX Venture Exchange.
Mr. Paul Saxton, Lincoln's President and CEO, commenting on the Agreement, said "Lincoln is extremely pleased with the arrangement with Elgin. Not only does it provide a strategic partnership with a proven major mine developer but it allows Lincoln to advance its Oro Cruz and La Bufa projects with minimum dilution to our shareholders."
Mr. Robert Buchan, Elgin's President and CEO, also commenting on the Agreement, said "these are both projects with a legitimate opportunity to be enhanced with further drilling, and the Oro Cruz property is, in my opinion an underexplored asset that has the potential for significant near term production".
Overview of the Relevant Properties:
Lincoln acquired a 100% interest in the 20 lode claims that cover the Oro Cruz gold prospect located in Imperial County, California in February 2010. Since then Lincoln has staked an additional 131 claims for a total of 151 lode claims covering approximately 3,000 acres.
Oro Cruz is a pre-development stage gold project located in the Tumco mining district in the Cargo Muchacho Mountains, Imperial County, CA. The property is approximately 14 miles southeast of the operating Mesquite gold mine (New Gold Inc.) and is adjacent to the American Girl gold mine (past producer).
Historic mining was conducted during 1890-1916 and again in 1932-1941; production exceeded 150,000 ozs gold. In the mid-1990s, the property was drilled and developed by MK Gold Company. MK Gold produced 61,000 ozs gold during a 12 month period in 1995 and 1996, from both open-pit and underground mining. Mining ceased in 1996 due to low gold prices under $300 per ounce. Prior to cessation, MK Gold was conducting a significant pit wall push back to reach in-place "ore." Gold mineralization remains exposed in the open-pit and in underground workings and numerous targets remain untested.
Lincoln believes that the idle Oro Cruz mine has near-term potential to be reopened and expanded into a producing gold mine. A National Instrument 43-101 ("NI 43-101") technical report (filed on September 21, 2010) compiled by Tetra Tech, Inc. reported an inferred gold resource of 341,800 ozs. with an average grade of 0.070 opt in 4,835,000 tonnes (refer to Lincoln's news release dated September 21, 2010 available at www.sedar.com).
The La Bufa property is a mid-stage, gold-silver exploration project within the Sierra Madre Occidental in southwestern Chihuahua State, Mexico. The property consists of four concessions (5,700 acres) covering a large part of the Guadalupe y Calvo mining district completely surrounding Gammon Gold's Guadalupe y Calvo project. The principal targets are gold-silver epithermal quartz-breccia veins and stockworks. Reported historic production in the district is 2 million ozs gold and 28 million ozs silver.
On February 10, 2009, Lincoln filed an amended and restated NI 43-101 technical report on the La Bufa property prepared by Richard W. Bybee, dated January 5, 2009. The report confirms significant gold-silver mineralization at La Bufa and recommends continued exploration. A total of 17 core holes (5,478 m) have been drilled in the southern portion of the La Bufa property. Encouraging drill hole intercepts ranged up to 2.5 m in width and graded from 4.12 gpt to 10.7 gpt gold and 281 gpt to 516 gpt silver (refer to Lincoln's news release dated June 23, 2008 available at www.sedar.com).
For complete information on these and other Lincoln properties, please refer to Lincoln's website at www.lincolnmining.com.
Mr. Jeffrey Wilson, Lincoln's Vice President Exploration and a "qualified person" within the meaning of NI 43-101, has reviewed and approved the scientific and technical information contained in this news release.
About Lincoln Mining Corporation
Lincoln 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, Lincoln operates under Lincoln Gold US Corp., a Nevada corporation.
For further information, please contact Lincoln's Investor Relations at 604-688-7377 or visit Lincoln's website at www.lincolnmining.com.
About Elgin Mining Inc.
Elgin is located in Toronto, Ontario and is currently evaluating the potential acquisition of assets in the global natural resource sector. Mr. Robert Buchan, President and CEO of Elgin, has over 35 years of experience in the North American mining sector. He was founder and President and Chief Executive Officer of Kinross Gold Corporation until 2005. For additional information, visit www.elginmining.com.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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 FINANCING PLANS AND EXPLORATION AND DEVELOPMENT OBJECTIVES OF LINCOLN AND ELGIN 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. ACCORDINGLY, INVESTORS SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM LINCOLN'S OR ELGIN'S PLANS OR EXPECTATIONS INCLUDE THE RISK THAT ACTUAL RESULTS OF FUTURE EXPLORATION WORK WILL NOT SUPPORT LINCOLN'S OR ELGIN'S EXPECTATIONS REGARDING MINERALIZATION AND DEVELOPMENT POTENTIAL IN RESPECT OF A PROPERTY, PROJECT DELAYS AND COST OVERRUNS, MINING ACCIDENTS, RISKS ASSOCIATED WITH JOINT VENTURES AND THE ABILITY TO CONCLUDE JOINT VENTURE AGREEMENTS ON FAVORABLE TERMS, AVAILABILITY OF CAPITAL AND FINANCING, GENERAL ECONOMIC, MARKET, ENVIRONMENTAL OR BUSINESS CONDITIONS, FLUCTUATIONS IN COMMODITY PRICES AND FOREIGN EXCHANGE RATES, REGULATORY CHANGES, TIMELINES OF GOVERNMENT OR REGULATORY APPROVALS AND OTHER RISKS DETAILED HEREIN AND FROM TIME TO TIME IN THE FILINGS MADE BY LINCOLN AND ELGIN. LINCOLN AND ELGIN UNDERTAKE NO OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS OR INFORMATION IF CIRCUMSTANCES OR MANAGEMENT'S ESTIMATES OR OPINIONS SHOULD CHANGE EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LAWS. THE READER IS CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS AND INFORMATION.
please contact Brian Morales, Chief Financial Officer of Elgin Mining Inc. at (416) 640-1930 or firstname.lastname@example.org