Lincoln Gold to convert Rogers loan into note units

Executive Summary

• Lincoln Gold Mining Inc. has agreed to convert a previously announced shareholder loan from director Ian Rogers into convertible note units with a principal amount of $200,000.
• The transaction involves the issuance of unsecured convertible debentures and common share purchase warrants, subject to TSX Venture Exchange approval and potential disinterested shareholder approval due to control person implications.
• Proceeds are intended for mineral lease payments, Bureau of Land Management fees, and working capital.

Key Details

• Transaction Structure: Conversion of shareholder loan into convertible note units.
• Principal Amount: $200,000.
• Instrument Composition: Each note unit consists of one unsecured convertible debenture and common share purchase warrants.
• Warrant Terms:
  • Quantity: 1,000,000 warrants (calculated as principal divided by conversion price).
  • Exercise Price: $0.20 per common share.
  • Term: 36 months from issuance.
  • Right: Exercisable into one common share per warrant.
• Conversion Terms:
  • Conversion Price: $0.20 per common share.
  • Maturity Date: 36 months from issuance.
  • Maximum Issuable Shares: 1,000,000 common shares upon full conversion.
  • Condition: Conversion subject to TSX Venture Exchange approval for creation of a new control person.
• Interest:
  • Rate: 18% per annum.
  • Payment: Payable at maturity.
  • Optional Conversion: Company may elect to convert accrued interest into common shares at the closing price on the last trading day prior to announcement.
• Use of Proceeds: Completion of required mineral lease, Bureau of Land Management, and other payments for Nevada operations, plus immediate working capital.
• Fees: No finders' fees paid.
• Hold Period: Four-month hold period under Canadian securities laws and exchange policies.
• Regulatory/Control Issues:
  • Mr. Rogers currently holds 4,942,000 common shares (20.70% - 20.77% of issued/outstanding).
  • Post-transaction, full conversion/exercise would increase his holding to 8,942,000 shares (~32.08%).
  • Disinterested shareholder approval is required if the transaction creates a new control person.
  • Company intends to apply for exemptive relief to complete issuance prior to shareholder approval.
  • If relief is granted, Mr. Rogers will be restricted from converting/exercising beyond 19.99% ownership until approvals are obtained.
• Related-Party Status: Transaction is a related-party transaction under MI 61-101. Exemptions from formal valuation and minority shareholder approval are relied upon as the fair market value does not exceed 25% of market capitalization.
• Early Warning Report: Mr. Rogers will file an early warning report with Canadian securities regulatory authorities.

Notable Quotes

• None provided in the text.