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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB/AAmendment No. 1

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended:**December 31, 2006**

[   ]  TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 0-25827

LINCOLN GOLD CORPORATION(Name of small business issuer in its charter)

|NEVADA                                           | 88-0419475                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|Suite 350, 885 Dunsmuir Street                   |                                     
|Vancouver, British Columbia, Canada              | V6C 1N5                             
|(Address of principal executive offices)         | (Zip Code)                          

Issuers telephone number: (604) 688-7377

Securities registered under Section 12(b) of the Exchange
Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Not Applicable      | Not Applicable                           

Securities registered under Section 12(g) of the Exchange
Act:Common Stock, $0.001 par value(Title of
class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), 
  and (2) has been subject to such filing requirements for the past 90 days. Yes [X] 
   No [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. [  
]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ 
 ]   No [X]

State issuers revenues for its most recent fiscal year $NIL

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked price of such
common equity, as of a specified date within the past 60 days. (See
definition of affiliate in Rule 12b-2of the Exchange Act.)
$3,296,667 as of March 26, 2007

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. 43,656,666
shares of common stock as of March 26, 2007

Transitional Small Business Disclosure Format (check one): Yes
[   ]   No [X]

1 of 6

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EXPLANATORY NOTE

This Amendment No. 1 to Form 10-KSB hereby amends the Companys
original Annual Report on Form 10-KSB for the year ended December 31, 2006,
originally filed with the Securities and Exchange Commission on April 2, 2007
(the Original Form 10-KSB), as follows:

- a signed copy of the Report of our independent public accountants, Manning
  Elliott LLP, Chartered Accountants, dated March 22, 2007, is included in this
  Amendment No. 1 to our Form 10-KSB. The signed Report was inadvertently not
  included in the Form 10-KSB; and
- the Companys audited financial statements for the years ended December 31,
  2006 and 2005 are amended by amending Note 8 entitled Stock Options to
  include the disclosures required by SFAS 123(R), paragraph 84.

2 of 6

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ITEM
7.           FINANCIAL
STATEMENTS

Our audited consolidated financial statements, as set forth
below, are included with this Amendment No. 1 to our Annual Report on Form
10-KSB:

|                                                                                                                                                                             | PAGE
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                                             |     
|Report
      of Independent Registered Accounting Firm                                                                                                                       | F-1 
|                                                                                                                                                                             |     
|Consolidated
      Balance Sheets, December 31, 2006 and 2005                                                                                                                | F-2 
|                                                                                                                                                                             |     
|Consolidated
      Statements of Operations for the years ended December 31, 2006 and 2005
      and for the period from inception (September 25, 2003) to December 31, 2006 | F-3 
|                                                                                                                                                                             |     
|Consolidated
      Statements of Cash Flows for the years ended December 31, 2006 and 2005
      and for the period from inception (September 25, 2003) to December 31, 2006 | F-4 
|                                                                                                                                                                             |     
|Consolidated
      Statements of Stockholders Equity (Deficit)
      for the period from inception (September 25, 2003) to December 31, 2006                                | F-5 
|                                                                                                                                                                             |     
|Notes
      to the Consolidated Financial Statements                                                                                                                         | F-6 

3 of 6

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Report of Independent Registered Public Accounting Firm

To the Directors and Stockholders 
  Lincoln Gold Corporation 
  (An Exploration Stage Company)

We have audited the accompanying consolidated balance sheets
  of Lincoln Gold Corporation as of December 31, 2006 and 2005, and the related
  consolidated statements of operations, cash flows and stockholders' equity (deficit)
  for the years then ended and accumulated from September 25, 2003 (Date of Inception)
  to December 31, 2006. These financial statements are the responsibility of the
  Company's management. Our responsibility is to express an opinion on these financial
  statements based on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audits to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Lincoln Gold Corporation
  as of December 31, 2006 and 2005, and the results of its operations and its
  cash flows for the years then ended and accumulated from September 25, 2003
  (Date of Inception) to December 31, 2006 in conformity with accounting principles
  generally accepted in the United States.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 1 to the
  financial statements, the Company has not generated any revenue, has a working
  capital deficiency, and has incurred significant operating losses since inception.
  These factors raise substantial doubt about the Companys ability to continue
  as a going concern. Managements plans in regard to these matters are also
  discussed in Note 1. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.

*/s/ Manning
  Elliott LLP*

CHARTERED ACCOUNTANTS

Vancouver, Canada

March 22, 2007

F-1

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Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Consolidated Balance Sheets 
  (Expressed in U.S. dollars)

|                                                                            |  | December 31, |   |  | December 31, |  
|--------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                            |  | 2006         |   |  | 2005         |  
|                                                                            |  | $            |   |  | $            |  
|                                                                            |  |              |   |  |              |  
|ASSETS                                                                      |  |              |   |  |              |  
|Current Assets                                                              |  |              |   |  |              |  
|Cash                                                                        |  | 21,961       |   |  | 132,806      |  
|Prepaid
      expenses and deposits                                         |  | 4,893        |   |  | 11,302       |  
|Total Current Assets                                                        |  | 26,854       |   |  | 144,108      |  
|Property and Equipment
      (Note 3)                                       |  | 4,440        |   |  | 7,328        |  
|Total Assets                                                                |  | 31,294       |   |  | 151,436      |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                              |  |              |   |  |              |  
|Current Liabilities                                                         |  |              |   |  |              |  
|Accounts payable                                                            |  | 35,467       |   |  | 20,474       |  
|Accrued liabilities                                                         |  | 14,990       |   |  | 12,097       |  
|Due to related parties (Note 5(b))                                          |  | 6,760        |   |  | 8,080        |  
|Note payable (Note 6)                                                       |  | 100,000      |   |  | 100,000      |  
|Total Liabilities                                                           |  | 157,217      |   |  | 140,651      |  
|Commitments and Contingencies (Note 1 and 4)                                |  |              |   |  |              |  
|Stockholders Equity (Deficit)                                              |  |              |   |  |              |  
|Common Stock, 100,000,000 shares authorized,
      $0.001 par value;        |  |              |   |  |              |  
|42,990,000 and 41,865,000 shares issued and outstanding,
      respectively |  | 42,990       |   |  | 41,865       |  
|Additional Paid-in Capital                                                  |  | 3,294,863    |   |  | 3,092,488    |  
|Common Stock Subscribed (Note 7(a))                                         |  | 73,333       |   |  | -            |  
|Deficit Accumulated During the Exploration Stage                            |  | (3,537,109   | ) |  | (3,123,568   | )
|Total Stockholders
      Equity (Deficit)                                  |  | (125,923     | ) |  | 10,785       |  
|Total Liabilities and Stockholders Equity (Deficit)                        |  | 31,294       |   |  | 151,436      |  

F-2

(The accompanying notes are an integral part of these consolidated
  financial statements)

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Consolidated Statements of Operations 
  (Expressed in U.S. dollars)

|                                                   |  | Accumulated         |   |  |              |   |  |              |  
|-------------------------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                                   |  | From                |   |  |              |   |  |              |  
|                                                   |  | September 25,       |   |  |              |   |  |              |  
|                                                   |  | 2003                |   |  | Year         |   |  | Year         |  
|                                                   |  | (Date of Inception) |   |  | Ended        |   |  | Ended        |  
|                                                   |  | to December 31,     |   |  | December 31, |   |  | December 31, |  
|                                                   |  | 2006                |   |  | 2006         |   |  | 2005         |  
|                                                   |  | $                   |   |  | $            |   |  | $            |  
|Revenue                                            |  | -                   |   |  | -            |   |  | -            |  
|Expenses                                           |  |                     |   |  |              |   |  |              |  
|Depreciation                                       |  | 4,866               |   |  | 2,888        |   |  | 1,978        |  
|Foreign exchange loss                              |  | 5,833               |   |  | 2,043        |   |  | 2,115        |  
|General and administrative
      (Note 5(a))       |  | 2,437,402           |   |  | 294,656      |   |  | 730,433      |  
|Impairment of mineral properties (Note
      2(h)) |  | 65,000              |   |  | 10,000       |   |  | 55,000       |  
|Mineral exploration                                |  | 899,504             |   |  | 95,852       |   |  | 529,017      |  
|Total Expenses                                     |  | 3,412,605           |   |  | 405,439      |   |  | 1,318,543    |  
|Loss From Operations                               |  | (3,412,605          | ) |  | (405,439     | ) |  | (1,318,543   | )
|Other Income (Expense)                             |  |                     |   |  |              |   |  |              |  
|Accounts payable written
      off                 |  | 33,564              |   |  | -            |   |  | 33,564       |  
|Interest income                                    |  | 11,005              |   |  | 2,591        |   |  | 8,414        |  
|Interest expense                                   |  | (47,721             | ) |  | (10,693      | ) |  | (17,981      | )
|                                                   |  | (3,152              | ) |  | (8,102       | ) |  | 23,997       |  
|Net Loss                                           |  | (3,415,757          | ) |  | (413,541     | ) |  | (1,294,546   | )
|Net Loss Per Share
       Basic and Diluted       |  |                     |   |  | (0.01        | ) |  | (0.03        | )
|Weighted Average Shares Outstanding                |  |                     |   |  | 42,366,000   |   |  | 41,079,000   |  

F-3

(The accompanying notes are an integral part of these consolidated
  financial statements)

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Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Consolidated Statements of Cash Flows 
  (Expressed in U.S. dollars)

|                                                         |  | Accumulated         |   |  |              |   |  |              |  
|-------------------------------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                                         |  | From                |   |  |              |   |  |              |  
|                                                         |  | September 25, 2003  |   |  | Year         |   |  | Year         |  
|                                                         |  | (Date of Inception) |   |  | Ended        |   |  | Ended        |  
|                                                         |  | to December 31,     |   |  | December 31, |   |  | December 31, |  
|                                                         |  | 2006                |   |  | 2006         |   |  | 2005         |  
|                                                         |  | $                   |   |  | $            |   |  | $            |  
|Operating Activities                                     |  |                     |   |  |              |   |  |              |  
|Net loss                                                 |  | (3,415,757          | ) |  | (413,541     | ) |  | (1,294,546   | )
|Adjustments to reconcile net loss
      to net cash used |  |                     |   |  |              |   |  |              |  
|in operating activities:                                 |  |                     |   |  |              |   |  |              |  
|Accounts
      payable written off                       |  | (33,564             | ) |  | -            |   |  | (33,564      | )
|Depreciation                                             |  | 4,866               |   |  | 2,888        |   |  | 1,978        |  
|Impairment
      of mineral properties                   |  | 65,000              |   |  | 10,000       |   |  | 55,000       |  
|Stock-based compensation                                 |  | 1,218,996           |   |  | 73,333       |   |  | 108,000      |  
|Changes in operating assets and
      liabilities:       |  |                     |   |  |              |   |  |              |  
|Prepaid expenses and deposits                            |  | (4,893              | ) |  | 6,409        |   |  | (11,302      | )
|Account payable
      and accrued liabilities            |  | (18,349             | ) |  | 17,886       |   |  | (47,130      | )
|Due to related parties                                   |  | 6,760               |   |  | (1,320       | ) |  | (219         | )
|Net Cash Used in Operating Activities                    |  | (2,176,941          | ) |  | (304,345     | ) |  | (1,221,783   | )
|Investing Activities                                     |  |                     |   |  |              |   |  |              |  
|Cash acquired on acquisition
      of subsidiary         |  | 68                  |   |  | -            |   |  | -            |  
|Mineral property acquisition costs                       |  | (55,000             | ) |  | -            |   |  | (55,000      | )
|Purchase of property and equipment                       |  | (9,306              | ) |  | -            |   |  | (9,306       | )
|Net Cash Flows Used
      in Investing Activities        |  | (64,238             | ) |  | -            |   |  | (64,306      | )
|Financing Activities                                     |  |                     |   |  |              |   |  |              |  
|Advances from related parties                            |  | 4,180               |   |  | -            |   |  | -            |  
|Repayment of advances from
      related parties         |  | (4,180              | ) |  | -            |   |  | (4,180       | )
|Proceeds from loan payable                               |  | 46,000              |   |  | -            |   |  | -            |  
|Repayment of loan payable                                |  | (46,000             | ) |  | -            |   |  | (46,000      | )
|Issuance of note payable                                 |  | 100,000             |   |  | -            |   |  | (100,000     | )
|Proceeds from issuance
      of common stock             |  | 2,226,850           |   |  | 215,000      |   |  | 1,483,500    |  
|Share
      issuance costs                               |  | (63,710             | ) |  | (21,500      | ) |  | (42,210      | )
|Net Cash Flows Provided by Financing Activities          |  | 2,263,140           |   |  | 193,500      |   |  | 1,291,110    |  
|Increase (Decrease) in Cash                              |  | 21,961              |   |  | (110,845     | ) |  | 5,021        |  
|Cash  Beginning of Period                               |  | -                   |   |  | 132,806      |   |  | 127,785      |  
|Cash  End of
      Period                               |  | 21,961              |   |  | 21,961       |   |  | 132,806      |  
|                                                         |  |                     |   |  |              |   |  |              |  
|Non-cash Investing and Financing Activities              |  |                     |   |  |              |   |  |              |  
|Shares issued for mineral property costs                 |  | 10,000              |   |  | 10,000       |   |  | -            |  
|                                                         |  |                     |   |  |              |   |  |              |  
|Supplemental Disclosures                                 |  |                     |   |  |              |   |  |              |  
|Interest paid                                            |  | 35,000              |   |  | -            |   |  | 35,000       |  
|Income tax paid                                          |  | -                   |   |  | -            |   |  | -            |  

F-4

(The accompanying notes are an integral part of these consolidated
  financial statements)

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Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Consolidated Statements of Stockholders Equity (Deficit) 
  For the period from September 25, 2003 (Date of Inception) to December 31, 2006
  (Expressed in U.S. dollars)

|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  | Deficit     |   |  |            |  
|------------------------------------------ |  | ------------ | - |  | ------ | - |  | ------------- | - |  | --------- | - |  | ---------- |  |  | ----------- | - |  | ---------- | -
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  | Accumulated |   |  |            |  
|                                           |  | Common Stock |   |  | Stock  |   |  | Additional    |   |  | Common    |   |  | During the |  |  |             |  
|                                           |  |              |   |  |        |   |  | Subscriptions |   |  | Paid-in   |   |  | Stock      |  |  | Exploration |   |  |            |  
|                                           |  | Number of    |   |  | Amount |   |  | Receivable    |   |  | Capital   |   |  | Subscribed |  |  | Stage       |   |  | Total      |  
|                                           |  | Shares       |   |  | $      |   |  | $             |   |  | $         |   |  | $          |  |  | $           |   |  | $          |  
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Balance  September 25, 2003 (Date of      |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Inception)                                 |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | -          |  |  | -           |   |  | -          |  
|Shares issued for cash at $0.001 per       |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 850,000      |   |  | 850    |   |  | -             |   |  | -         |   |  | -          |  |  | -           |   |  | 850        |  
|Shares issued for cash at $0.01 per        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 1,550,000    |   |  | 1,550  |   |  | -             |   |  | 13,950    |   |  | -          |  |  | -           |   |  | 15,500     |  
|Net loss for the
      period              |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | -          |  |  | (16,319     | ) |  | (16,319    | )
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Balance, December 31, 2003                 |  | 2,400,000    |   |  | 2,400  |   |  | -             |   |  | 13,950    |   |  | -          |  |  | (16,319     | ) |  | 31         |  
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Adjustment to number of shares issued      |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|and outstanding as a result of
      the   |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|acquisition of Lincoln Gold Corp.:         |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Remove shares of
      Lincoln Gold        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Corp.                                      |  | (2,400,000   | ) |  | (2,400 | ) |  | -             |   |  | 2,400     |   |  | -          |  |  | -           |   |  | -          |  
|Add shares of Lincoln
      Gold           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Corporation (formerly
      Braden         |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Technologies
      Inc.)                   |  | 11,400,000   |   |  | 11,400 |   |  | -             |   |  | (11,400   | ) |  | -          |  |  | -           |   |  | -          |  
|Fair value of shares issued in             |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|connection
      with the acquisition of   |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Lincoln Gold Corp.                         |  | 24,000,000   |   |  | 24,000 |   |  | -             |   |  | (4,950    | ) |  | -          |  |  | (19,050     | ) |  | -          |  
|Net asset deficiency
      of legal parent |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|at date of reverse
      take-over         |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|transaction                                |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | -          |  |  | (102,302    | ) |  | (102,302   | )
|Shares issued for cash at $0.50 per        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 700,000      |   |  | 700    |   |  | -             |   |  | 349,300   |   |  | -          |  |  | -           |   |  | 350,000    |  
|Shares issued for cash at $0.30 per        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 2,300,000    |   |  | 2,300  |   |  | (528,000      | ) |  | 687,700   |   |  | -          |  |  | -           |   |  | 162,000    |  
|Stock-based compensation                   |  | -            |   |  | -      |   |  | -             |   |  | 1,037,663 |   |  | -          |  |  | -           |   |  | 1,037,663  |  
|Net loss for the year                      |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | -          |  |  | (1,691,351  | ) |  | (1,691,351 | )
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Balance, December 31, 2004                 |  | 38,400,000   |   |  | 38,400 |   |  | (528,000      | ) |  | 2,074,663 |   |  | -          |  |  | (1,829,022  | ) |  | (243,959   | )
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Proceeds from stock subscriptions          |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|receivable                                 |  | -            |   |  | -      |   |  | 528,000       |   |  | -         |   |  | -          |  |  | -           |   |  | 528,000    |  
|Shares issued for cash at $0.30 per        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 3,145,000    |   |  | 3,145  |   |  | -             |   |  | 940,355   |   |  | -          |  |  | -           |   |  | 943,500    |  
|Share issuance costs                       |  | -            |   |  | -      |   |  | -             |   |  | (42,210   | ) |  | -          |  |  | -           |   |  | (42,210    | )
|Shares issued for cash at $0.60 per        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share pursuant to the exercise
      of    |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|stock options                              |  | 20,000       |   |  | 20     |   |  | -             |   |  | 11,980    |   |  | -          |  |  | -           |   |  | 12,000     |  
|Shares issued for services at $0.36 per    |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 300,000      |   |  | 300    |   |  | -             |   |  | 107,700   |   |  | -          |  |  | -           |   |  | 108,000    |  
|Net loss for the year                      |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | -          |  |  | (1,294,546  | ) |  | (1,294,546 | )
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Balance, December 31, 2005                 |  | 41,865,000   |   |  | 41,865 |   |  | -             |   |  | 3,092,488 |   |  | -          |  |  | (3,123,568  | ) |  | 10,785     |  
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Shares issued for mineral property at      |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|$0.20 per share                            |  | 50,000       |   |  | 50     |   |  | -             |   |  | 9,950     |   |  | -          |  |  | -           |   |  | 10,000     |  
|Shares issued for cash at $0.20 per        |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|share                                      |  | 1,075,000    |   |  | 1,075  |   |  | -             |   |  | 213,925   |   |  | -          |  |  | -           |   |  | 215,000    |  
|Share issuance costs                       |  | -            |   |  | -      |   |  | -             |   |  | (21,500   | ) |  | -          |  |  | -           |   |  | (21,500    | )
|Shares to be issued                        |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | 73,333     |  |  | -           |   |  | 73,333     |  
|Net loss for the year                      |  | -            |   |  | -      |   |  | -             |   |  | -         |   |  | -          |  |  | (413,541    | ) |  | (413,541   | )
|                                           |  |              |   |  |        |   |  |               |   |  |           |   |  |            |  |  |             |   |  |            |  
|Balance, December 31, 2006                 |  | 42,990,000   |   |  | 42,990 |   |  | -             |   |  | 3,294,863 |   |  | 73,333     |  |  | (3,537,109  | ) |  | (125,923   | )

F-5

(The accompanying notes are an integral part of these consolidated
  financial statements)

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|1. | Nature of Operations and Continuance of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Lincoln Gold Corporation (the Company)
        was incorporated in the State of Nevada, USA, on February 17, 1999 under
        the name of Braden Technologies Inc. Effective March 26, 2004, the Company
        acquired 100% of the issued and outstanding shares of Lincoln Gold Corp.,
        a private company incorporated in the State of Nevada, USA, on September
        25, 2003. On April 6, 2004, the Company and its subsidiary, Lincoln Gold
        Corp., merged to form Lincoln Gold Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is an Exploration Stage Company,
        as defined by Statement of Financial Accounting Standard (SFAS)
        No. 7 Accounting and Reporting by Development Stage Enterprises.
        The Companys principal business is the acquisition and exploration
        of mineral resources. The Company has not presently determined whether
        its properties contain mineral reserves that are economically recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These consolidated financial statements
        have been prepared on a going concern basis, which implies the Company
        will continue to realize its assets and discharge its liabilities in the
        normal course of business. The Company has never generated revenues since
        inception and has never paid any dividends and is unlikely to pay dividends
        or generate earnings in the immediate or foreseeable future. The continuation
        of the Company as a going concern is dependent upon the continued financial
        support from its shareholders, the ability of the Company to obtain necessary
        equity financing to continue operations and to determine the existence,
        discovery and successful exploitation of economically recoverable reserves
        in its resource properties, confirmation of the Companys interests
        in the underlying properties, and the attainment of profitable operations.
        As at December 31, 2006, the Company has never generated any revenues,
        has accumulated losses of $3,415,756 since inception of the development
        stage, and has a working capital deficiency of $130,363. These factors
        raise substantial doubt regarding the Companys ability to continue
        as a going concern. These financial statements do not include any adjustments
        to the recoverability and classification of recorded asset amounts and
        classification of liabilities that might be necessary should the Company
        be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Management plans to complete private
        placement sales of the Companys shares in order to raise the funds
        necessary to pursue its plan of operation and fund working capital. The
        Company filed an amended SB-2 Registration Statement with the U.S. Securities
        and Exchange Commission, which was declared effective on July 14, 2006,
        to register and offer up to 2,857,143 units at a price of $0.20 per unit.
        Each unit consisted of one share of common stock, one-half Class A Warrant
        and one Class B Warrant. The first tranche of this offering closed on
        July 27, 2006 and consisted of 1,075,000 units at $0.20 per unit for net
        proceeds of $193,500 after stock issuance costs of $21,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-6

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------

| | c) | Basic and Diluted Net Income (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The Company computes net income (loss) per share in
        accordance with SFAS No. 128 Earnings per Share. SFAS No.
        128 requires presentation of both basic and diluted earnings per share
        (EPS) on the face of the consolidated statement of operations. Basic EPS
        is computed by dividing net income (loss) available to common shareholders
        (numerator) by the weighted average number of shares outstanding (denominator)
        during the period. Diluted EPS gives effect to all dilutive potential
        common shares outstanding during the period using the treasury stock method
        and convertible preferred stock using the if-covered method. In computing
        diluted EPS, the average stock price for the period is used in determining
        the number of shares assumed to be purchased from the exercise of stock
        options or warrants. Diluted EPS and the weighted average number of common
        shares exclude all dilutive potential shares since their effect is anti
        dilutive. Shares underlying these securities totaled 7,147,500 as of December
        31, 2006.                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | d) | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | SFAS No. 130, Reporting Comprehensive Income,
        establishes standards for the reporting and display of comprehensive loss
        and its components in the consolidated financial statements. As at December
        31, 2006 and 2005 the Company has no items that represent a comprehensive
        loss and, therefore, has not included a schedule of comprehensive loss
        in the consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | e) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The Company considers all highly liquid instruments
        with maturity of three months or less at the time of issuance to be cash
        equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | f) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | Property and equipment consists of office equipment
        and fixtures, computer software, and computer hardware and is recorded
        at cost. Depreciation is based on a straight line basis over the following
        periods: Office equipment and fixtures  five years; computer software
         two years; and computer hardware  three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | g) | Long-lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In accordance with SFAS No. 144, Accounting for
        the Impairment or Disposal of Long-Lived Assets, the carrying value
        of intangible assets and other long-lived assets is reviewed on a regular
        basis for the existence of facts or circumstances that may suggest impairment.
        The Company recognizes impairment when the sum of the expected undiscounted
        future cash flows is less than the carrying amount of the asset. Impairment
        losses, if any, are measured as the excess of the carrying amount of the
        asset over its estimated fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | h) | Mineral Property Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The Company has been in the exploration stage since
        its formation on September 25, 2003 and has not yet realized any revenues
        from its planned operations. It is primarily engaged in the acquisition
        and exploration of mining properties. Mineral property exploration costs
        are expensed as incurred. Mineral property acquisition costs are initially
        capitalized when incurred using the guidance in EITF 04-02, Whether
        Mineral Rights Are Tangible or Intangible Assets. The Company assesses
        the carrying costs for impairment under SFAS No. 144, Accounting
        for Impairment or Disposal of Long Lived Assets at each fiscal quarter
        end. When it has been determined that a mineral property can be economically
        developed as a result of establishing proven and probable reserves, the
        costs then incurred to develop such property, are capitalized. Such costs
        will be amortized using the units-of-production method over the estimated
        life of the probable reserve. If mineral properties are subsequently abandoned
        or impaired, any capitalized costs will be charged to operations. During
        the fiscal year ended December 31, 2006, mineral property costs totaling
        $10,000 were impaired as there are no proven or probable reserves on these
        properties.

F-7

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------

| | i) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The fair values of cash, accounts payable, accrued liabilities,
        due to related parties and note payable approximate their carrying values
        due to the immediate or short-term maturity of these financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | j) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | Potential benefits of income tax losses are not recognized
        in the accounts until realization is more likely that not. The Company
        has adopted SFAS No. 109 Accounting for Income Taxes as of
        its inception. Pursuant to SFAS No. 109 the Company is required to compute
        tax asset benefits for net operating losses carried forward. The potential
        benefits of net operating losses have not been recognized in these consolidated
        financial statements because the Company cannot be assured it is more
        likely than not it will utilize the net operating losses carried forward
        in future years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | k) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The Companys functional and reporting currency
        is the United States dollar. Foreign currency transactions are primarily
        undertaken in Canadian dollars and are translated into United States dollars
        using exchange rates at the date of the transaction. Monetary assets and
        liabilities denominated in foreign currencies are remeasured at each consolidated
        balance sheet date at the exchange rate prevailing at the balance sheet
        date. Foreign currency exchange gains and losses are charged to operations.
        The Company has not, to the date of these consolidated financial statements,
        entered into derivative instruments to offset the impact of foreign currency
        fluctuations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | l) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | Prior to January 1, 2006, the Company accounted for
        stock-based awards under the recognition and measurement provisions of
        Accounting Principles Board Opinion No. 25, Accounting for Stock
        Issued to Employees using the intrinsic value method of accounting,
        under which compensation expense was only recognized if the exercise price
        of the Companys employee stock options was less than the market
        price of the underlying common stock on the date of grant. Effective January
        1, 2006, the Company adopted the fair value recognition provisions of
        SFAS No. 123R Share Based Payments, using the modified prospective
        transition method. Under that transition method, compensation cost is
        recognized for all share-based payments granted prior to, but not yet
        vested as of January 1, 2006, based on the grant date fair value estimated
        in accordance with the original provisions of SFAS No. 123, and compensation
        cost for all share-based payments granted subsequent to January 1, 2006,
        based on the grant-date fair value estimated in accordance with the provisions
        of SFAS 123R. Results for prior periods have not been restated. There
        was no effect on the Companys reported loss from operations, cash
        flows of loss per share as a result of adopting SFAS No. 123R.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | All transactions in which goods or services are the
        consideration received for the issuance of equity instruments are accounted
        for based on the fair value of the consideration received or the fair
        value of the equity instrument issued, whichever is more reliably measurable.
        Equity instruments issued to employees and the cost of the services received
        as consideration are measured and recognized based on the fair value of
        the equity instruments issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | m) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | In February 2007, the Financial Accounting Standards
        Board (FASB) issued SFAS No. 159, The Fair Value Option for
        Financial Assets and Financial Liabilities  Including an Amendment
        of FASB Statement No. 115. This statement permits entities to choose
        to measure many financial instruments and certain other items at fair
        value. Most of the provisions of SFAS No. 159 apply only to entities that
        elect the fair value option. However, the amendment to SFAS No. 115 Accounting
        for Certain Investments in Debt and Equity Securities applies to
        all entities with available-for-sale and trading securities. SFAS No.
        159 is effective as of the beginning of an entitys first fiscal
        year that begins after November 15, 2007. Early adoption is permitted
        as of the beginning of a fiscal year that begins on or before November
        15, 2007, provided the entity also elects to apply the provision of SFAS
        No. 157, Fair Value Measurements. The adoption of this statement
        is not expected to have a material effect on the Company's financial statements.                                                                                                                                                                                                                                                  

F-8

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------

| | m) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In September 2006, the SEC issued Staff Accounting Bulletin
        (SAB) No. 108, Considering the Effects of Prior Year
        Misstatements when Quantifying Misstatements in Current Year Financial
        Statements. SAB No. 108 addresses how the effects of prior year
        uncorrected misstatements should be considered when quantifying misstatements
        in current year financial statements. SAB No. 108 requires companies to
        quantify misstatements using a balance sheet and income statement approach
        and to evaluate whether either approach results in quantifying an error
        that is material in light of relevant quantitative and qualitative factors.
        SAB No. 108 is effective for periods ending after November 15, 2006. The
        adoption of this statement did not have a material effect on the Company's
        reported financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In September 2006, the FASB issued SFAS No. 158, Employers
        Accounting for Defined Benefit Pension and Other Postretirement Plans
         an amendment of FASB Statements No. 87, 88, 106, and 132(R).
        This statement requires employers to recognize the overfunded or underfunded
        status of a defined benefit postretirement plan (other than a multiemployer
        plan) as an asset or liability in its statement of financial position
        and to recognize changes in that funded status in the year in which the
        changes occur through comprehensive income of a business entity or changes
        in unrestricted net assets of a not-for-profit organization. This statement
        also requires an employer to measure the funded status of a plan as of
        the date of its year-end statement of financial position, with limited
        exceptions. The provisions of SFAS No. 158 are effective for employers
        with publicly traded equity securities as of the end of the fiscal year
        ending after December 15, 2006. The adoption of this statement did not
        have a material effect on the Company's reported financial position or
        results of operations.                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In September 2006, the FASB issued SFAS No. 157, Fair
        Value Measurements. The objective of SFAS No. 157 is to increase
        consistency and comparability in fair value measurements and to expand
        disclosures about fair value measurements. SFAS No. 157 defines fair value,
        establishes a framework for measuring fair value in generally accepted
        accounting principles, and expands disclosures about fair value measurements.
        SFAS No. 157 applies under other accounting pronouncements that require
        or permit fair value measurements and does not require any new fair value
        measurements. The provisions of SFAS No. 157 are effective for fair value
        measurements made in fiscal years beginning after November 15, 2007. The
        adoption of this statement is not expected to have a material effect on
        the Company's future reported financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In June 2006, the FASB issued FASB Interpretation No.
        48, Accounting for Uncertainty in Income Taxes, an interpretation
        of FASB Statements No. 109 (FIN 48). FIN 48 clarifies
        the accounting for uncertainty in income taxes by prescribing a two-step
        method of first evaluating whether a tax position has met a more likely
        than not recognition threshold and second, measuring that tax position
        to determine the amount of benefit to be recognized in the consolidated
        financial statements. FIN 48 provides guidance on the presentation of
        such positions within a classified statement of financial position as
        well as on derecognition, interest and penalties, accounting in interim
        periods, disclosure, and transition. FIN 48 is effective for fiscal years
        beginning after December 15, 2006. The adoption of this statement is not
        expected to have a material effect on the Company's future reported financial
        position or results of operations.                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In March 2006, the FASB issued SFAS No. 156, "Accounting
        for Servicing of Financial Assets, an amendment of FASB Statement No.
        140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments
        of Liabilities". This statement requires all separately recognized servicing
        assets and servicing liabilities be initially measured at fair value,
        if practicable, and permits for subsequent measurement using either fair
        value measurement with changes in fair value reflected in earnings or
        the amortization and impairment requirements of Statement No. 140. The
        subsequent measurement of separately recognized servicing assets and servicing
        liabilities at fair value eliminates the necessity for entities that manage
        the risks inherent in servicing assets and servicing liabilities with
        derivatives to qualify for hedge accounting treatment and eliminates the
        characterization of declines in fair value as impairments or direct write-downs.
        SFAS No. 156 is effective for an entity's first fiscal year beginning
        after September 15, 2006. The adoption of this statement is not expected
        to have a material effect on the Company's future reported financial position
        or results of operations.

F-9

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------

| | m) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | In February 2006, the FASB issued SFAS No. 155, "Accounting
        for Certain Hybrid Financial Instruments-an amendment of FASB Statements
        No. 133 and 140", to simplify and make more consistent the accounting
        for certain financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting
        for Derivative Instruments and Hedging Activities", to permit fair value
        re-measurement for any hybrid financial instrument with an embedded derivative
        that otherwise would require bifurcation, provided that the whole instrument
        is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140,
        "Accounting for the Impairment or Disposal of Long-Lived Assets", to allow
        a qualifying special-purpose entity to hold a derivative financial instrument
        that pertains to a beneficial interest other than another derivative financial
        instrument. SFAS No. 155 applies to all financial instruments acquired
        or issued after the beginning of an entity's first fiscal year that begins
        after September 15, 2006, with earlier application allowed. The adoption
        of this statement is not expected to have a material effect on the Company's
        future reported financial position or results of operations.

|3. | Property and Equipment
|-- | ----------------------

| |                               |  |       |  |  |              |  |  | December 31, |  |  | December 31, | 
| | ----------------------------- |  | ----- |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                               |  |       |  |  |              |  |  | 2006         |  |  | 2005         | 
| |                               |  |       |  |  | Accumulated  |  |  | Net Carrying |  |  | Net Carrying | 
| |                               |  | Cost  |  |  | Depreciation |  |  | Value        |  |  | Value        | 
| |                               |  | $     |  |  | $            |  |  | $            |  |  | $            | 
| | Computer hardware             |  | 4,676 |  |  | 2,461        |  |  | 2,215        |  |  | 3,774        | 
| | Computer software             |  | 1,345 |  |  | 1,289        |  |  | 56           |  |  | 729          | 
| | Office equipment and fixtures |  | 3,285 |  |  | 1,116        |  |  | 2,169        |  |  | 2,825        | 
| |                               |  | 9,306 |  |  | 4,866        |  |  | 4,440        |  |  | 7,328        | 

|4. | Mineral Property Interests
|-- | --------------------------
|   |                           
|   | a)                        
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   | b)                        
|   |                           
|   |                           

F-10

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|4. | Mineral Property Interests (continued)
|-- | --------------------------------------

| | c) | Buffalo Valley Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | On July 9, 2004, the Company entered into
        a mining lease agreement with Nevada North Resources (U.S.A.) Inc. (Nevada
        North) for a term of twenty years. The agreement called for the
        Company to make advance minimum royalties to the Lessor over the term
        as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | On July 26, 2005, the Company entered into
        an agreement whereby it granted the right to earn up to a 75% interest
        in the property to an Optionee. To earn a 60% interest, the Optionee had
        a work commitment (includes maintaining the underlying leases and claims
        in good standing) of $3,000,000 over a five-year period. Since exploration
        results were considered poor, the option agreement was terminated. On
        May 24, 2006, the Company terminated its lease agreement with Nevada North
        and returned the property to them.                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | d) | Jenny Hill Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | On September 28, 2004, the Company entered
        into a mining lease and option to purchase agreement comprising ninety-seven
        mineral claims situated in Mineral and Nye Counties, Nevada for a term
        of seven years. The agreement calls for the Company to make option payments
        $1,500,000 over a seven year period as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The Company must also complete a work program
        on the property of $50,000, in the first lease year and $100,000 for the
        second and each subsequent lease year until the option is completed. The
        agreement is subject to a net smelter return of 2%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | On December 9, 2005, the Company entered into
        a non-binding agreement whereby it offered the right to earn a 60% interest
        in the property to an Optionee. The Optionee can earn a 60% interest by
        spending $3,000,000 in exploration work on the property over a five-year
        period with a minimum expenditure of $200,000 to be spent during the first
        year. In addition, the Optionee can earn an additional 10% interest by
        completing a feasibility study on the project and an additional 5% interest
        (for a total of 75%) by arranging financing on behalf of the Company for
        its share of the construction costs as a result of both parties reaching
        a positive construction decision for a mine operation on the project.
        A formal agreement is to be signed by both parties within ninety days
        (extended).                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | e) | La Bufa Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | On August 5, 2005, the Company entered into
        a Letter of Intent with Almaden Minerals Ltd. (Almaden) to
        form a joint venture for the exploration and development of the La Bufa
        property, located in Chihuahua, Mexico. Under the Letter of Intent, the
        Company may acquire a 51% interest in the La Bufa property by spending
        $2,000,000 on the property over four years and by issuing 350,000 shares
        of the Company to Almaden over a five year period (50,000 shares issued
        at a fair value of $10,000 on March 15, 2006). The Company is in the process
        of issuing 60,000 shares which were due and payable August 5, 2006. In
        addition, the Company may acquire another 9% of the property by spending
        an additional $1,000,000 on the property. If production is achieved, the
        Company will pay a bonus by issuing 100,000 of its shares. The Company
        is committed to spend $100,000 in the first year.

F-11

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|5. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | Note Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On January 28, 2004, the Company issued a
        $200,000 convertible note with 5,000,000 warrants to purchase common stock
        of the Company at $0.04 per share which expires on January 28, 2006. The
        note carries an interest rate of 10% compounded monthly and was due on
        January 28, 2006. The interest is payable annually with the second year
        interest payment due with the principal amount. The holder could convert
        any portion of the debt to common stock at the value of $0.04 per share
        until January 28, 2006. Warrants could be exercised in minimum amounts
        of 1,000 shares at a conversion price of $0.04 per share. In accordance
        with EITF 00-27 Application of Issue No. 98-5 to Certain Convertible
        Instruments and EITF 98-5 Accounting for Convertible Securities
        with Beneficial Conversion Features or Contingently Adjustable Conversion
        Ratios, there was determined to be minimal fair value related to
        the warrants issued and there was no beneficial conversion feature amount.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On September 15, 2005, the Company completed
        an agreement whereby the Company repaid $100,000 of the convertible note
        along with $35,000 accrued interest and agreed to repay the remaining
        $100,000 within sixty days (outstanding). With the completion of the first
        payment the conversion feature and warrants issued were cancelled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-12

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|8. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In fiscal 2004, the Board of Directors approved the
        2004 Stock Option Plan for a maximum of 2,500,000 shares available to
        be granted to directors, officers, employees and consultants. The stock
        option exercise price is set at the fair market value of the shares at
        the date of grant. The term of the stock options, once granted, is not
        to exceed ten years. The vesting period of the stock options is set at
        the discretion of the Board of Directors.      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On February 23, 2005, the Board of Directors approved
        the 2005 Stock Option Plan for a maximum of 2,000,000 shares available
        to be granted to directors, officers, employees and consultants. The stock
        option exercise price is set at the fair market value of the shares at
        the date of grant. The term of the stock options, once granted, is not
        to exceed ten years. The vesting period of the stock options is set at
        the discretion of the Board of Directors.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | A summary of the Companys stock option activity
        is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                               

WeightedAverageExerciseNumber of
      
      
      PriceOptions
      
      
      $Balance, December 31, 2004
      
      2,410,000
      
      
      0.60Exercised
      
      (20,000
      )
      
      0.60Balance, December
        31, 2005 and 2006
      
      2,390,000
      
      
      0.60


There are no unvested stock options as
  at December 31, 2006.

Additional information regarding stock options outstanding
  as at December 31, 2006 is as follows:

Outstanding
        and ExercisableWeightedWeighted Average
      
      
      AverageNumber of
      
      
      Remaining
      
      
      Exercise PriceExercise price
      
      Options
      
      
      Contractual Life
      
      
      $$0.60
      
      2,390,000
      
      
      0.44 years
      
      
      0.60


The aggregate intrinsic value of stock options outstanding
  and vested as at December 31, 2006 is $262,900.

There
  was no difference in the Company’s net loss or basic and diluted net loss
  per share for the year ended December 31, 2006 as a result of adopting SFAS
  No. 123R on January 1, 2006 than if it had continued to account for stock-based
  compensation under APB No. 25.

There
  were no share-based payments pursuant to APB No. 25 granted during the year
  ended December 31, 2005 therefore no SFAS No. 123 pro forma disclosures have
  been presented.

|9. | Share Purchase Warrants                                                                        
|-- | -----------------------------------------------------------------------------------------------
|   |                                                                                                
|   | The following table summarizes the continuity of the
        Companys share purchase warrants:

| |                            |  |            |   |  | Weighted | 
| | -------------------------- |  | ---------- | - |  | -------- | 
| |                            |  |            |   |  | Average  | 
| |                            |  |            |   |  | Exercise | 
| |                            |  | Number of  |   |  | Price    | 
| |                            |  | Warrants   |   |  | $        | 
| |                            |  |            |   |  |          | 
| | Balance, December 31, 2004 |  | 7,300,000  |   |  | 0.16     | 
| | Issued                     |  | 3,145,000  |   |  | 0.40     | 
| | Cancelled                  |  | (5,000,000 | ) |  | 0.04     | 
| | Balance, December 31, 2005 |  | 5,445,000  |   |  | 0.44     | 
| | Issued                     |  | 1,612,500  |   |  | 1.02     | 
| | Expired                    |  | (2,300,000 | ) |  | 0.50     | 
| | Balance, December 31, 2006 |  | 4,757,500  |   |  | 0.68     | 

F-13

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2006 
  (Expressed in U.S. dollars)

|9. | Share Purchase Warrants (continued)                                                    
|-- | ---------------------------------------------------------------------------------------
|   |                                                                                        
|   | As at December 31, 2006 the following share purchase
        warrants were outstanding:

ExerciseNumber of
      PriceWarrants
      $
      Expiry Date3,145,000
      0.50
      March 10, 2007537,500
      0.35
      July 27, 20071,075,000
      1.35
      July 27, 20104,757,500


|10. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Potential benefits of income tax losses are not recognized
        in the accounts until realization is more likely than not. The Company
        has incurred cumulative net operating losses of approximately $2,186,000
        which commence expiring in 2023. Pursuant to SFAS No. 109 the Company
        is required to compute tax asset benefits for net operating losses carried
        forward. The potential benefits of net operating losses have not been
        recognized in these financial statements because the Company cannot be
        assured it is more likely than not it will utilize the net operating losses
        carried forward in future years. During the years ended December 31, 2006
        and 2005, the valuation allowance established against the deferred tax
        assets increased by $144,900 and $415,300, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The components of the net deferred tax asset as at December
        31, 2006 and 2005, and the statutory tax rate, the effective tax rate
        and the elected amount of the valuation allowance are indicated below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

2006
      2005$
      $Net Operating Losses
      2,186,000
      1,772,000Statutory Tax Rate
      35%
      35%Effective Tax Rate
      
      Deferred Tax Asset
      765,100
      620,200Valuation Allowance
      (765,100)
      (620,200)Net Deferred Tax Asset
      
      


|11. | Subsequent Event                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                   
|    | Subsequent to December 31, 2006, the Company issued
        666,666 shares of common stock for consulting services rendered in fiscal
        2006. See Note 7(a).

F-14

---

ITEM
13.          EXHIBITS

The following exhibits are attached to this Amendment No. 1 to
our Annual Report on Form 10-KSB:

Exhibit Number
      Description of Exhibit3.1
      Articles of Incorporation
          (1)3.2
      Bylaws, as amended (1)3.3
      Articles of Merger between
          Braden Technologies Inc. and Lincoln Gold Corp. (3)4.1
      Form of Series A Warrant Certificate
          (7)4.2
      Form of Series B Warrant Certificate
          (7)4.3
      Form of Subscription Agreement
          (7)10.1
      Form of Share Purchase Agreement
          dated March 15, 2004 between the Company and the U.S. Shareholders of
          Lincoln Gold Corp. (2)10.2
      Form of Share Purchase Agreement
          dated March 15, 2004 between the Company and the Non- U.S. Shareholders
          of Lincoln Gold Corp. (2)10.3
      Convertible Note executed
          by Lincoln Gold Corp. in favour of Alexander Holtermann dated January
          28, 2004 (3)10.4
      Hercules Joint Venture Agreement
          dated April 18, 2004 between the Company and Miranda U.S.A. Inc. and
          Miranda Gold Corp.(3)10.5
      2004 Stock Option Plan (3)10.6
      Letter Agreement on Mining
          Lease Terms for Buffalo Valley Property dated July 9, 2004 (4)10.7
      Letter Agreement on Mining
          Lease Terms for the Jenny Hill Project dated September 28, 2004 (5)10.8
      Property Option Agreement
          for the Hannah project between Lincoln Gold Corp. and Larry McIntosh
          and Susan K. McIntosh dated December 24, 2003 (6)10.9
      Property Option Agreement
          for the Lincoln Flat project between Lincoln Gold Corp. and Larry McIntosh
          and Susan K. McIntosh dated December 24, 2003 (6)10.10
      2005 Stock Option Plan LLP
          (7)10.11
      Option Agreement for the Bufa
          Property dated April 12, 2007 between Almaden Minerals Ltd., Minera
          Gavilan, S.A. de C.V. and Lincoln Golf Corp.(8)10.12
      Form of Subscription Agreement
          for the $0.10 Unit private placement (9)23.1
      Consent
          of Independent Auditors, Manning Elliott LLP (10)31.1
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant to Rule
          13a-14(a) of the Exchange Act (10)32.1
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant to Rule
          13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (10)


|(1) | Previously filed with the Securities and Exchange Commission
        as an exhibit to the Registrants Form 10-SB Registration Statement
        originally filed on April 20, 1999, as amended.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Previously filed as an exhibit to the Companys
        Current Report on Form 8-K filed on March 16, 2004.                                                                                     
|(3) | Previously Filed as an Exhibit to the Quarterly Report
        on Form 10-QSB filed May 24, 2004.                                                                                               
|(4) | Previously filed with the Securities and Exchange Commission
        as an exhibit to the Companys Form 10QSB originally filed August
        6, 2004.                                         
|(5) | Previously filed as an Exhibit to the Companys
        Quarterly Report on Form 10-QSB filed November 15, 2004.                                                                                

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|(6)  | Previously filed as an Exhibit to our Annual Report
        on Form 10-KSB for the year ended December 31, 2004 filed on April 18,
        2005.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------
|(7)  | Previously filed as an Exhibit to our Annual Report on
      Form 10-KSB for the year ended December 31, 2005 filed on March 31,
      2006.    
|(8)  | Previously filed as an exhibit to the Companys Current
      Report on Form 8-K filed on April 18, 2007.                                       
|(9)  | Previously filed as an exhibit to the Companys Current
      Report on Form 8-K filed on May 18, 2007.                                         
|(10) | Filed as an Exhibit to this Amendment No. 1 to our Annual
      Report on Form 10-KSB.                                                          

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

LINCOLN GOLD CORPORATION

|Per: | /s/ Paul F. Saxton                                        | 
|---- | --------------------------------------------------------- | 
|     |                                                           | 
|     | Paul F. Saxton, President                                 | 
|     | Chief Executive Officer and Chief
      Financial Officer | 
|     | Director                                                  | 
|     | Date: July 13, 2007                                       | 

In accordance with the Securities Exchange Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|Per: | /s/ Paul F. Saxton                                                   | 
|---- | -------------------------------------------------------------------- | 
|     |                                                                      | 
|     | Paul F. Saxton, President                                            | 
|     | Chief Executive Officer and Chief Financial Officer                  | 
|     | (Principal Executive Officer)                                        | 
|     | (Principal Financial Officer and Principal Accounting
      Officer) | 
|     | Director                                                             | 
|     | Date: July 13, 2007                                                  | 
|     |                                                                      | 
|     |                                                                      | 
|Per: | /s/ Andrew Bowering                                                  | 
|     |                                                                      | 
|     | Andrew Bowering                                                      | 
|     | Director                                                             | 
|     | Date: July 13, 2007                                                  | 
|     |                                                                      | 
|     |                                                                      | 
|Per: | /s/ James Chapman                                                    | 
|     |                                                                      | 
|     | James Chapman                                                        | 
|     | Director                                                             | 
|     | Date: July 13, 2007                                                  | 

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