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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

(Mark One)

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

for the fiscal year ended December 31, 2008

OR

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

OR

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report
.................................................

For the transition period from _______________________ to
_______________________

COMMISSION FILE NUMBER: 000-25827

LINCOLN GOLD CORPORATION(Exact name of Registrant as specified in its charter)

Not applicable(Translation of
Registrants name into English)

British Columbia(Jurisdiction of incorporation
or organization)

Suite 350, 885 Dunsmuir Street-Vancouver,
British Columbia, Canada, V6C 1N5(Address of principal
executive offices)

Securities registered or to be registered pursuant to section
12(b) of the Act:

|Title of each Class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | Not applicable                           

Securities registered or to be registered pursuant to Section
12(g) of the Act:

Common Shares(Title of Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act:

N/A(Title of Class)

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by the annual report.

55,392,000 Common Shares outstanding as at December 31,
2008

---

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [   ]    No [X]

If this report is an annual or a transition report, indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes [   ]    No [X]

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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 [   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer [  
]           Accelerated filer
[   ]          
Non-accelerated filer [X]

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

U.S. GAAP [  
]                   
 International Financial Reporting Standards as
issued                     Other
[X]

If Other has been checked in response to the previous
question, indicate by check mark which financial statement item the
registrant has elected to follow.

[X] Item 17    [   ] Item 18

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).

Yes [   ]    No [X]

________

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TABLE OF CONTENTS

|                                          |                                                                                    | Page No
|----------------------------------------- | ---------------------------------------------------------------------------------- | -------
|                                          |                                                                                    |        
|GENERAL                                   | 1                                                                                 
|                                          |                                                                                    |        
|NOTE REGARDING FORWARD LOOKING STATEMENTS | 1                                                                                 
|                                          |                                                                                    |        
|GLOSSARY OF TERMS USED IN THIS FORM 20-F  | 2                                                                                 
|                                          |                                                                                    |        
|PART I                                    | 4                                                                                 
|                                          |                                                                                    |        
|ITEM 1                                    | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                              | 4      
|ITEM 2                                    | OFFER STATISTICS AND EXPECTED TIMETABLE                                            | 4      
|ITEM 3                                    | KEY INFORMATION                                                                    | 4      
|ITEM 4                                    | INFORMATION ON THE COMPANY                                                         | 15     
|ITEM 4A                                   | UNRESOLVED STAFF COMMENTS                                                          | 43     
|ITEM 5                                    | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                       | 43     
|ITEM 6                                    | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                         | 49     
|ITEM 7                                    | MAJOR SHAREHOLDER AND RELATED PARTY TRANSACTIONS                                   | 60     
|ITEM 8                                    | FINANCIAL INFORMATION                                                              | 62     
|ITEM 9                                    | THE OFFER AND LISTING                                                              | 63     
|ITEM 10                                   | ADDITIONAL INFORMATION                                                             | 64     
|ITEM 11                                   | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                         | 80     
|ITEM 12                                   | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                             | 81     
|                                          |                                                                                    |        
|PART II                                   | 81                                                                                
|                                          |                                                                                    |        
|ITEM 13                                   | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | 81     
|ITEM 14                                   | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
      AND USE OF PROCEEDS | 81     
|ITEM 15                                   | CONTROLS AND PROCEDURES                                                            | 81     
|ITEM 16A                                  | AUDIT COMMITTEE FINANCIAL EXPERTS                                                  | 83     
|ITEM 16B                                  | CODE OF ETHICS                                                                     | 83     
|ITEM 16C                                  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                             | 84     
|ITEM 16D                                  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                         | 84     
|ITEM 16E                                  | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
      PURCHASERS        | 84     
|                                          |                                                                                    |        
|PART III                                  | 84                                                                                
|                                          |                                                                                    |        
|ITEM 17                                   | FINANCIAL STATEMENTS                                                               | 84     
|ITEM 18                                   | FINANCIAL STATEMENTS                                                               | 86     
|ITEM 19                                   | EXHIBITS                                                                           | 87     

__________

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GENERAL

In this Annual Report, references to we, us, our, the
Company and Lincoln mean Lincoln Gold Corporation.

We use the United States dollar as our reporting currency. All
references in this document to dollars or $ or $ are expressed in United
States dollars, unless otherwise indicated. References to CDN$ refer to
Canadian dollars.

Except as noted, the information set forth is as of December
31, 2008 and all information included in this document should only be considered
correct as of such date.

NOTE REGARDING FORWARD LOOKING STATEMENTS

Much of the information included in includes or is based upon
estimates, projections or other forward looking statements. Such forward
looking statements include any projections or estimates made by us and our
management in connection with our business operations. These statements relate
to future events or our future financial performance. In some cases you can
identify forward-looking statements by terminology such as may, should,
expects, plans, anticipates, believes, estimates, predicts,
potential or continue or the negative of those terms or other comparable
terminology. While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions
or other future performance suggested herein. Such estimates, projections or
other forward looking statements involve various risks and uncertainties and
other factors, including the risks in the section titled Risk Factors below,
that may cause our actual results, levels of activities, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. We caution the reader that important factors in some
cases have affected and, in the future, could materially affect actual results
and cause actual results to differ materially from the results expressed in any
such estimates, projections or other forward looking statements. Although we
believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform those statements to actual results.

The statements contained in Item 4.B.  the Business
Overview, Item 5  Operating and Financial Review and Prospects and Item 11 
Quantitative and Qualitative Disclosures About Market Risk are inherently
subject to a variety of risks and uncertainties that could cause actual results,
performance or achievements to differ significantly.

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GLOSSARY OF TERMS USED IN THIS FORM 20-F

Certain terms used herein are defined as follows:

Term
      DefinitionAndesite
    A dark to grayish colored, fine-grained extrusive
      volcanic rock that may contain phenocrysts of sodic plagioclaseAngular Unconformity
    Contact between two groups of rocks where the underlying
      rocks dip in a different angle that the younger overlying rocksArtesian Water
    Ground water under pressureArtesian water
    Ground water under pressureCarboniferous
    Geologic Period referring to rocks 286 to 360 million
      years oldCarlin-type deposit
    Gold deposits hosted in sedimentary rocks with
      disseminated gold occurring as micron or submicron particles (invisible
      gold), typically with very little to no silver  very large deposits of
      this type are found in the Carlin Trend in north- central Nevada.Caving Ground
    A drilling term that refers to rock formations that break
      when penetrated by a drill and produce rock fragments that may block the
      borehole and/or contaminate the drill cuttingsCaving ground
    A drilling term that refers to rock formations that break
      when penetrated by a drill and produce rock fragments that may block the
      borehole and/or contaminate the drill cuttingsCove-type deposit
    Gold-silver deposits hosted in sedimentary rocks with
      significant amounts of precious metals mineralization hosted in veinlets 
      the Cove deposit is located in the northern portion of the Battle
      Mountain-Eureka Trend.Cretaceous
    Geologic Period referring to rocks 66.4 to 144 million
      years oldDacite
    Fine-grained extrusive volcanic rock with the same
      composition as andesite but having less calcic plagioclase and more quartzDevonian
    Geologic Period referring to rocks 360 to 408 million
      years oldDikes and sills
    Generally narrow bodies of igneous rock implaced as magma
      along faults across bedding (dike) or along zones parallel to bedding
      (sill)Epithermal
    A hydrothermal mineral deposit formed within 1 km of the
      surface at temperatures of 50°-200°C, occurring mainly as veinsGeochemical survey
    A sampling program focusing on trace elements that are
      commonly found associated with mineral deposits  common trace elements
      for gold are mercury, arsenic, and antimony.Geologic mapping
    The process of mapping geologic formations, associated
      rock characteristics and structural featuresGeophysical survey
    The systematic measurement of electrical, gravity,
      seismic, magnetic, or other properties as a tool to help identify rock
      type(s), faults, structures and mineralsGolconda thrust
    A major, flat-lying fault that has transposed older rocks
      over younger rocksGossanous
    An iron-bearing material that typically overlies a
      sulfide-bearing mineralized zone  it forms by the oxidation and leaching
      out of sulfur and most metals leaving hydrated iron oxides.gpt
    Grams per metric tonne


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Term
      DefinitionGravimeter survey
    A survey using a sensitive instrument that can detect
      density differences in geologic formationsHematite breccia
    A rock composed of angular rock fragments with
      conspicuous iron-oxide minerals in the matrix and fracturesIntrusive rock
    Any igneous rock (e.g. granite) that was implaced as a
      magmaJurassic
    Geologic Period referring to rocks 144 to 208 million
      years oldLost Circulation
    The loss of drilling fluids through open faults,
      fractures, and/or permeable rockLost circulation
    The loss of drilling fluids through open faults,
      fractures, and/or permeable rockMagnetometer survey
    A survey using a sensitive instrument that can detect the
      distortion of the Earths magnetic field by different geologic formationsMercury soil gas survey
    A geochemical sampling survey in which mercury vapor is
      sampled and measured  mercury is typically associated with gold deposits
      in the Great Basin and is a pathfinder for finding gold deposits.Metamorphic rock
    Pre-existing rock that has been physically changed by
      temperature, pressure, shearing stress, or chemical environment, generally
      at depth in the Earths crustPathfinder elements
    Trace elements that are typically associated with gold
      deposits  common pathfinder elements are mercury, arsenic and antimony.Penn-Permian
    Geologic Periods referring to rocks ranging from 245 to
      320 million years oldPermo-Triassic
    Geologic Periods referring to rocks ranging from 208 to
      286 million years oldQuartz Breccia
    Quartz vein material that is broken into angular
      fragmentsQuartz Stockworks
    A three-dimensional network of planar to irregular quartz
      veinlets closely enough spaced that the whole mass can be minedReverse-circulation drilling
    A drilling method that minimizes contamination of drill
      cuttingsRoberts Mountains
      Thrust
    A major, flat-lying fault that has transposed older rocks
      over younger rocksRock-chip sampling
    The process of chipping off rock samples from outcrops
      for chemical analysisSchist
    A metamorphic rock that is highly foliated and readily
      splits into flakes or slabs commonly due to a high content of micaSkarn deposit
    Mineralization formed at the flanks and in contact with
      intrusive rocksStratigraphy
    The sequence of stratified rocksSubcrop
    Bedrock just below the surface and usually contributing
      weathered rock material to the surficial debrisTertiary
    Geologic Period referring to rocks ranging in age from
      1.6 to 66.4 million years oldThrust sheet
    A block of rock underlain by a flat-lying fault that
      originated from compressional forcesTriassic
    Geologic Period referring to rocks 208 to 245 million
      years oldTuff
    A general term for consolidated volcanic ashTuff
    Volcanic ash that has been solidified into rockVolcanics
    Generally finely crystalline or glassy igneous rocks
      ejected explosively or extruded at or near the Earths surface through
      volcanic action


- 3 -

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PART I

ITEM
1           IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

A.          
Directors and Senior Management

Not applicable.

B.          
Advisers

Not applicable.

C.          
Auditor

Not applicable.

ITEM
2           OFFER STATISTICS
AND EXPECTED TIMETABLE

Not applicable.

ITEM
3           KEY INFORMATION

A.          
Selected Financial Data

The following table presents selected financial data derived
from our audited financial statements for the fiscal years ended December 31,
2008, 2007, 2006, 2005, and 2004. You should read this information in
conjunction with our financial statements and related notes and Item 5 -
Operating and Financial Review and Prospects.

Our independent auditor, Davidson & Company LLP, Chartered
Accountants, audited our 2008, 2007, 2006, and 2005 annual financial statements.
Our financial statements for the years ended December 31, 2008, 2007, 2006 and
2005 have been prepared in accordance with Canadian generally accepted
accounting principles (Canadian GAAP). Note 18 to the annual financial
statements for 2008, 2007 and 2006 provides descriptions of material measurement
differences between Canadian GAAP and accounting principles generally accepted
in the United States of America (US GAAP) as they relate to us and a
reconciliation of our financial statements to US GAAP. Our financial statements
for the years ended December 31, 2004 and 2003 have been prepared in accordance
with US GAAP

All information provided in the Summary of Financial
Information below and in is presented in Canadian dollars (dollars, $ or
CAD$) and is in accordance with Canadian GAAP, unless indicated otherwise.

- 4 -

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SUMMARY OF FINANCIAL INFORMATION

Statement of Operations and Deficit Data
      Years ended December 312008
      2007
      2006
      2005
      2004CAD
      CAD
      CAD
      USD
      USDRevenues 
        Canadian GAAP 
        US GAAP
      $Nil 
        Nil
      $Nil 
        Nil
      $Nil 
        Nil
      $Nil 
        Nil
      $Nil 
        NilExpenses 
        Canadian GAAP 
        US GAAP
      (2,729,772) 
        (2,729,772)
      (1,163,516) 
        (1,163,516)
      (472,147) 
        (472,147)
      (1,318,543) 
        (1,318,543)
      (1,672,304) 
        (1,672,304)Loss for the year 
        Canadian GAAP 
        US GAAP
      (2,683,240) 
        (2,683,240)
      (1,158,990) 
        (1,158,990)
      (469,208) 
        (469,208)
      (1,294,546) 
        (1,294,546)
      (1,691,351) 
        (1,691,351)Basic and diluted loss per common share
        
        Canadian GAAP 
        US GAAP
      (0.05) 
        (0.05)
      (0.02) 
        (0.02)
      (0.01) 
        (0.01)
      (0.03) 
        (0.03)
      (0.06) 
        (0.06)


Balance Sheet Data
      As at December 312008
      2007
      2006
      2005
      2004CAD
      CAD
      CAD
      USD
      USD
      USD
      USDCanadian 
        GAAP
      Canadian 
        GAAP
      US GAAP
      Canadian 
        GAAP
      US GAAP
      US GAAPCash and cash equivalents 
        Working capital (deficit) 
        Resource properties and/or 
        equipment 
        Total assets 
        Total liabilities 
        Shareholders' equity (deficit)
      $ 1,553 
        (2,517,729) 
        11,679 
        199,450 
        2,527,900 
        (2,328,450)
      $ 123,201 $ 
        (71,665) 
        27,602 
        286,734 
        310,897 
        (24,163)
      123,201 $ 
        (71,665) 
        27,602 
        286,734 
        310,897 
        (24,163)
      21,961 $ 
        (130,363) 
        4,440 
        31,294 
        157,217 
        (125,923)
      21,961 
        (130,363) 
        4,440 
        31,294 
        157,217 
        (125,923)
      $ 132,806 $ 
        3,457 
        7,328 
        151,436 
        140,651 
        10,785
      127,785 
        (43,959) 
        - 
        127,785 
        371,744 
        (243,959)


We have paid no dividends on our common shares since
incorporation and we do not anticipate doing so for the foreseeable future. The
declaration of dividends on our common shares is within the discretion of our
board of directors and will depend upon, among other factors, our earnings,
capital requirements, and the operating and financial condition.

B.          
Capitalization and Indebtedness

Not applicable.

C.          
Reasons for the Offer and Use of Proceeds

Not applicable.

- 5 -

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D.          
Risk Factors

Our securities are highly speculative and subject to a number
of risks. You should not consider an investment in our securities unless you are
capable of sustaining an economic loss of the entire investment.

The risks associated with our business include:

**There is no assurance that the either proposed arrangement transaction with LPT Capital or the private placement transaction to be completed by LPT Capital will complete**

We entered into an arrangement agreement with LPT Capital and a wholly owned subsidiary of LPT Capital on January 15, 2009, as subsequently amended.  The arrangement agreement contemplates that we would complete a business combination transaction pursuant to a court approved plan of arrangement with LPT Capital whereby LPT Capital would acquire all of our issued and outstanding common shares in exchange for the issue of 23 million post-consolidation common shares of LPT Capital to the shareholder of Lincoln Gold.  Completion of this business combination transaction is subject to the completion of a private placement by LPT Capital that would raise not less than $3.38 million.  If successfully completed, shareholders of Lincoln Gold would receive common shares of LPT Capital that would be tradable in Canada on the TSX Venture Exchange.  There is no assurance that either the business combination transaction or the private placement financing will be completed.  There is further no assurance that our shareholders will receive common shares of LPT Capital that will be traded on the TSX Venture Exchange.

If we do not obtain additional financing, our business
plan will fail.

As of December 31, 2008, we had cash on hand of $1,553 and a
working capital deficit of $2,517,729. As of March 31, 2009, we had cash on hand
of $30,199 and working capital deficit of $2,735,505. Our business plan calls
for us to spend approximately $2,200,000 in connection with the exploration and
development of our mineral claims during the next twelve months, the maintenance
of our interests in our mineral claims and our general and administrative
expenses during the next twelve months. Based on our cash and working capital
position, we will require additional financing in the approximate amount of
$3,200,000 in order to complete our plan of operations for the next twelve
months. We currently do not have any arrangements for financing and we may not
be able to obtain financing when required. Obtaining additional financing would
be subject to a number of factors, including the market price of gold. These
factors may make the timing, amount, terms or conditions of additional financing
unavailable to us.

If we are unable to maintain our interests in our Nevada
mineral claims, then we will lose our interests in these mineral claims.

We are required to make substantial payments in order to
maintain our interests in certain of our Nevada mineral claims. Over the next
twelve months, we must make payments totalling approximately $105,000 in lease
and option payments in order to maintain our interests in our Pine Grove, La
Bufa, and Hannah mineral properties. Our inability to make these payments due to
a lack of financing or our determination not to make these payments will result
in our losing our interests in these claims. If we are not able to maintain our
interests in our mineral claims, then we will not be able to carry out our plan
of operations.

Because we have only recently commenced preliminary
exploration of our Nevada mineral claims, we face a high risk of business
failure and this could result in a total loss of your investment.

We have not begun the initial stages of exploration of our
mineral claims, and thus have no way to evaluate the likelihood whether we will
be able to operate our business successfully. To date, we have been involved
primarily in organizational activities, acquiring interests in mineral claims
and in conducting preliminary exploration of mineral claims. We have not earned
any revenues and have not achieved profitability as of the date of this
prospectus. Potential investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration and additional costs and expenses
that may exceed current estimates. We have no history upon which to base any
assumption as to the likelihood that our business will prove successful, and we
can provide no assurance to investors that we will generate any operating
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will likely fail and you will lose your
entire investment.

- 6 -

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The mineral resources estimates presented by us for our
mineral properties are estimates only and there is no assurance that these
resources represent economically recoverable mineralization.

We have included mineral resource estimates that have been made
in accordance with Canadian National Instrument 43-101. These resources
estimates are classified as indicated resources and inferred resources. We
advise investors that while these terms are recognized and required by Canadian
securities regulations, the U.S. Securities and Exchange Commission does not
recognize these terms. Investors are cautioned not to assume that any part or
all of mineral deposits classified as inferred resources will ever be
converted into reserves. Further, inferred resources have a great amount of
uncertainty as to their existence, and economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume that part
or all of an inferred resource exists, or is economically or legally mineable.

All amounts of mineral resources are estimates only, and we
cannot be certain that any specified level of recovery of metals from the
mineralized material will in fact be realized or that our mineral properties or
any other identified mineral deposit will ever qualify as a commercially
mineable (or viable) reserves of gold or copper in any of our mineral claims
that can be economically exploited. Mineralized material, which is not mineral
reserves, does not have demonstrated economic viability. In addition, the
quantity of mineral reserves and mineral resources may vary depending on, among
other things, metal prices. Any material change in the quantity of
mineralization, grade or stripping ratio, or metal prices may affect the
economic viability of our properties. In addition, we cannot be certain that
metal recoveries obtained from small-scale laboratory tests will be duplicated
in larger scale tests, under on-site conditions or during production.

Because we do not have any revenues, we expect to incur
operating losses for the foreseeable future.

We have never earned revenues and we have never been
profitable. Prior to completing exploration on the mineral property, we
anticipate that we will incur increased operating expenses without realizing any
revenues. We therefore expect to incur significant losses into the foreseeable
future. If we are unable to generate financing to continue the exploration of
our mineral claims, we will fail and you will lose your entire investment.

We will require significant additional financing in order
to continue our exploration activities, pay down debt and also continue our
assessment of the commercial viability of our mineral properties.

We will require additional financing in order to carry out our
acquisition, exploration and, if warranted, development activities. Failure to
obtain such financing on a timely basis could cause us to forfeit our interest
in certain properties, miss certain acquisition opportunities, or delay or
indefinitely postpone further exploration and, if warranted, development of our
projects, which could result in the possible loss of such properties or the
reduction or termination of our operations. Even if we achieve revenues, if any
such future revenues decrease as a result of lower commodity prices or
otherwise, it will affect our ability to expend the necessary capital to replace
our reserves or to maintain our production. If cash flow from operations is not
sufficient to satisfy our capital expenditure requirements, there can be no
assurance that additional debt or equity financing will be available to meet
these requirements or be available on favorable terms. We also need to pay down
significant amounts of debt that are outstanding at this time.

- 7 -

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If our costs of exploration are greater than anticipated,
then we will not be able to complete our planned exploration programs for our
mineral claims without additional financing, of which there is no assurance that
we would be able to obtain.

We are proceeding with the initial stages of exploration on our
mineral claims. We have prepared budgets for our exploration programs. However,
there is no assurance that our actual costs will not exceed the budgeted costs.
Factors that could cause actual costs to exceed budgeted costs include increased
prices due to competition for personnel and supplies during the Nevada summer
exploration season, unanticipated problems in completing the exploration
programs and delays experienced in completing the exploration program. Increases
in exploration costs could result in us not being able to carry out our
exploration programs without additional financing. There is no assurance that we
would be able to obtain additional financing in this event.

Because of the speculative nature of exploration of
mining properties, there is substantial risk that no commercially exploitable
minerals will be found and our business will fail.

We are in the initial stages of exploration of our mineral
claims, and thus have no way to evaluate the likelihood that we will be
successful in establishing commercially exploitable reserves of gold or other
valuable minerals on our mineral claims. Potential investors should be aware of
the difficulties normally encountered by new mineral exploration companies and
the high rate of failure of such enterprises. The search for valuable minerals
as a business is extremely risky. We may not find commercially exploitable
reserves of gold or copper in any of our mineral claims. Exploration for
minerals is a speculative venture necessarily involving substantial risk. The
expenditures to be made by us on our exploration programs may not result in the
discovery of commercial quantities of ore. The likelihood of success must be
considered in light of the problems, expenses, difficulties, complications and
delays encountered in connection with the exploration of the mineral properties
that we plan to undertake. Problems such as unusual or unexpected formations and
other conditions are involved in mineral exploration and often result in
unsuccessful exploration efforts. In such a case, we would be unable to complete
our business plan.

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages as we
conduct our business.

The search for valuable minerals involves numerous hazards. In
the course of carrying out exploration of our mineral claims, we may become
subject to liability for such hazards, including pollution, cave-ins and other
hazards against which we cannot insure or against which we may elect not to
insure. We currently have no such insurance nor do we expect to get such
insurance for the foreseeable future. If a hazard were to occur, the costs of
rectifying the hazard may exceed our asset value and cause us to liquidate all
of our assets, resulting in the loss of your entire investment.

If we discover commercial reserves of precious metals on
any of our mineral properties, we can provide no assurance that we will be able
to successfully advance the mineral claims into commercial production.

Our mineral properties do not contain any known bodies of ore.
If our exploration programs are successful in establishing ore of commercial
tonnage and grade on any of our mineral claims, we will require additional funds
in order to advance the mineral claims into commercial production. In such an
event, we may be unable to obtain any such funds, or to obtain such funds on
terms that we consider economically feasible, and you may lose your entire
investment.

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As we undertake exploration of our mineral claims, we
will be subject to compliance with government regulation that may increase the
anticipated time and cost of our exploration program.

There are several governmental regulations that materially
restrict the exploration of minerals. We will be subject to the mining laws and
regulations as contained in the Nevada Statutes and Nevada Administrative Code
as we carry out our exploration programs. We may be required to obtain work
permits, post bonds and perform remediation work for any physical disturbance to
the land in order to comply with these regulations. While our planned
exploration program budgets for regulatory compliance, there is a risk that new
regulations could increase our time and costs of doing business and prevent us
from carrying out our exploration program.

If we do not find a joint venture partner for the
continued exploration of certain of our mineral claims, we may not be able to
advance the exploration work.

We may try to enter into joint venture agreements with
potential partners for the further exploration and possible production of our
mineral claims, particularly where we believe drilling of a mineral claim is
warranted. We would face competition from other junior mineral resource
exploration companies if we attempt to enter into a joint venture agreement with
a partner. The possible partner could have a limited ability to enter into joint
venture agreements with junior exploration programs and will seek the junior
exploration companies who have the properties that they deem to be the most
attractive in terms of potential return and investment cost. In addition, if we
entered into a joint venture agreement, we would likely assign a percentage of
our interest in the mineral claims to the joint venture partner. If we are
unable to enter into a joint venture agreement with a partner, we may not be
able to complete certain exploration work on certain of our properties,
including planned drilling.

If prices for gold decline, we may not be able to raise
any additional financing required to fund our exploration activities in our
mineral properties or achieve an adequate return for our shareholders.

Our ability to raise financing to fund our exploration
activities and, if warranted, development of our mineral properties will be
significantly affected by changes in the market price of gold. The price of gold
is determined based on world demand, supply and other factors, all of which are
beyond our control. World prices for gold have fluctuated widely in recent
years. Future significant price declines could cause investors to be unprepared
to finance exploration of gold, with the result that we may not have sufficient
financing with which to fund our exploration activities. In this event, we may
not be able to carry out planned exploration activities and, if warranted,
development of our mineral properties with the result that we may not be able to
continue our plan of operations.

If we are able to establish commercially mineable reserves, we
must be able to successfully market our natural resources to prospective buyers.
The marketability and price of natural resources which we may acquire or
discover will be affected by numerous factors beyond our control. Government
regulations, including regulations relating to prices, taxes, royalties, land
tenure, land use, importing and exporting of natural resources and environmental
protection are all factors which may affect the marketability and price of
natural resources. The exact effect of these factors cannot be accurately
predicted, but any one or a combination of these factors could result in our
ability to achieve an adequate return for our shareholders.

The adoption of stricter environmental legislation
governing our mineral properties or failure to comply with environmental
legislation could increase our costs of exploring and, if warranted, developing
these properties and could delay these activities.

We must comply with applicable environmental legislation in
carrying out our exploration and, if warranted, development of our mining
properties. All phases of the natural resources business present environmental
risks and hazards and are subject to environmental regulation pursuant to a
variety of international conventions and national, provincial and local laws and
regulations. Environmental

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legislation provides for, among other things, restrictions and
prohibitions on spills, releases or emissions of various substances produced in
association with operations. The legislation also requires that facility sites
and mines be operated, maintained, abandoned and reclaimed to the satisfaction
of applicable regulatory authorities. Compliance with such legislation can
require significant expenditures, and a breach may result in the imposition of
fines and penalties, some of which may be material. Environmental legislation is
evolving in a manner expected to result in stricter standards and enforcement,
larger fines and liability and potentially increased capital expenditures and
operating costs. The discharge of tailings or other pollutants into the air,
soil or water may give rise to liabilities to third parties and may require us
to incur costs to remedy such discharge. No assurance can be given that
environmental laws will not result in a curtailment of production or a material
increase in the costs of production, development or exploration activities or
otherwise adversely affect our financial condition, results of operations or
prospects.

The presence of unknown environmental hazards on our
mineral properties may result in significant unanticipated compliance and
reclamation costs that may increase our costs of exploring and, if warranted,
developing our mineral properties.

Environmental hazards may exist on our mineral properties which
are unknown to us at present and which have been caused by previous or existing
owners or operators of the properties. The presence of such environmental
hazards may result in us being required to comply with environmental
reclamation, closure and other requirements that may involve significant costs
and other liabilities. In particular, our operations and exploration activities
are subject to Canadian laws and regulations governing protection of the
environment. These laws are continually changing and, in general, are becoming
more restrictive.

We may be subject to other laws or regulations that could
result in increased costs or delays.

We believe we are in substantial compliance with all material
laws and regulations which currently apply to our activities. However, failure
to comply with applicable laws, regulations and permitting requirements may
result in enforcement actions there under, including orders issued by regulatory
or judicial authorities causing operations to cease or be curtailed and may
include corrective measures requiring capital expenditures, installation of
additional equipment, or remedial actions. An entity engaged in natural resource
exploration and development activities may be required to compensate those
suffering loss or damage by reason of its activities and may have civil or
criminal fines or penalties imposed for violations of applicable laws or
regulations.

Amendments to current laws, regulations and permits governing
operations and activities of natural resources companies, or more stringent
implementation thereof, could have a material adverse impact on us and cause
increases in capital expenditures or, if applicable, production costs, reduction
in levels of production at any properties on which we may achieve production, or
abandonment or delays in the development of new properties.

In addition, natural resource activities may be affected in
varying degrees by political and financial instability, inflation and haphazard
changes in government regulations relating to this industry. Any changes in
regulations or shifts in political or financial conditions are beyond our
control and may adversely affect our business. Our operations may be affected in
varying degrees by government regulations with respect to restrictions on
production, price controls, export controls, income taxes, expropriation of
property, environmental legislation and safety.

We may not be able to obtain all necessary licenses and
permits that may be required.

Our operations will require licenses and permits from various
governmental authorities. There can be no assurance that we will be able to
obtain all necessary licenses and permits that may be required to carry out our
exploration and, if applicable, development projects.

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Limits on equipment availability could delay our
operations.

Natural resource exploration and development activities are
dependent on the availability of drilling and related equipment in the
particular areas where such activities will be conducted. Demand for such
limited equipment or access restrictions may affect the availability of such
equipment to us and may delay exploration and, if applicable, development
activities.

We compete with larger, better capitalized competitors in
the mining industry.

The mining industry is competitive in all of its phases,
including financing, technical resources, personnel and property acquisition. It
requires significant capital, technical resources, personnel and operational
experience to effectively compete in the mining industry. Because of the high
costs associated with exploration, the expertise required to analyze a projects
potential and the capital required to develop a mine, larger companies with
significant resources may have a competitive advantage over us. We face strong
competition from other mining companies, some with greater financial resources,
operational experience and technical capabilities than we have. As a result of
this competition, we may be unable to maintain or acquire financing, personnel,
technical resources or attractive mining properties on terms we consider
acceptable or at all.

More specifically, we actively compete for acquisitions,
leases, licenses, concessions, claims, skilled industry personnel and other
related interests with a substantial number of other companies. Our ability to
successfully bid on and acquire additional property rights to participate in
opportunities and to identify and enter into commercial arrangements with other
parties will be dependent upon developing and maintaining close working
relationships with our future industry partners and joint operators and our
ability to select and evaluate suitable properties and to consummate
transactions in a highly competitive environment.

If we were to lose the services of Paul Saxton or other
members of our management team, we may be delayed in our plan of operations and
our operating expenses may be increased.

Our success is dependent upon the performance of key personnel
working in management, supervisory and administrative capacities. These
personnel include Paul Saxton, who is our President and Chief Executive Officer.
We do not maintain life insurance or key man insurance for such personnel. The
loss of the services of senior management or key personnel may result in us
being required to identify and engage qualified management personnel who are
capable of managing our business activities. We may be delayed in the
implementation of our plan of operations and our operating expenses may be
increased if we were to lose the services of senior management or key
personnel.

Certain of our officers and directors may have conflicts
of interests due to their involvement with other companies.

Certain of our directors and officers are also directors and
officers of other natural resource companies. Consequently, there exists the
possibility for such directors and officers to be in a position of conflict. Any
decision made by any of such directors and officers relating to us will be made
in accordance with their duties and obligations to deal fairly and in good faith
with us and such other companies.

If we lose the services of the independent contractors
that we engage to undertake our exploration, then our plan of operations may be
delayed or be more expensive to undertake than anticipated.

Our success depends to a significant extent on the performance
and continued service of certain independent contractors. We have contracted the
services of professional drillers and other contractors for exploration,
environmental, construction and engineering services. Poor performance by such
contractors or the loss of such services could result in our planned exploration
activities being delayed or being more expensive to undertake than anticipated.

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We are subject to many risks that are not insurable and,
as a result, we will not be able to recover losses through insurance should such
risks occur.

Our involvement in the exploration for and, if applicable,
development of natural resource properties may result in us becoming subject to
liability for certain risks, and in particular unexpected or unusual geological
operating conditions, including rock bursts, cave ins, fires, floods,
earthquakes, pollution, blow-outs, property damage, personal injury or other
hazards. Although we will obtain insurance in accordance with industry standards
to address such risks, such insurance has limitations on liability that may not
be sufficient to cover the full extent of such liabilities. In addition, such
risks may not be insurable in all circumstances, or, in certain circumstances,
we may elect not to obtain insurance to deal with specific risks due to the high
premiums associated with such insurance or other reasons. The payment of such
uninsured liabilities would reduce the funds available to us for operations. The
occurrence of a significant event that we are not fully insured against could
have a material adverse effect on our financial position, results of operations
or prospects.

No assurance can be given that insurance to cover the risks to
which our activities will be subject will be available at all or at economically
feasible premiums. Insurance against environmental risks (including potential
for pollution or other hazards as a result of the disposal of waste products
occurring from exploration and, if applicable, production) is not generally
available to us or to other companies within the industry. The payment of such
liabilities would reduce the funds available to us for operations. Should we be
unable to fund fully the cost of remedying an environmental problem, we might be
required to suspend operations or enter into interim compliance measures pending
completion of the required remedy.

Because we have no history of earnings with respect to
our mineral exploration business and no foreseeable earnings, we may never
achieve profitability or pay dividends.

We have a history of losses and there can be no assurance that
we will ever be profitable. We have paid no dividends on our shares since
incorporation. We presently have no ability to generate earnings because our
mineral properties are in the exploration stage. If we are successful in
developing our mineral properties, we anticipate that we will retain future
earnings and other cash resources for the future operation and development of
our business. We do not intend to declare or pay any cash dividends in the
foreseeable future. Payment of any future dividends is solely at the discretion
of our board of directors, which will take into account many factors including
our operating results, financial condition and anticipated cash needs. For these
reasons, we may never achieve profitability or pay dividends.

We do not have a history of paying dividends and do not
have any intention of paying dividends in the foreseeable future.

Investors cannot expect to receive a dividend on their
investment in the foreseeable future, if at all. Accordingly, it is likely
investors will not receive any return on their investment in our securities
other than possible capital gains.

U.S. investors who obtain judgments against us or our
officers or directors for breaches of U.S. securities laws may have difficulty
in enforcing such judgments against us and our officers and directors.

We are incorporated under the laws of a province of Canada and
the majority of our directors and officers are residents of Canada.
Consequently, it may be difficult for United States investors to effect service
of process within the United States upon us or upon our directors or officers,
or to enforce, inside or outside of the United States, any judgments of United
States courts predicated upon civil liabilities under the United States
Securities Exchange Act of 1934, as amended. A judgment of a U.S. court
predicated solely upon such civil liabilities may not be enforceable in Canada
by a Canadian court

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if the U.S. court in which the judgment was obtained is
determined by the Canadian court not to have had jurisdiction in the matter.
Furthermore, an original action might not be able to be brought successfully in
Canada against any of such persons or us predicated solely upon such civil
liabilities.

Broker-dealers may be discouraged from effecting
transactions in our common shares because they are considered a penny stock and
are subject to the SECs penny stock rules.

The SEC has adopted rules (the Penny Stock Rules) that
regulate broker-dealer practices in connection with transactions in penny
stocks. Penny stocks are equity securities with a price of less than U.S.$5.00
(other than securities registered on certain national securities exchanges or
quoted on the NASDAQ system, provided that current prices and volume information
with respect to transactions in such securities is provided by the exchange or
system).

The Penny Stock Rules require a broker-dealer, prior to
effecting a transaction in a penny stock not otherwise exempt from such rules,
to deliver a standardized risk disclosure document prepared by the SEC that
provides information about penny stocks and the nature and level of risks in the
penny stock market. In particular the statement must contain:

| | (a) | a description of the nature and level of risk in the
      market for penny stocks in both public offerings and secondary
    trading;                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                            
| | (b) | a description of the broker-dealers duties to the
      customer and of the rights and remedies available to the customer with
      respect to a violation to such duties or other requirements of securities
      laws;
| |     |                                                                                                                                                                                                                            
| | (c) | a brief, clear, narrative description of a dealer market,
      including bid and ask prices for penny stocks and the significance of the
      spread between the bid and ask price;                                      
| |     |                                                                                                                                                                                                                            
| | (d) | a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                  
| |     |                                                                                                                                                                                                                            
| | (e) | the definitions of significant terms in the disclosure
      document or in the conduct of trading in penny stocks; and                                                                                                    
| |     |                                                                                                                                                                                                                            
| | (f) | such other information and be in such form, including
      language, type, size and format, as the Commission shall require by rule
      or regulation.                                                                  

The broker-dealer must obtain from the customer a written
acknowledgement of receipt of the standardized disclosure document.

The broker-dealer also must provide the customer with:

| | (a) | the inside bid and offer quotations for the penny stock,
      or other bid and offer price information for the penny stock if inside bid
      and offer quotations are not available;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                        
| | (b) | the compensation of the broker-dealer and its
      salespersons in the transaction;                                                                                                   
| |     |                                                                                                                                                                                        
| | (c) | the number of shares to which such bid and ask prices
      apply, or other comparable information relating to the depth and liquidity
      of the market for such stock; and         
| |     |                                                                                                                                                                                        
| | (d) | a monthly account statements showing the market value of
      each penny stock held in the customers account.                                                                        

In addition, the Penny Stock Rules require that prior to a
transaction in a penny stock not otherwise exempt from such rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
acknowledgment of

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the receipt of a risk disclosure statement, a written agreement
to transactions involving penny stocks, and a signed and dated copy of a written
suitability statement. At the present market prices our common shares will (and
in the foreseeable future are expected to continue to) fall within the
definition of a penny stock. Accordingly, United States broker-dealers trading
in our shares will be subject to the Penny Stock Rules. Rather than complying
with those rules, some broker-dealers may refuse to attempt to sell penny stock.
As a result, shareholders and their broker-dealers in the United States may find
it more difficult to sell their shares of Lincoln, if a market for the shares
should develop in the United States.

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ITEM
4           INFORMATION ON THE
COMPANY

We are a mineral resource exploration company trading on the
NASD Over the Counter Bulletin Board (OTCBB) in the United States under the
symbol LGCPF. We own interests in exploration properties located in the State
of Nevada and in Mexico.

A.          
History and Development of the Company

Name

Our legal and commercial name is Lincoln Gold Corporation

Principal Office

Our principal office is located at Suite 350 - 885 Dunsmuir
Street, Vancouver, British Columbia, Canada, V6C 1N5. Our telephone number is
(604) 688-7377.

Incorporation and Continuation

***Incorporation***

The Company was incorporated under the laws of the State of
  Nevada as Braden Technologies, Inc. on February 17, 1999. The Company has been
  engaged in the acquisition and exploration of mineral properties since
  inception.

***Lincoln Gold Acquisition***

Braden completed the acquisition of Lincoln Gold Corp.
(Lincoln Gold) a Nevada corporation effective March 26, 2004. This acquisition
was completed by the acquisition of all of the issued and outstanding shares of
Lincoln Gold from the former shareholders of Lincoln Gold. On closing of the
acquisition, the Company issued 24,000,000 shares of Common Shares to the
shareholders of Lincoln Gold. As a result of this issuance, the number of issued
and outstanding shares increased from 11,400,000 shares to 35,400,000 shares, of
which approximately 67.80% was owned by the former shareholders of Lincoln Gold
upon the completion of the acquisition.

Subsequent to the acquisition of Lincoln Gold, it merged with
Lincoln Gold in a parent/ subsidiary merger in April 2004 under Chapter 92A of
the Nevada Revised Statutes. The Company completed the change of its name from
Braden Technologies Inc. to Lincoln Gold Corporation as part of this merger
process.

***Continuation to the CBCA***

On November 20, 2007, the Company completed a continuation,
  whereby the Company changed its jurisdiction of incorporation from Nevada to the
  Canadian federal jurisdiction under the Canada Business Corporation Act
  (CBCA). The Company is now governed by the provisions of the CBCA and has
  adopted by-laws consistent with a CBCA company. The Company is a reporting
  issuer in Canada.

***Continuation to the BCBCA***

On February 18, 2009, the Company completed a continuation, whereby the Company changed its jurisdiction of incorporation from the Canadian federal jurisdiction to the Province of British Columbia under the British Columbia Business Corporation Act (“BCBCA”).  The Company is now governed by the provisions of the BCBCA and has adopted articles consistent with a BCBCA company.  The Company is a reporting issuer under the securities laws of the Province of British Columbia.

***Subsidiaries***

Lincoln has one wholly-owned subsidiary, Minera Lincoln de
Mexico, S.A. de C.V., which conducts Lincolns mineral exploration activities
and operations in Mexico.

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***Arrangement Agreement***

On January 15, 2009, Lincoln entered into an arrangement agreement with LPT Capital Limited (“**LPT**”) whereby Lincoln would merge with 0843037 BC Ltd., a subsidiary of LPT (“**LPT Sub**”), and the shareholders of Lincoln would be issued, in aggregate, 23,000,000 post-consolidation common shares of LPT (the “**Arrangement Agreement**”).   Lincoln would survive the merger with LPT Sub and would continue as a wholly owned subsidiary of LPT.  The business combination transaction would be completed pursuant to a court approved arrangement (the “Arrangement”) completed in accordance with the BCBCA.   LPT, a British Columbia company, is a capital pool company listed in Canada on the TSX Venture Exchange and the completion of the Arrangement would be its qualifying transaction on the TSX Venture Exchange (the “**Qualifying Transaction**”).  Concurrent with and as a condition to the completion of the transaction, LPT will be required to complete a private placement financing for minimum proceeds of $3,380,000.  The Qualifying Transaction has been approved in principal by the TSX Venture Exchange (“Exchange”).  Lincoln and LPT are presently attempting to complete the private placement financing at the date of this Annual Report to satisfy the condition to the closing of the Arrangement.  There is no assurance that either the Qualifying Transaction or the private placement financing will be completed.

The Arrangement Agreement has been subsequently amended on February 16, 2009, April 30, 2009 and June 30, 2009 in order to enable to provide additional time for the completion of the private placement to be completed by LPT as a condition to the closing of the Arrangement.  There is no assurance that this private placement financing will be completed by LPT.  If the financing is not completed, then the Arrangement will most likely not complete.

*Conditions to Closing*

The Arrangement is subject to a number of conditions precedent, including:

- the approval of the shareholders of Lincoln,
- the approval of the shareholders of LPT,
- the approval of the British Columbia Supreme Court under the BCBCA,
- the approval of the TSX Venture Exchange, and
- the completion of the Private Placement, the Consolidation and the Debt Settlement, each as described below.

Approval from the shareholders of Lincoln and LPT was obtained on February 18, 2009.  Approval of the British Columbia Supreme Court was obtained on February 20, 2009.  The TSX Venture Exchange has accepted the Arrangement as LPT's "Qualifying Transaction", subject only to receipt of customary post-closing filings with TSXV.

*Private Placement*

Concurrent with the closing of the Arrangement, LPT intends to complete a private placement (the “**Private Placement**”) to raise minimum proceeds of $3,380,000 to a maximum of $6,000,000 in aggregate through the sale of up to 35,294,117 units of LPT (the “**LPT Units**”) at a price of $0.17 per LPT Unit.  The LPT Units will be comprised of one post-consolidation common share of LPT and a one-half of one LPT Warrant.  Each whole LPT Warrant will be exercisable to purchase one post-consolidation common share of LPT for a period of two years at an exercise price of $0.25 per share.  LPT may pay a finder’s fee to third parties in connection with the Private Placement in an aggregate amount of 8% of the gross

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proceeds raised under the Private Placement, payable at the election of the finder in cash or post-consolidation common shares of LPT (on the basis of $0.17 per share).

*Consolidation of LPT Share Capital*

As part of the structuring of the outstanding share capital of LPT in connection with the Arrangement, LPT and Lincoln agreed to a consolidation of LPT's outstanding common shares on a 1 (new) for 1.5 (old) basis (the “Consolidation”).  The consolidation will reduce the outstanding number of LPT common shares, prior to completion of the Arrangement, from 6,000,000 common shares to 4,000,000 common shares.  The issuance of 23,000,000 post-consolidation common shares of LPT to the shareholders of Lincoln under the Arrangement was negotiated on the basis of the share consolidation having been completed.  The completion of the Consolidation is a condition to the closing of the Arrangement.

*Debt Settlement*

Pursuant to the Arrangement Agreement, Lincoln has agreed to convert up to $1,088,818.53 of its outstanding debt into common shares of Lincoln prior to the closing of the Arrangement (the “Debt Settlement”).  Any Lincoln Shares issued under such debt conversion will then be subject to the exchange, at the exchange ratio, for post-consolidation common share of LPT pursuant to the Arrangement.  Lincoln has also sought agreement from certain creditors who do not elect to participate in the debt conversion to postpone repayment of their outstanding debts until a date following the completion of the Arrangement.

*Change of Name*

If the Arrangement is completed, the corporate name of LPT will be changed to “Lincoln Mining Corporation” and Lincoln will continue as a wholly owned subsidiary of LPT.

*Directors and Officers Post-Closing*

Under the terms of the Arrangement, LPT's board of directors will consist of four (4) directors upon completion of the Arrangement.  The board of directors of LPT will comprise Philip J. Walsh, Paul Saxton, Andrew Milligan and Marc S. LeBlanc.  Paul Saxton will be appointed as President and Chief Executive Officer, Herrick Lau will be appointed as Chief Financial Officer and Jeffrey L. Wilson will be appointed Vice-President, Exploration.

Project Summary

Pine Grove, Nevada, USA

The Pine Grove project is located in Lyon County, Nevada. We
  acquired our interests in the Pine Grove property in 2007, as described below.
  The Pine Grove property is described in detail below under Properties, Plants
  and Equipment.

On July 13, 2007, we entered into an agreement with the Wheeler
  Mining Company (Wheeler) to lease Wheelers 100% owned Wheeler and Wheeler
  patent claims in Lyon County, Nevada from July 13, 2007 to December 31, 2022
  with an exclusive option to renew the lease by written notice to December 31,
  2023. If the property is and remains in commercial production by November 1 of
  each year after 2022, we may renew the lease for a period of one year by
  delivering written notice to the owner prior to November 15 of that year. We
  must produce a bankable feasibility study on the properties by July 1, 2009,
  extended to December 31, 2010,.and obtain all necessary funding to place the
  properties into commercial production. We must pay a net smelter royalty of 3%
  (at a gold price of US$450) to 7% (at a gold price of US$701) upon commencement
  of commercial mining production based on gold prices and the Company must pay a
  5% net smelter royalty on metals or minerals other than gold produced and sold
  from the properties.

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Pursuant to an agreement dated July 30, 2007, we purchased from
  Harold Votipka (Votipka) the Harvest lode claim, the Winter Harvest lode
  claim, and the Harvest fraction lode claim, each located within the Pine Grove
  Mining District in Lyon County, Nevada. The purchase price was US$12,000, which
  we have paid, and includes a 5% net smelter royalty on production payable to
  Votipka.

On August 1, 2007, we entered into an agreement with Lyon Grove
  LLC, (Lyon Grove) to lease the Wilson Mining Claim Group located in Lyon
  County, Nevada from August 1, 2007 to July 31, 2022, with an option to purchase.
  We can extend the term of the lease for up to ten additional one year terms
  providing we are conducting exploration mining activities at the expiration of
  the term immediately preceding the proposed extension term.

The following lease payments must be made by us:

- US$10,000 upon signing the agreement, which we have paid and
- US$25,000 prior to each one year anniversary of the lease.

The following work commitments must be made by us:

- US$25,000 by August 1, 2008
- US$25,000 by August 1, 2009
- US$50,000 by August 1, 2010
- US$50,000 by August 1, 2011
- US$25,000 by August 1, 2012 and each subsequent year

Upon commencement of production, we must pay a net smelter
  royalty of 3% to 7% based on gold prices.

Lyon Grove retains the right to require us to purchase the
  property any time after we have made application to permit and develop a mine on
  the property, subject to our continued obligation to pay the royalties, for
  US$1,000.

Subsequent to the signing of these agreements we have staked
  189 claims and the total area covered is now 6 square miles. A resource estimate
  has been completed by MineFill Services and this report, which is to NI 43-101
  standards, is filed on SEDAR.

La Bufa, Mexico

The La Bufa Project is located in the far southwest corner of
  the state of Chihuahua, Mexico near the town of Guadalupe y Calvo about 300
  kilometers from the city of Chihuahua and 200 kilometers from the town of
  Hidalgo de Parral. The project is within the Guadalupe y Calvo Mining District
  and lies within the Sierra Madre Occidental physiographic province. The La Bufa
  project is comprised of three contiguous mineral concessions totaling
  approximately 2,291.26 hectares. We hold our interest in the La Bufa Project
  through our joint venture agreements with Almaden Minerals (Almaden), as
  described below. La Bufa project is described in detail below under Properties,
  Plants and Equipment.

We originally entered into a letter of intent dated August 5,
  2005 with Almaden to form a joint venture for the exploration and development of
  the La Bufa property. Almaden controls the property through its wholly owned
  Mexican subsidiary, Minera Gavilan, S.A. de C.V., a Mexican corporation that
  holds a 100% interest in the property. The letter of intent was superseded by a
  joint venture agreement dated April 12, 2007 that we entered into with Almaden
  and Minera Gavilan. Under the joint venture agreement, we are entitled to earn a
  60% interest in the La Bufa property by undertaking an exploration work program
  on the property aggregating US$3,500,000 and issuing an aggregate of 1,550,000
  shares to Almaden as follows:

Exploration expenditures required under work program:

- By April 12,
    2008 ****US$ 500,000 (incurred)
- By April 12,
    2009 ****US$ 750,000 (incurred)
- By April 12,
    2010**** US$1,000,000
- By April 12,
    2011**** US$1,250,000

Share issuances to Almaden:

- By April 19,
    2007**** 150,000 shares (issued April 16, 2007)
- By April 12,
    2008 ****200,000 shares (issued April 8, 2008)
- By April 12,
    2009 ****200,000 shares (issued May 4, 2009)
- By April 12,
    2011 ****1,000,000 shares

The JDS Property, Nevada, USA

We are the owner of the seventy-seven (77) unpatented lode
  claims comprising the JDS project which covers approximately 1,540 acres (2.04
  sq miles). In 2004 we staked and recorded the mineral claims, which are located
  in Sections 14, 15, 22, 23 26 & 27 T25N R50E of Eureka County, Nevada. These
  mineral claims are registered in our name and are not subject to underlying
  lease payments or royalties. The JDS property is subject only to annual claim
  maintenance fees payable to the BLM and Eureka County.

In August 2008 the Company entered into an agreement with
Carlin Gold US Inc. (Carlin) whereby the property was sold to Carlin in return
for a 2% net smelter royalty. Carlin has the option to purchase 1% of the
royalty for US$500,000 for each 1⁄2 of 1% of the net smelter return.

The Hannah Property, Nevada, USA

The Hannah Property is located approximately 55 miles east of
Reno, Nevada in the southern portion of the Trinity Range north of Interstate 80
in Churchill County. Access is east from Reno via Interstate 80 and then north
on gravel and dirt roads from Hot Springs Flat to the Property.

We have an option to acquire a 100% interest in the claims
comprising the Hannah project, subject to a net smelter royalty, pursuant to an
option agreement dated December 24, 2003, as amended January 7, 2007, January
10, 2008, and February 27, 2009 between us and Larry and Susan McIntosh of
Gardnerville, Nevada. We have the option to acquire a 100% interest in the
Hannah property by making aggregate payments to the McIntoshs in the amount of
US$210,000. We may exercise this option at any time prior to the ten year
anniversary of the effective date of the agreement, being December 24, 2013. To
date US$61,000 has been paid into this option agreement.

In February 2009 the Company amended the Hannah agreement
whereby the US$25,000 due on January 10, 2009 would be lowered to US$16,000 and
be paid US$1,000 on January 10, 2009 (paid), US$5,000 on April 10, 2009 (paid),
US$5,000 on July 10, 2009 and US$5,000 on October 10, 2009. The last payment of
US$50,000 due on January 10, 2013 will be increased by an amount such that the
total payments made by the Company will total US$210,000.

In February 2009, the Company entered into an option agreement
with Enexco International Inc. (Enexco), whereby Enexco can earn a 60%
interest in the Hannah property by completing the following within a year:

- Pay the Company US$15,000 (received) upon signing the agreement
- Pay the underlying option payments, not to exceed US$25,000 for the year
- Make necessary claim maintenance fees and certain drilling requirements

If Enexco completes all the above items by February 2010, they
will have exercised their option and acquired a 60% interest in the property.
Enexco has announced that a drill program will commence on the property in June,
2009.

Reporting Issuer Status under Canadian Securities Laws

We are a reporting issuer in Canada under the securities laws
of the Provinces of British Columbia, Canada.

Capital Expenditures and Divestitures

Our actual and planned principal capital expenditures since the
beginning of our last four fiscal years have been with respect to the
acquisition of our mineral property interests and related property and equipment
as discussed above.

Takeover Offers

On January 15, 2009 the Company and LPT Capital Limited (LPT)
entered into an arrangement agreement whereby 0843037 BC Ltd., a subsidiary of
LPT, would acquire 100% of the issued common shares of the Company and in return
issue to the Companys shareholders 23,000,000 LPT shares. On February 18, 2009,
the Companys shareholders approved and completed the continuation of the
Company from federal jurisdiction to British Columbia and also approved the
transaction with LPT. On

- 18 -

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February 20, 2009 the Supreme Court of British Columbia entered
its final order approving the plan of arrangement. The completion of the
transaction will occur in conjunction with LPT completing an equity financing to
raise up to $3,380,000.

B.          
Business Overview

We are engaged in the acquisition and exploration of mineral
properties in the State of Nevada and northern Mexico. Our plan of operations
for the next twelve months is to conduct exploration of our mineral properties
in the State of Nevada and Mexico, concentrating primarily on our Pine Grove and
La Bufa properties.

We presently hold interests in two groups of mineral properties
in Nevada and one in northern Mexico, as described below:

Name of Property
      Location1.
    Pine
      Grove Property
    Yerrington, Nevada2.
    La
      Bufa
    State of Chihuahua, Mexico3.
    Hannah Property
    Churchill County, Nevada


All of our properties are in the exploration stage. We do not
produce, develop or sell any products at this time, have any commercial mining
operations, nor do any of our current properties have any known or identified
mineral resources or mineral reserves.

Our specific exploration plan for three of our mineral
properties, together with information regarding the location and access, history
of operations, present condition and geology of each of our properties, is
presented below. All of our exploration programs, except the Pine Grove
Property, are early stage in nature in that their completion will not result in
a determination that any of our properties contains commercially exploitable
quantities of mineralization. With respect to the Pine Grove Property, we
believe that extra drilling and exploration programs combined with the
completion of a feasibility study have the potential to assess whether or not a
reserve is present on this property.

Our exploration programs will be directed by our management and
will be supervised by Mr. Jeff Wilson, our vice-president of exploration. We
will engage contractors to carry out our exploration programs under Mr. Wilsons
supervision. Contractors that we plan to engage include project geologists,
geochemical sampling crews and drilling companies, each according the specific
exploration program on each property. Our budgets for our exploration programs
are set forth below.

Projects Update

During 2008 we continued our work at the Pine Grove and La Bufa
properties. Our main corporate focus was to keep advancing these properties as
they are very important to overall corporate development. No work was carried
out at the Hannah Property, Nevada. A number of work items were completed at the
Pine Grove including drilling of four holes, road building, mapping and the
staking of additional claims. At the La Bufa property we applied for and
received our drill permits. Early in 2008, we were able to begin our drill
program and 12 holes were completed by early May. All assay results have been
received and have been posted on our website. We are in the process of merging
with LPT Capital Ltd through a Plan of Arrangement which will give us a TSX-V
listing. This situation is ongoing at the time of writing this report. Also
during the year we moved our domicile to Canada from Nevada. In 2008, we
completed three private placements.

Early in the year management was able to consolidate most of
the Pine Grove property. In addition, we staked 89 claims in the area to
surround the Wilson, Wheeler, Votipka and Cavanaugh claims.

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Subsequent to year end we staked another 99 claims to double
the size of the property increasing the size of the property under our control
to 6 square miles. Also, subsequent to year end, we drilled 4 additional large
diameter core holes for metallurgical test purposes. The drilling of four
metallurgical core holes was completed in early February and the core is being
sent to McClelland Labs in Reno where all the test work will be carried out. At
present, there are at least 192 surface drill holes in the property to include
29 district exploration holes, 99 holes in the Wheeler deposit, 62 holes in the
Wilson deposit, and the 4 metallurgical core holes. There are an additional 17
underground drill holes; all underground workings are collapsed.

We have also been focusing on advancing the La Bufa property.
Throughout the latter part of 2007, we carried out systematic exploration and
sampling at La Bufa in order to better understand and plan a drill hole program
for the property. Once this had been done, we applied to the government agencies
and received permission for a 15 hole drill program. ,The drilling started in
February of 2008. The large La Bufa gold-silver property (2,291 hectares) is
located in the Guadalupe y Calvo mining district in southwestern Chihuahua
State. We are looking for the southern extension of the Rosario gold-silver vein
system which extends onto the La Bufa property for at least 1600 meters. Core
from promising zones of veins and stockwork in a number of holes returned gold
and silver values of significance. The Company completed 12 core holes in
two-hole fences across the vein system for a total of 6000 meters of drilling.
All holes were targeted to reach the 2250 meter level or deeper which was
historically productive in the adjacent Rosario mine

No work was completed on the Hannah property in 2008. A number
of other properties have been submitted to management but none has been
acquired.

Technical Reports

We have received the following NI 43-101 compliant technical
reports on our Pine Grove and La Bufa properties during 2007:

- technical report on the Pine Grove Property dated September 28, 2007, as
  amended December 4, 2007, prepared by David M. R. Stone of Minefill Services,
  Inc., ( the Pine Grove Report) and
- geological Report on the La Bufa property dated October 19, 2007, authored
  by Richard W. Bybee, P. Geo. (the La Bufa Report).

The technical reports include recommended exploration programs
on each of our Pine Grove and La Bufa properties.

Plan of Operations

Our plan of operations for the exploration of our mineral
properties over the next twelve months includes the following:

- we plan to complete the feasibility study on the property including the
  mine plan and closure plan, gather all the data for permitting, finalize the
  environmental impact statement, submit the permits to the US Forestry Service,
  carry out a 25 hole exploration program and update the resource modeling on
  the property as recommended in the Technical Report of Minefill Services,
  updated on September 30, 2008, as described below under Section 4.5.1 of this
  Listing Application,
- we plan to complete phase two of drilling, which may include some
  geophysics work, on the La Bufa property recommended in the Geological Report
  on the La Bufa property dated October

- 20 -

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19, 2007, and updated on January 5,
2009, authored by Richard W. Bybee, P. Geo., as described below under Section
4.5.1 of this Listing Application.

Our planned exploration expenditures for the next twelve months
on our Nevada and Mexican mineral properties, together with amounts due to
maintain our interest in these claims, are summarized as follows:

Name of Property
      Planned Exploration ExpenditureExploration of Pine Grove Property, Nevada
    $1,600,000Exploration of La Bufa Property, Mexico
    $600,000Exploration of Hannah Property, Nevada
    $0Property
      Acquisitions
    $100,000Administration (12 months) And Debt Paydown
    $900,000Total
    $3,200,000


We had cash of $30,199 and working capital deficit of 2,735,505
as of March 31, 2009. A large portion of this debt will be exchanged for shares
in Lincoln at the appropriate time. We will require $3,200,000 in order to carry
out our plan of operations over the next twelve months and pay down in cash a
significant part of the debt. Accordingly, we require financing of the same
magnitude in order to fund our plan of operations for the next twelve months. We
plan to complete a further private placement of our securities in order to
secure the funds necessary for us to complete our plan of operations for the
next twelve months, as outlined above. There is no assurance that this financing
will be achieved.

As we have done in the past, we may consider entering into
joint venture arrangements to provide the required funding to pursue drilling
and advanced exploration of our mineral claims. Even if we determined to pursue
a joint venture partner, there is no assurance that any third party would enter
into a joint venture agreement with us in order to fund exploration of our
mineral claims. If we entered into a joint venture arrangement, we would likely
have to assign a percentage of our interest in our mineral claims to the joint
venture partner.

Our exploration plans will be continually evaluated and
modified as exploration results become available. Modifications to our plans
will be based on many factors, including: results of exploration, assessment of
data, weather conditions, exploration costs, the price of gold and available
capital. Further, the extent of our exploration programs that we undertake will
be dependent upon the amount of financing available to us.

Employees

We have no employees and all activities and exploration
programs are carried out through contracts with third parties, including
geologists, engineers, drilling companies.

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Government Regulation and Environmental Protection
Requirements

We will be required to obtain work permits from the United
States Bureau of Land Management (BLM) and the US Forestry Service for any
exploration work on our Nevada mineral properties that results in a physical
disturbance to the land. We will not be required to obtain a work permit for any
phase of our proposed mineral exploration programs that does not involve any
physical disturbance to the mineral claims, such as data compilation, field work
and geochemical surveys. We will be required to obtain work permits for all
drilling operations that we plan to conduct on our mineral properties. Prior to
commencing drilling operations on any of our properties, we must submit a
Notice of Intent to Operate to the BLM and post a bond as security for our
obligation to complete reclamation activities. We will be required by the Bureau
of Land Management to undertake remediation work on any work that results in
physical disturbance to the mineral claims, including drilling programs. We
estimate that the cost of remediation work for our drilling programs will be
approximately $25,000 for each drilling program. The estimated amount of
remediation work is included within our budgets for our exploration programs.
The actual amount of reclamation cost will vary according to the degree of
physical disturbance.

We have made all current Bureau of Land Management filings for
our Nevada properties. All claims are in good standing until September 1, 2009.
Applicable county fees have also been paid.

The La Bufa property is an exploration concession granted by
  a branch of the Mexican government and is for a three year terms. Thereafter,
  the La Bufa property may be converted into an exploitation concession that would
  have a term of fifty years. The La Bufa property is presently beginning the
  second year of the term of its exploration concession. An annual fee of $15.72
  and $31.62 pesos per hectare is due to the Mexican federal government. The rate
  increases over time. The total area of the La Bufa exploration concession is
  2291.26 hectares. These amounts are subject to change and adjustment by the
  Mexican authorities.

Competition

We are a junior mineral resource exploration company. We
compete with other mineral resource exploration companies for financing and for
the acquisition of new mineral properties. Many of the mineral resource
exploration companies with whom we compete have greater financial and technical
resources than those available to us. Accordingly, these competitors may be able
to spend greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their mineral
properties. In addition, they may be able to afford more geological expertise in
the targeting and exploration of mineral properties. This competition could
result in competitors having mineral properties of greater quality and interest
to prospective investors who may finance additional exploration and development.
This competition could adversely impact on our ability to achieve the financing
necessary for us to conduct further exploration of our mineral properties.

We will also compete with other junior mineral exploration
companies for financing from a limited number of investors that are prepared to
make investments in junior mineral exploration companies. The presence of
competing junior mineral exploration companies may impact on our ability to
raise additional capital in order to fund our exploration programs if investors
are of the view that investments in competitors are more attractive based on the
merit of the mineral properties under investigation and the price of the
investment offered to investors.

We will also compete with other junior and senior mineral
companies for available resources, including, but not limited to, professional
geologists, camp staff, helicopter or float planes, mineral exploration supplies
and drill rigs.

- 22 -

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Research and Development Expenditures

We have not spent any amounts on research and development
activities since our inception. Our planned expenditures on our exploration
programs are summarized under the section of this Registration Statement
entitled Description of Properties.

C.          
Organizational Structure

We are not part of a group and have one wholly-owned
subsidiary, Minera Lincoln de Mexico, S.A. de C.V. (Lincoln Mexico) which was
incorporated in Mexico.

D.          
Property, Plants and Equipment

The following sets forth information relating to our material
mineral properties.

Pine Grove Property, Nevada, United States

Ownership Interest

Wheeler Patent and Wheeler Millsite Patent Claims

On July 13, 2007, we entered into an agreement with the Wheeler
Mining Company (Wheeler) to lease Wheelers 100% owned Wheeler and Wheeler
patent claims in Lyon County, Nevada from July 13, 2007 to December 31, 2022
with an exclusive option to renew the lease by written notice to December 31,
2023. If the property is and remains in commercial production by November 1 of
each year after 2022, we may renew the lease for a period of one year by
delivering written notice to the owner prior to November 15 of that year. We
must produce a bankable feasibility study on the properties by July 1, 2009,
extended to December 31, 2010, and obtain all necessary funding to place the
properties into commercial production. We must pay a net smelter royalty of 3%
(at a gold price of US$450) to 7% (at a gold price of US$701) upon commencement
of commercial mining production based on gold prices and the Company must pay a
5% net smelter royalty on metals or minerals other than gold produced and sold
from the properties.

Harvest Lode Claim, Winter Harvest Lode Claim and Harvest
Fraction Lode Claim

Pursuant to an agreement dated July 30, 2007, we purchased from
Harold Votipka (Votipka) the Harvest lode claim, the Winter Harvest lode
claim, and the Harvest fraction lode claim, each located within the Pine Grove
Mining District in Lyon County, Nevada. The purchase price was US$12,000, which
we have paid, and includes a 5% net smelter royalty on production payable to
Votipka.

Wilson Mining Claim Group

On August 1, 2007, we entered into an agreement with Lyon Grove
LLC, (Lyon Grove) to lease the Wilson Mining Claim Group located in Lyon
County, Nevada from August 1, 2007 to July 31, 2022, with an option to purchase.
We can extend the term of the lease for up to ten additional one year terms
providing we are conducting exploration mining activities at the expiration of
the term immediately preceding the proposed extension term.

- 23 -

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The following lease payments must be made by us:

US$10,000 upon signing the agreement, which we have paid and

US$25,000 prior to each one year anniversary of the lease, (the
first one having been made).

We advanced to Lyon Grove a loan of $5,000 bearing an interest
rate of 5% per annum to be repaid by July 31, 2008. The loan was repaid.

The lease payment made for any one calendar year may be
credited against any net smelter royalty due and payable during the same
calendar year.

The following work commitments must be made by us:

- US$25,000 by August 1, 2008
- US$25,000 by August 1, 2009
- US$50,000 by August 1, 2010
- US$50,000 by August 1, 2011
- US$25,000 by August 1, 2012 and each subsequent year

Upon commencement of production, we must pay a net smelter
royalty of 3% to 7% based on gold prices.

Lyon Grove retains the right to require us to purchase the
property any time after we have made application to permit and develop a mine on
the property, subject to our continued obligation to pay the royalties, for
US$1,000.

Additional Staked Claims

Subsequent to the signing of these agreements we have staked
189 claims and the total area covered is now 6 square miles.

- 24 -

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List of Mineral Claims  Pine Grove Project

Claim Name
      BLM Serial #
      Type
      Area-acresLG1 to LG60 (90
        claims)
      NMC0960776 - NMC0960865
      Unpatented
      1859.504CONTAINSWheeler Patent
        Wheeler Millsite
      
      Patented
        Patented
      73.705
        4.989Wilson Patent
      
      Patented
      33.781Harvest Lode  Winter Harvest  Harvest Fraction
      NMC793071
        NMC800355 NMC800356
      Unpatented
        Unpatented Unpatented
      20.66
        20.66
        20.66


- 25 -

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Location and Access

The Pine Grove project is located 20 miles due south of
Yerington, Nevada via State Highway 208 (paved) to the East Walker Road (gravel)
to the Pine Grove Canyon drainage. A map showing the location and access to the
Pine Grove property is presented below.

- 26 -

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- 27 -

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A map showing the location of the claims is below.



History of Operations

In 1969, Quintana Minerals of Houston, Texas reportedly was
interested in the copper potential of the property and undertook a program of
surface mapping and completed one drill hole. The results of that program are
not known, and the log/assays from the one drill hole were not available at the
time of writing this report.

In 1981, Lacana Mining Corporation of Toronto, Ontario explored
the property for gold. This work consisted primarily of surface mapping. No
further details on Lacanas work program or results are available.

In 1988 the property was optioned by Teck Resources of
Vancouver, British Columbia. Teck undertook the most extensive exploration
program to date, drilling 185 holes for a total of 68,000 feet, and expenditures
of US$2.2 million. Teck dropped their option 1992.

Silver Standard briefly explored the property in 1994 but they
too subsequently dropped their option.

Present Condition of the Property and Current State of
Exploration

While a NI 43-101 has been completed on the property showing
resources there are no known reserves on the Pine Grove project, and Lincoln has
no plant or equipment on this property.

Geology

The region is dominated by Basin and Range-style, north
trending, extensional fault-block mountain ranges separated by alluvium-filled
valleys. The ranges have cores of Mesozoic volcanic, sedimentary and intrusive
rocks that are in turn overlain by Tertiary sedimentary and volcanic rocks. The
Pine Grove Hills occupy a west-dipping structural block that is bounded on the
east side by a series of faults, some of which transect the Pine grove District.

- 28 -

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The oldest rocks in the region are a series of middle Triassic
to middle Jurassic metavolcanic and metasedimentary rocks and coeval intrusions
that are part of a west facing continental are that extended along the western
margin of North America in the middle Mesozoic. The sequence has been divided
into four packages by Schweickert and others (1991), consisting of a middle to
upper Triassic package sub aerial volcanic rocks, an upper Triassic platform
carbonate sequence, an upper Triassic to lower Jurassic basinal sedimentary rock
package and a middle calc-alkaline volcanic suite.

North to northwest striking, steeply-dipping faults were active
during emplacement of the Mesozoic intrusions. The faults down-drop a large
cast-west-trending structural block that includes the Yerington Batholith.
Faults within the block often contain dikes of granite porphyry and served as
loci for hydrothermal fluids.

The most significant geologic feature in the district is a
northwest-striking, northeast-dipping normal fault that juxtaposes Mesozoic
intrusive rocks in the footwall against intrusive capped by Tertiary sedimentary
rocks in the hanging wall. This structure herein termed the Pine Grove fault
is a diffuse, 200 m-wide extensional shear zone that forms part of the eastern
boundary of the Pine Grove Hills structural block. The fault originally had a
steep dip but has been rotated to nearly flat by regional extension. Numerous
parallel dikes occur within the fault and the structure served as the locus for
mineralization in the district.

The deposit at Wheeler comprises a elliptical shaped tabular
zone measuring some 400 m by 200 m in plan, by about 90 m in thickness. It lies
parallel the Pine Grove fault and its attendant dikes, dipping at about 30
degrees to the northeast. The deposit consists of one to three subparallel,
irregular zone of anomalous gold mineralization from 3 m to over 15 m thick that
anastomose and coalesce.

Two quartz veins were emplaced early in a transitional
chlorite-actinolite alteration event. These were followed by sulphide veinlets,
fracture coatings and thin quartz veins occupying brittle faults. The first set
does not contain appreciable gold mineralization, however, the second does.

Mineralization at Wilson is confined to discrete tabular zones
in the granodiorite that dip between 0 and 10 degrees north. Two or three, and
in places up to six, separate, stacked mineralized zones from 3 to 20 m thick
are separated by thicker, un-mineralized ryholite porphyry and dacite dikes. The
deposit is traceable for 150 m down-dip, and the mineralized zones extend
virtually flat for at least another 350 m down-dip to the north where gold
bearing veins have been encountered in drill holes. The mineralization at Wilson
is much less disrupted than at Wheeler due to a lack of significant shearing
events. Alteration at Wilson is similar to that found at Wheeler, although the
intensity is much weaker.

Resource Classification

Resources are summarized in the tables below for Wilson and
Wheeler, respectively. The resources have been classified as Inferred, according
the CIM (2005) resource classification standards.

Cautionary Note to Investors Concerning Estimates of
      Inferred ResourcesThe following table uses the term inferred resources.
      Lincoln advises that while this term is recognized and required by
      Canadian securities regulations (under National Instrument 43-101
      Standards of Disclosure for Mineral Projects), the U.S. Securities
      and Exchange Commission does not recognize it. Inferred resources have a
      great amount of uncertainty as to their existence, and great uncertainty
      as to their economic and legal feasibility. It cannot be assumed that all
      or any part of an Inferred Mineral Resource will ever be upgraded to a
      higher category. Under Canadian rules, estimates of Inferred Mineral
      Resources may not form the basis of feasibility or preliminary feasibility
      studies, except in rare cases. Investors are cautioned not to assume
      that any part or all of an inferred resource exists, or is
      economically or legally mineable.


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Undiluted Inferred Mineral Resources by Cutoff Grade  Wilson

(assays capped at 0.5 opt)

(assays capped at 0.5 opt) Cutoff
      (opt)
      Tons
      Au (opt)
      Cu (%)
      Au (oz)
      Cu (lbs)0.005
    4,647,000
    0.018
    0.0210
    83,531
    1,953,0000.010
    2,738,000
    0.025
    0.0234
    69,744
    1,284,0000.015
    1,602,000
    0.035
    0.0252
    56,056
    807,000


Undiluted Inferred Mineral Resources by Cutoff Grade -
Wheeler

(assays capped at 0.5 opt)

Cutoff (opt)
      Tons
      Au
        (opt)
      Cu
        (%)
      Au
        (oz)
      Cu
        (lbs)0.005
    4,367,000
    0.059
    0.0432
    257,839
    3,774,0000.010
    3,321,000
    0.075
    0.0465
    250,236
    3,087,0000.015
    2,647,000
    0.091
    0.0476
    241,981
    2,520,000


Interpretation and Conclusions of Report

The Pine Grove district hosts several gold bearing quartz-vein
stockwork style deposits emplaced in Mesozoic granitic host rocks. Exploration
by Teck Resources in the early 1990s outlined a bulk tonnage low grade gold
resource of roughly 2.5 million tons grading 0.06 opt containing 150,000 ounces.
These resources are the un-mined remnants from mining carried out in the
district in the late 1800s.

The author of the Technical Report has classified the resources
as inferred as defined in Section 1.2 and 1.3 of NI43-101.

A re-evaluation of the Teck data by MineFill produced similar
results for the Wilson deposit, however, at Wheeler the MineFill estimate was
considerably higher in both tons and grade. A detailed review of the drill
assays superimposed on the Teck polygons revealed large zones of mineralized
material that were not included in the Teck estimate.

There appears to be sufficient resources to justify further
exploration at Pine Grove, and recommendations are provided herein. The Wheeler
deposit shows the best immediate potential since it contains the bulk of the
resources, and hosts a higher grade. A ground reconnaissance of the area
surrounding the Wheeler and Wilson mines suggests that there may be additional
resources which could be added with additional exploration. During the site
visit the author noted a number of caved adits and mine dumps in an adjacent
drainage to the north of Wilson.

Recommendations of the Technical Report

- 30 -

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Based on the information compiled to date, the Technical Report
concluded that the Pine Grove project appears to offer significant potential for
re-activating a historical mining district. The Technical Report further
concluded and recommended that, before a decision can be made, additional data
collection and verification is warranted. Management has put together a work
plan for the next 12 months which includes the following:

Additional Exploration

- Lands  additional claims - $30,000
- Photogrammetry  stereo orthophotos and digital topography - $30,000
- Reverse circulation drilling(drilling Wilson and Wheeler) - $175,000

(Total = 25 holes for 23,000 ft. at an
all-in cost of $20.00/ft. )

- Assaying  1800 samples - $35,000
- Contract geologists - $100,000
- Drill pads and reclamation work - $30,000
- GIS work - $10,000
- Resource update - $25,000

Sub-Total Budget - $435,000

The objective of this work is to confirm the grades and
continuity of mineralization per the Teck drilling and resource estimate, and to
test the lateral margins of the deposits at Wilson and Wheeler.

Metallurgical Assessment

|• | Metallurgical investigation of 4 core holes drilled for
      this purpose - $100,000
|- | -------------------------------------------------------------------------------------
|  |                                                                                      
|  | o                                                                                    
|  |                                                                                      
|  | o                                                                                    
|  |                                                                                      
|  | o                                                                                    

|Feasibility including Mine Plans, Closure
      Plans   | - $500,000  
|------------------------------------------------------- | ------------
|                                                        |             
|Environmental, Archaeological, Water, etc
      Studies | - $400,000  
|                                                        |             
|Permitting procedures                                   | - $100,000  
|                                                        |             
|Miscellaneous Costs                                     | - $65,000   
|                                                        |             
|Total Cost                                              | - $1,600,000

There is no assurance that further exploration or feasibility
work will result in a final evaluation that a commercially viable mineral
deposit exists on this mineral property. Lincoln will require additional
financing in order to pursue the work. Lincoln does not have sufficient
financing to undertake full

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exploration or studies of these mineral claims at present and
there is no assurance that we will be able to obtain the necessary financing.

La Bufa Property, Chihuahua, Mexico

The La Bufa Project is located in the far southwest corner of
the state of Chihuahua, Mexico near the town of Guadalupe y Calvo about 300
kilometers from the city of Chihuahua and 200 kilometers from the town of
Hidalgo de Parral. The project is within the Guadalupe y Calvo Mining District
and lies within the Sierra Madre Occidental physiographic province. The La Bufa
project is comprised of three contiguous mineral concessions totaling
approximately 2,291.26 hectares and is held by Lincoln Gold through letters of
intent to joint venture and joint venture agreements with Almaden Minerals and
their wholly owned Mexican subsidiary Minera Gavilan, S.A. de C.V. The La Bufa
Property surrounds mineral concessions of approximately 439.24 hectares held by
Gammon Gold where the Rosario Vein was discovered in 1836 and where nearly all
of the historic production from the district was derived.

Location and Access

The La Bufa exploration concession is located in the southwest
extremity of the state of Chihuahua, Mexico and is centered on the small town
(mining district) of Guadalupe y Calvo in the Sierra Madre Occidental. The
single exploration concession adjoins and surrounds other concessions within the
district. Net area is 2,291.26 hectares (approximately 5,661.7 net acres). The
nearest commercial airport is in the city of Chihuahua, 480 km by road from the
property. All-season vehicle access to the property is excellent. The town of
Guadalupe y Calvo is the terminus of the paved, well-maintained Mexico Highway
24 which winds 270 kilometers from mining town of Hidalgo del Parral to the
northeast. Access on the concession is via dirt roads. A map showing the
location and access to the La Bufa property is presented below.

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The La Bufa Property consists of three contiguous Mexican
Exploration Concessions, La Bufa (No. 219036), La Bufa 1 (No. 222724), and La
Bufa 2 (No. 223165) totalling 1,916.21 hectares, as follows:

Name
      Type
      Title
      File
      Area Hect.
      Issued
      Expires
      Tax Rate
      Pesos
      US$La Bufa
    Explor.
    219036
    16/31696
    1040.7594
    31/Jan/03
    30-Jan-09
    $6.0100
    $6,256
    $585La Bufa
    Explor.
    222724
    16/32275
    485.0000
    27-Aug-04
    26-Aug-10
    $6.0100
    $2,916
    $273La Bufa
    Explor.
    223165
    16/32529
    765.5000
    28-Oct-04
    27-Oct-10
    $6.0100
    $4,602
    $430


The La Bufa Property consists of three contiguous Mexican
concessions issued by the Direccion General de Minas in 2003 and 2004 to Minera
Gavilan, S.A. de C.V., a Mexican subsidiary controlled 100% by Almaden Minerals
Ltd. a publicly traded Canadian junior listed on the Toronto Stock Exchange
(AMM).

On August 8, 2005, we executed a letter of intent to joint
venture the property with Almaden whereby we could earn a 51% interest in the
property by undertaking exploration expenditures in the minimum amount of US$2.0
million over 4 years.

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On April 12, 2007, we entered into an option agreement (the
Option Agreement) with Almaden to acquire a 60% interest in the La Bufa
Property. The Option Agreement supersedes and replaces the August 8, 2005 letter
of intent to joint venture the property with Almaden. Under the Option
Agreement, we will be entitled to earn a 60% interest in the La Bufa Property by
(a) undertaking a work program on the Bufa Property aggregating US$3,500,000 in
expenditures for mining work, and (b) issuing an aggregate of 1,550,000 shares
of our Common Shares to Almaden pursuant to the terms of the Option Agreement.

The US$3,500,000 of expenditures for mining work must be
incurred in accordance with the following schedule:

- spend US$500,000 in expenditures (which must include drilling) on the La
  Bufa Property by the first anniversary of the effective date of the Option
  Agreement (the Effective Date). This obligation is a firm commitment;
- spend an additional US$750,000 on the La Bufa Property by the second
  anniversary of the Effective Date;
- spend an additional US$1,000,000 on the La Bufa Property by the third
  anniversary of the Effective Date; and
- spend an additional US$1,250,000 on the La Bufa Property by the fourth
  anniversary of the Effective Date.

The 1,550,000 shares must be issued in accordance with the
following schedule:

- 150,000 shares within 5 business days from the Effective Date;
- 200,000 shares on or before the first anniversary of the Effective Date;
- 200,000 shares on or before the second anniversary of the Effective Date;
  and
- 1,000,000 shares on or before the fourth anniversary of the Effective Date.

During the term of the Option Agreement, we will be obligated
to maintain the La Bufa Property in good standing by completing and filing, or
making payment in lieu thereof, of all necessary assessment work on the La Bufa
Property and by paying all taxes.

Upon the completion of the expenditure requirements and the
share issue requirements as set forth in Option Agreement, we shall be deemed to
have earned an undivided 60% interest in the La Bufa Property. Upon our earning
an interest in the La Bufa property, all operations shall be conducted by us and
Almaden on a joint venture basis. The basic terms of the joint venture are
prescribed in the Option Agreement.

We have the right to terminate the Option Agreement by giving
Almaden 30 days notice of termination. Upon termination by us, we will have no
further obligation to issue any shares or incur any further expenditures for
mining work on the La Bufa Property, other than in respect of obligations that
had accrued to the date of termination. We have completed the issuance of the
initial 150,000 shares, the second issuance of 200,000 shares, and the third
issuance of 200,000 shares to Almaden.

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History of Operations

Gold was discovered in the Guadalupe y Calvo district in 1835
with extended periods of production up to 1939. The gold-silver veins were
exploited largely by underground operations. A mint was constructed in 1844 by
the Mexican government to take advantage of the precious metals production in
the district.

Modern exploration work in the district has centered largely in
the area of past production which is surrounded completely by the La Bufa
concessions. Although the vein system extends beyond the area of the old
workings, little exploration work has been conducted. Asarco drilled two angle
core holes in the 1970s on La Bufa ground with both holes encountering
ore-grade gold and silver. A previous joint venture on the La Bufa Property
between Almaden Minerals Ltd. and Grid Capital Corporation resulted in the
drilling of five angle core holes (666.15 m) in three locations during December
2004. Hole GUD04-03 returned encouraging gold-silver-lead-zinc assays from
multiple, narrow-vein intercepts (Almaden Minerals News Release, Jan. 24, 2005).
However, Grid Capital backed out of the joint venture for undisclosed reasons.
We have since entered into a new joint venture with Almaden to explore the La
Bufa concession.

The La Bufa Property lies within the Guadalupe y Calvo district
which is one of many epithermal gold-silver districts in the Sierra Madre
Occidental of western Mexico. The Sierra Madre Occidental is characterized by
deeply incised mountains, and has a total relief of about 3,000 meters. Most of
the bedrock exposed in the vicinity of Guadalupe y Calvo consists of an upper
volcanic series of bedrock which is commonly hundreds of meters in thickness.
However, erosional exposures of a lower volcanic series of rock, which is
favourable to mineralization and occurs in ranges up to 1,000 meters in
thickness, are exposed along the eastern flank and central portions of the
northwest-trending Guadalupe River Valley that traverses the La Bufa concession.
The contact between the upper and lower volcanic series of rock is rarely
exposed.

District mineralization occurs as northwest-trending,
epithermal gold-silver-lead-zinc quartz veins and breccia veins with local
attending stockworks. The veins occur only in the lower volcanic series. Veins
typically range from 1 to 3+ meters in true thickness and are generally steeply
dipping but may also have shallow dips. Historic production in the district
encountered local mineralized zones measuring tens of meters in thickness. Past
mining on the Rosario vein extended for a continuous strike length of over 600
meters on seven levels. The vein system appears to consist of multiple strands
and extends south-eastward for a distance of at least 1700 meters across the La
Bufa Concession. The main paved road entering the town has a road cut that
exposes a 70-meter zone containing multiple quartz veins.

Asarco drill holes on the La Bufa Property encountered
encouraging results. Hole H-1 hit 1.4 meters grading 9.0 gram per tonne gold +
324 grams per tonne silver. Hole H-2 hit 1.4 meters grading 6.3 grams per tonne
gold + 280 grams per tonne silver. Grid Capital drilled four core holes with
their best intercept of 1.6 meters grading 9.0 grams per tonne gold + 447 grams
per tonne silver.

Exploration Programs at La Bufa

The La Bufa Property is in the early stage of exploration and
presently contains no known gold or silver resources. There is no plant or
equipment on the Property. The concessions encompass the town of Guadalupe y
Calvo. Potential for gold-silver veins exists primarily along the eastern side
of the town in low, forested and brush-covered hills.

In 2006, we conducted aerial photography over the entire
district for the purpose of generating a topographic base map suitable for
detail geologic mapping. A Mexican survey crew was contracted to survey control
points required to produce the topographic maps. However, heavy snow delayed the
survey crew from access to the survey area. Surveying of the property was
started in 2007. In February 2008 a core drilling program was initiated and
completed on the La Bufa gold-silver property (2,291

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hectares) in the Guadalupe y Calvo mining district in
southwestern Chihuahua State. Twelve widely spaced angle core holes focused on
the El Rosario gold-silver vein system which extends southward onto the La Bufa
property from the historic Rosario mine. The exploration holes are generally 100
to 150+ meters apart and most are drilled in two-hole fences at 45°and 60°.
Drilling is designed to determine the most favourable portions of the vein
system in the southern part of the La Bufa property. Total drilling to date is
approximately 4,466 meters with hole LB-DDH-012 still in progress.

Encouraging results have been received from over 300 meters of
vein system strike length which remains open to the northwest towards the
adjacent Rosario mine (Gammon Gold) over 400 meters away. Twelve drill holes are
now present in the Santo Niño zone. Seven holes are from Lincoln Golds drilling
program (2008) and five holes are from a previous operator, Grid Capital
Corporation (2004). Assays are pending from holes 11 and 12. Gold-silver
mineralization occurs in steeply dipping quartz-breccia veins and stockworks
hosted in Lower Volcanics (tuffs) which overlie various coarse-grained
granitic basement rocks. Results to date suggest that gold-silver mineralization
occurs in the upper portion of the vein system.

Once all assays and drill logs are completed, Lincoln Gold will
interpret the data and plan a phase 2 exploration program. Phase 2 will include
off-set drilling of high-grade intercepts as well as step-out drilling towards
the El Rosario mine. The company eagerly waits to initiate drilling in the
northwestern portion of the La Bufa property where past surface samples returned
assays ranging from1.07 to 4.28 gpt gold and 186 to 838 gpt silver. At least 4
km of potential vein system strike length are present northwest of the Rosario
mine.

The Geological Report includes a recommendation that we acquire
the El Chapito concession as soon as possible and preferably before any drilling
is conducted.

Recommendations of the Geological Report

Based on the scope and the results of exploration activities
completed to date on the Property, a two-phase exploration program is
recommended. Because the southern La Bufa concession is at a more advanced stage
of exploration and drill targets have been identified, phase-1 would consist of
a core drilling program that could be initiated as soon as drill contracts can
be made, necessary permits obtained and logistical support are in place. A core
drilling program of 15 holes averaging 400 meters each is recommended as phase-1
and is considered the minimum required to give a reasonable chance for success.
Proposed sites have been plotted on a plan map (below) and two or more holes
drilled at different angles of inclination could be completed at selected sites
in order to test down-dip continuity of the structures. Surface owners in
Guadalupe y Calvo include private landowners and the city government and initial
contact with these surface owners has been made in order to secure access
permission.

Preliminary metallurgical studies should be included as part of
the drilling program and would include bottle roll tests along with thin section
and polished section investigations to determine basic mineralogy. Phase-1 of
the recommended work program would also consist of continued reconnaissance
throughout the concessions, including mapping and sampling in the northern
concessions of La Bufa 1 and La Bufa 2. A district-wide structural study using
satellite imagery, air photos and verification by ground checks should also be
part of this program. In addition, follow-up work by mapping and rock sampling
in areas of soil anomalies related to quartz veinlets in altered Upper Volcanic
Group rocks at the northern limit of the soil grid is needed. The district-wide
reconnaissance, sampling and structural interpretation studies that are
recommended should be completed and are not dependent on results of the drilling
recommended in the southern portion of the La Bufa concession. The additional
reconnaissance and related work could be carried out consecutively during the
phase-1 drilling and if drill targets are identified they could be tested during
the phase-2 drilling program.

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It is recommended that Phase-2 consist of a greatly expanded
core drilling program that would provide a geologic, assay and preliminary
metallurgical database of sufficient size and quality to be the basis for
initial resource modeling. This phase-2 program would require the drilling of
40-50 holes on approximately 25-meter centers. Initial site planning and land
use issues would also be addressed during this phase. The initiation of phase-2
program will be dependent on successful results of phase-1 drilling. Successful
drilling results for phase-1 would be defined as the discovery of gold-silver
mineralization, along the Santo Niño Vein or parallel structures in the footwall
and hanging wall, with potentially economic grades and widths that would justify
continued expenditures on the Property.

The anticipated budget over the next 12 months for the next
work program recommended on the La Bufa property is set out below:

Activity  Amount/Persons
      Time Required
      
      Amount ($US)DrillingDrilling
    4,000 meters (10 holes at 400m)
    90
      days
    
    320,000Drilling Support
    2 geologist, helpers, includes
      travel
    90 days
    
    60,000and field expensesSite Facilities
    Equipment, Storage and Consumables
    120
    
    30,000Analytical
    1,000 samples
    60
      days
    
    27,000Metallurgical
    20 samples
    90
      days
    
    15,000Data Workup
    1 geologist, 1 GIS
    45
      days
    
    30,000Drilling
      Total
    
    
    
    492,000DistrictReconnaissance
    1 geologist
    40
    
    30,000IP Survey
    5 kilometers
    
    
    30,000Data Workup
    1 geologist, 1 GIS
    30
    
    25,000District
      Total
    
    
    
    85,000Sub Total
    
    
    
    $577,000Drilling &
      IP
    Contingency
    
    
    23,000Total
    
    
    
    $600,000


We plan plans to complete the exploration program outlined
above over the next 12 to 18 months, subject to it achieving the necessary
financing.

There are several key factors that can delay completion of the
exploration program as follows:

- delays in the permit approval process for drilling;
- limited availability of core rigs in Mexico;
- lack of funding.

Factors that could cause exploration costs to be greater than
anticipated are largely from drilling conditions and include the following:

- caving ground;

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- lost circulation;
- artesian water;
- stuck drill steel;
- drilling in near proximity to the town (special compensation, noise, etc.).

The exploration program is being managed on site by Filiberto
Lopez who has extensive experience in Mexico. Our vice-president of exploration,
Jeffrey L. Wilson, P. Geol. State of Utah, will oversee the project.

HANNAH PROPERTY, CHURCHILL COUNTY, NEVADA, USA

The Hannah Property is located approximately 55 miles east of
Reno, Nevada in the southern portion of the Trinity Range north of Interstate 80
in Churchill County. Access is east from Reno via Interstate 80 and then north
on gravel and dirt roads from Hot Springs Flat to the Property.

Lincoln has an option to acquire a 100% interest in the claims
comprising the Hannah project, subject to a net smelter royalty, pursuant to an
option agreement dated December 24, 2003, as amended January 7, 2007 and January
10, 2008, between us and Larry and Susan McIntosh of Gardnerville, Nevada.
Lincoln has the option to acquire a 100% interest in the Hannah property by
making aggregate payments to the McIntoshs in the amount of US$210,000. Lincoln
may exercise this option at any time prior to the ten year anniversary of the
effective date of the agreement, being December 24, 2013. To date US$61,000 has
been paid into this option agreement.

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Location and Access

The Hannah Property is located approximately 55 miles east of
Reno, Nevada in the southern portion of the Trinity Range north of Interstate 80
in Churchill County. Access is east from Reno via Interstate 80 and then north
on gravel and dirt roads from Hot Springs Flat to the Property. A map showing
the location of and access to the Hannah property is presented below:



Ownership Interest

The Hannah property is comprised of twenty-three (23)
unpatented lode claims covering approximately 460 acres (0.72 sq. miles) in
Churchill County, Nevada.

Lincoln has an option to acquire a 100% interest in the claims
comprising the Hannah project, subject to a net smelter royalty, pursuant to an
option agreement dated December 24, 2003 between us and Larry and Susan McIntosh
of Gardnerville, Nevada, as optionors. Lincoln has the option to acquire a 100%
interest in the Hannah property by making aggregate payments to the optionors in
the amount of US$210,000. Lincoln may exercise this option at any time prior to
the ten year anniversary of the effective date of the agreement, being December
24, 2013. Lincoln is obligated to make the following option payments in order to
maintain our option agreement in good standing:

Date
        of Payment
      Amount of Option PaymentDecember 24,
      2003
    US$5,000 (paid)January 10, 2005
    US$5,000 (paid)January 10, 2006
    US$10,000 (paid)


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Date of Payment
      Amount of Option PaymentJanuary 10, 2007
    US$15,000 (in quarterly payments)January 10, 2008
    US$20,000 (in quarterly payments)January 10, 2009
    US$16,000 (US$6,000 paid)January 10, 2010
    US$25,000January 10, 2011
    US$25,000January 10, 2012
    US$25,000January 10, 2013
    US$50,000


Lincoln will be deemed to have exercised the option upon
completion of the above option payments at which time Lincoln will be entitled
to a 100% interest in the Hannah property, subject to the payment of a net
smelter royalty to the optionors. The net smelter royalty will be calculated as
3% of net smelter returns, as defined in the option agreement, if the price of
gold is less than or equal to US$400 per ounce, and 4% of net smelter returns if
the price of gold is greater than $400 per ounce. If Lincoln exercises the
option, Lincoln will have the right to reduce the net smelter royalty by 1%, up
to a maximum of 2%, upon the payment of US$500,000 to the optionors for each 1%
of reduction as set out in the table below:

Gold Price (US$ per ounce)
      Net Smelter Royalty 
        payable on
      execution of the Agreement
      Net Smelter Royalty 
        payable after first
      payment of US$500,000
      Net Smelter Royalty 
        payable after second
      payment of US$500,000Less than or equal to $400
    3%
    2%
    1%Greater than $400
    4%
    3%
    2%


If Lincoln completes a positive feasibility study for the
development or mining of mineral products on the Hannah property and obtains all
government approvals, consents, licenses and permits to construct, develop or
operate a mine on the Hannah property prior to January 10, 2013, Lincoln will be
obligated purchase the Hannah property prior to the commencement of mining of
mineral products. In this event, the purchase price for the Hannah property
shall be the sum of all unpaid option payments due to the optionors through
January 10, 2013.

Lincoln has the exclusive right to conduct exploration on the
Hannah property during the term of the option agreement, provided that Lincoln
makes the required option payments. Lincoln is obligated to make all federal and
county claim maintenance fees in a timely manner to keep the claims in good
standing during the term of the option agreement. In the event that Lincoln does
not make any required option payment, then the optionors will be entitled to
terminate the agreement and Lincoln will lose our interest in the property.
However, Lincoln will not have any obligation to make further option payments in
the event of termination due our inability to make any required option payment.
Lincoln may surrender its interest in the property and terminate the agreement
at its election upon written notice to the optionors. In this event, the
optionors will retain all option payments paid pursuant to the agreement.

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Lincoln has paid the BLM and County annual claim maintenance
fees that are required to be made. Lincoln is not obligated to complete any
minimum exploration expenditures or other work commitment in order to maintain
its option on the Hannah property.

In February 2009, the Company entered into an option agreement
with Enexco International Inc. (Enexco), whereby Enexco can earn a 60%
interest in the Hannah property by completing the following within a year:

- Pay the Company US$15,000 (received) upon signing the agreement
- Pay the underlying option payments, not to exceed US$25,000 for the year
- Make necessary claim maintenance fees and certain drilling requirements

If Enexco completes all the above items by February 2010, they
will have exercised their option and acquired a 60% interest in the property.
Enexco has announced that a drill program will commence on the property in June,
2009.

History of Operations

Various old shafts, adits, and numerous small prospects are on
the Hannah Property from prospecting in the early 1900s. Cominco was active in
the general area in the 1960s and Chevron drilled three scattered holes on the
claim block in the 1980s. None of Chevrons holes tested the Hannah gold
target. Four backhoe trenches were dug by Cordex in the late 1990s, however no
follow-up work was conducted. NDT Ventures held the property in 2002 but
conducted no significant work. A total of 50 soil samples and 329 rock-chip
samples have been collected from the property and assayed.

Present Condition of the Property and Current State of
Exploration

The Hannah Property is in the early stage of exploration and
presently contains no known gold or silver resources. Lincolns current state of
exploration consists of geologic mapping, soil and rock-chip sampling, a ground
magnetometer survey, and 11 reverse-circulation drill holes (4,815 ft) drilled
by the Company in 2005. Shallow ore-grade gold and silver mineralization is
present in two adjacent drill holes.

There is no plant or equipment on the Hannah Property other
than some scattered remnants of past prospecting. The property consists of
barren land with no improvements with the exception of dirt roads.

Lincoln has no formal reports on the Hannah Property. However,
Lincoln does have all soil and rock-chip sample maps and results, a preliminary
geologic map, a ground magnetometer map, and drill hole logs and assay results
from 11 reverse-circulation drill holes.

Lincoln conducted in 2006 a ground magnetometer survey in the
vicinity of mineralized drill holes H-1 and H-11 which were drilled in a
northwest-trending, highly oxidized shear zone. Results show a magnetic high to
the northwest buried under pediment gravels and a magnetic low to the southeast
beneath alluvium. The abrupt transition area from low to high magnetic response
offers a possible structural intersection between contrasting rocks types.
Structural intersections are potential gold-silver targets.

Lincoln would like to conduct offset drilling from the two
holes that encountered ore-grade gold-silver mineralization. However, Lincoln is
also showing the property to multiple juniors who have expressed potential
interest in participating in a joint venture on the Hannah Property. In February
Lincoln concluded a joint venture agreement the Hannah Property with Enexco
International Inc, see above. It is important to note that there is no work
obligation in the property option agreement.

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Owing to this situation, the property may sit idle, provided
that Lincoln continues to make the payments required under the option agreement.

Lincolns plan of exploration for the Hannah Property is as
follows:

Description of Phase of Exploration
      Description of Exploration Work RequiredAcquire Joint Venture Partner
    Execute an Exploration Agreement
      with Option to Joint Venture with a potential joint venture partner (a JV
      Partner)Exploration Trenching
    JV Partner conducts trenching
      across target with an excavatorPhase 2 Drilling
    JV Partner drills 5 to 10 angle RC drill holesData Evaluation
    Evaluate results


The anticipated timetable and estimated budget for completion
for each stage of exploration is as follows:

Stage of Exploration
      Estimated Cost of CompletionAcquire Joint
      Venture Partner
    $0Exploration
      Trenching
    $0
      (Partners Cost)Phase 2 Drilling
    $0
      (Partners Cost)Bottle-Roll
      Metallurgical Tests
    $0
      (Partners Cost)Data Evaluation
    $2,000


All significant work is expected to be conducted by a joint
venture partner using qualified contractors.

Geology

The Hannah Property lies in exotic metamorphic terrain
comprised of Triassic metavolcancis (greenstones) and various Cretaceous
intrusive rocks and Tertiary lake beds (no formation names). A highly oxidized,
northwesttrending, gold-silver-bearing shear zone cuts the metavolcanic rocks
and is exposed in an outcrop approximately 50 to 100 ft wide and 300 ft long at
the edge of the pediment. Pediment and alluvial gravels cover the shear zone to
the northwest and southeast. The altered shear zone consists of hydrothermally
altered breccia that contains conspicuous iron-oxides and bleaching. Two drill
holes cut the zone. Angle hole H-1 (-45o) encountered 35 ft @ 0.016 opt gold
from 40 to 75 ft and angle hole H-2 (-60o) encountered 10 ft @ 0.094 opt gold +
5.1 opt silver from 15 to 25 ft. This mineralization is believed to continue
under gravels to the northwest and southeast. Similar, although much narrower,
shear zones occur on the property and extend up to 1,200 ft in strike
length.

Other Properties

Over the last four years the Company has explored and has joint
ventured a number of properties which it has subsequently returned to their
original owners or dropped.

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ITEM
4A        UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM
5           OPERATING AND
FINANCIAL REVIEW AND PROSPECTS

The following should be read in conjunction with our financial
statements, forming a part of , including note 18 to the annual financial
statements, which provides reconciliations of material measurement differences
between US GAAP and Canadian GAAP, as well as Item 4  Description of Business
of .

Unless otherwise indicated, all dollar figures ($) in this Item
5 are presented in Canadian dollars.

Overview

We are an exploration stage company that has not earned
revenues from our core business to date. We are currently undertaking the plan
of operations described under Item 4  Information on the Company. We will
require additional financing to fund this plan of operations.

Going Concern

Our financial statements are prepared on the basis that we will
continue operations as a going concern. Given that we have no source of
significant revenue, this assumption is subject to the further assumption that
there will continue to be investment interest in equity funding to explore our
mineral projects. We can give no assurance that we will continue to be able to
raise sufficient funds. Should we be unable to continue to do so, we may be
unable to realize on the carrying value of our projects and the net realizable
value could be materially less than our liabilities, with a potential for total
loss to our shareholders.

Critical Accounting Policies

The preparation of financial statements in conformity with
Canadian generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of commitments and contingencies at the date of the
financial statements and the amounts of revenue and expenses reported during the
period. A significant area requiring the use of management estimates involved
the determination of stock based compensation.

We evaluate our estimates on an ongoing basis and base them on
various assumptions that are believed to be reasonable under the circumstances.
Our estimates form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.

Our accounting policies are set out in the notes to the
accompanying financial statements.

Mineral property interests

We charge to operations all exploration and development
expenses incurred prior to the determination of economically recoverable
reserves. These costs would also include periodic fees such as license and
maintenance fees and advance royalty payments.

We capitalize direct mineral property acquisition costs and
those exploration and development expenditures incurred following the
determination that the property has economically recoverable reserves. Mineral
property acquisition costs include cash consideration and the fair value of
common shares and warrants issued for mineral property interests, pursuant to
the terms of the relevant

- 43 -

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agreement. These costs are amortized over the estimated life of
the property following commencement of commercial production, or written off if
the property is sold, allowed to lapse or abandoned, or when impairment in value
has been determined to have occurred. An exploration property is reviewed for
impairment whenever events or changes in circumstances indicate that its
carrying amount may not be recoverable.

Stock-Based Compensation

The fair value of stock options granted is determined using the
Black-Scholes option pricing model and recorded as stock-based compensation over
the vesting period of the stock options.

A.          
Operating Results

Results of Operations

The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our
financial statements included in Item 17 of this Annual Report. Our results of
operations are summarized below.

|Years Ended
      December 31             |   | 2008       |   |   | 2007        |   |   | 2006        |  
|----------------------------------------- | - | ---------- | - | - | ----------- | - | - | ----------- | -
|                                          |   |            |   |   | (Restated - |   |   | (Restated - |  
|                                          |   | (CDN$)     |   |   | CDN$)       |   |   | CDN$)       |  
|Exploration Expenses(Note 6)              | $ | 2,025,586  |   | $ | 343,137     |   | $ | 115,764     |  
|Administrative Expenses                   |   |            |   |   |             |   |   |             |  
|Administrative support                    |   | 55,655     |   |   | 24,070      |   |   | -           |  
|Amortization                              |   | 10,066     |   |   | 4,630       |   |   | 3,277       |  
|Consulting fees                           |   | 63,582     |   |   | 32,086      |   |   | 2,602       |  
|Foreign exchange (gain) loss              |   | (26,477    | ) |   | 4,991       |   |   | 2,318       |  
|Interest expense                          |   | 154,735    |   |   | 12,690      |   |   | 12,132      |  
|Investor relations                        |   | 65,283     |   |   | 162,685     |   |   | 145,899     |  
|Management fees                           |   | 10,488     |   |   | 27,773      |   |   | 71,248      |  
|Office                                    |   | 46,353     |   |   | 34,006      |   |   | 32,786      |  
|Professional fees                         |   | 279,136    |   |   | 204,587     |   |   | 55,510      |  
|Property investigation and due diligence  |   | 4,116      |   |   | 5,528       |   |   | 4,336       |  
|Regulatory and shareholder services       |   | 31,965     |   |   | 30,111      |   |   | 5,750       |  
|Stock-based compensation (Note 9)         |   | -          |   |   | 262,480     |   |   | -           |  
|Travel and entertainment                  |   | 9,284      |   |   | 14,742      |   |   | 20,526      |  
|Loss before other items                   |   | (2,729,772 | ) |   | (1,163,516  | ) |   | (472,148    | )
|Other items                               |   |            |   |   |             |   |   |             |  
|Interest income                           |   | 674        |   |   | 4,526       |   |   | 2,940       |  
|Loss on disposition of equipment          |   | (809       | ) |   | -           |   |   | -           |  
|Gain on settlement of debt (Note 8)       |   | 46,667     |   |   | -           |   |   | -           |  
|Loss before taxes                         |   | (2,683,240 | ) |   | (1,158,990  | ) |   | (469,208    | )
|Loss and Comprehensive Loss for the year  |   | (2,683,240 | ) |   | (1,158,990  | ) |   | (469,208    | )
|Deficit, beginning of year (as restated)  |   | (5,578,953 | ) |   | (4,419,963  | ) |   | (3,950,755  | )
|Deficit, end of
      year                | $ | (8,262,193 | ) | $ | (5,578,953  | ) | $ | (4,419,963  | )
|Basic and diluted loss per common share   | $ | (0.05      | ) | $ | (0.02       | ) | $ | (0.01       | )
|Weighted average
      shares outstanding |   | 54,260,915 |   |   | 47,172,000  |   |   | 42,366,000  |  

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Year Ended December 31, 2008 versus Year Ended December 31,
2007

We had no revenues during the year ended December 31, 2008 or
the year ended December 31, 2007. We have not generated any revenue from our
operations to date.

General and administrative expenses of $704,186 for 2008 were
  approximately $100,000 lower than the 2007 expenses of $820,379. Exploration
  expenditures of $2,025,586 for 2008 were significantly higher than the 2007
  expenditures of $343,137 which reflects the increased exploration and property
  acquisition activities as a result of the acquisition and exploration of both
  the Pine Grove and La Bufa properties. If the 2007 stock-based compensation
  amount of $262,480 was not included in the 2007 general and administrative expenses
  then 2008 expenses were higher by approximately $146,000. The main difference
  between the two years is the amount of interest that has been incurred due to
  the number of loans and note payables that the Company owes.

B.          
Liquidity and Capital Resources

Historically, our operations have been financed by advances
from related parties and proceeds from issuance of common shares and equity. We
anticipate continuing to rely on equity financings to continue our plan of
operations.

Cash and Working Capital

Our cash position at December 31, 2008 was $1,553 compared to
$123,201 as of December 31, 2007. We had a working capital deficit of $2,517,729
at December 31, 2008,compared to a working capital deficit of $71,665 as
of December 31, 2007.

Plan of Operations

We estimate that our total expenditures over the next twelve
months will be approximately $3,200,000 as outlined above under the heading
Plan of Operations. Based on our planned expenditures and our working capital,
we will require a minimum of approximately $3,200,000 to proceed with our plan
of operations over the next twelve months, including the partial pay down of
short term debt. Of the approximately $2.5M that the company shows as debt at
the end of December 2008 about $1.4M will be settled as shares for debt. The
other $1.1M will need to be settled in cash. In addition, we anticipate that we
will require additional financing in order to pursue our exploration programs
beyond the preliminary exploration programs for our mineral properties that are
outlined above.

If we are unable to achieve the necessary additional financing,
then we plan to reduce the amounts that we spend on our exploration activities
and administrative expenses in order to be within the amount of capital
resources that are available to us. Specifically, we anticipate that we would
defer drilling programs pending our obtaining additional financing.

Financings

In December 2008, in consideration for a loan of US$50,000, the
Company issued to the lender 100,000 shares at a value of $2,000.

In August 2008, the Company issued 583,334 shares at a value of
$40,833 to settle a US$87,500 liability owing to a former consultant of the
Company resulting in a gain of $46,667.

In June 2008 the Company issued a promissory note in the amount
of $300,000. In consideration for this loan, the Company issued 450,000 shares
valued at $42,750 to the lender.

- 45 -

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In May 2008, the Company completed a private placement of
200,000 units at a price of $0.15 per unit for proceeds of $30,000. Each unit
consisted of one common share and one-half share purchase warrant, where each
whole warrant entitles the holder to purchase one additional common share at a
price of $0.20 for a period of two years.

In May 2008, the Company completed a private placement of
400,000 units at a price of $0.20 per unit for proceeds of $80,000. Each unit
consisted of one common share and one-half share purchase warrant, where each
whole warrant entitles the holder to purchase one additional common share at a
price of $0.25 for a period of two years. The Company paid finders fees of
$30,563 in relation to these two private placements in May 2008.

On January 21, 2008 we completed a private placement of
2,067,000 units, at a price of $0.20 per unit for total proceeds of $413,400.
Each unit consists of one share and one-half of one share purchase warrant. Each
whole purchase warrant entitles the purchaser to acquire one additional share at
a price of $0.25 per share for a for a two year period from the date of the
issuance of the warrants. The securities issued in the private placement are
subject to a four month hold period under Canadian Securities law expiring May
22, 2008. Finder's fees in cash were paid to a finder in this offering.

In August 2007, we completed a private placement financing for
gross proceeds of $425,000 upon the issue of 4,250,000 units at $0.10 per unit.
We netted $410,000 after costs of $15,000 were deducted. Each unit was comprised
of one share and one share purchase warrant. Each warrant entitles the investor
to purchase one additional share at a price of $0.15 per share for a two year
period from the date of the issuance of the warrants.

In May 2007 the Company completed a private placement and
issued 3,275,000 units at US$0.10 per unit for proceeds of US$327,500. Each unit
consisted of one common share and one share purchase warrant with each warrant
exercisable to acquire one common share at US$0.15 per share for a term of two
years. The Company incurred share issuance costs of US$19,425 in connection with
this private placement.

In April, 2007 the Company issued 210,000 shares of common
stock at a value of US$23,850 pursuant to a mineral option agreement of which
60,000 shares with a value of US$9,600 relate to a mineral property payable
recorded at December 31, 2006.

In February 2007, the Company issued 666,666 shares to settle a
share issuance obligation

During the year ended December 31, 2006, we completed the
offering of 1,075,000 units (each a Unit) at a price of $0.20 per Unit for
total proceeds of $215,000 on July 27, 2006. We completed this offering pursuant
to our Form SB-2 registration statement filed with the Securities and Exchange
Commission pursuant to the United States Securities Act of 1933 (the Act).
Each Unit comprised of one share, one-half of one Series A Warrant and one whole
series B Warrant. Each whole Class A Warrant will be exercisable to acquire one
share (each a Class A Warrant Share and together, the Class A Warrant
Shares) at $0.35 per share and will expire on the date that is one year from
the date of issuance. Each whole Class B Warrant will be exercisable to acquire
one share (each a Class B Warrant Share and together, the Class B Warrant
Shares) at $1.35 per share and will expire on the date that is four years from
the date of issuance. Each of the Class A Warrants and the Class B Warrants are
subject to accelerated exercise provisions. We applied the proceeds from this
financing for general corporate purposes.

Outstanding Payable

Loan payable

- 46 -

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In November 2008, the Company received loan proceeds of
US$50,000 bearing an interest rate of 10% per annum, calculated and compounded
monthly and must be repaid on the earlier of the closing of a financing, or the
closing of the LPT transaction (Note 1), or April 15, 2009. The Company is
currently in default on this loan. The Company pledged certain of the Pine Grove
mineral property claims as collateral. The Company issued 100,000 common shares
pursuant to this agreement as a financing cost, valued at $2,000. These shares
must be equal to post consolidated shares after the LPT transaction so
additional shares will need to be issued.

Convertible loan

On March 3, 2008, the Company borrowed convertible loan
proceeds of $75,000. The Company also entered into a general security agreement
(GSA) whereby the loan is secured by way of general charge over the Companys
assets. The Company agreed to repay the principal and interest upon completing a
financing of more than $500,000.

The principal amount bears interest at 8% per annum, compounded
weekly for the first two weeks, and thereafter at the rate of 24% per annum
compounded weekly, payable following the repayment of the principal. At any time
that the principal and interest shall remain outstanding, the lender has the
right to convert such principal and interest to shares of common stock of the
Company at a rate of $0.20 per share. The Company issued 37,500 share purchase
warrants in relation to this convertible loan, with each warrant entitling the
lender to purchase one common share of the Company at $0.25 per share for a
period of two years. The fair value of the warrants was estimated to be $2,479
and has been treated as a transaction cost.

The fair value of the warrants of $2,479 was estimated using
the Black Scholes option pricing model with the following assumptions: i)
expected volatility of 93.5%; risk free interest rate of 2.6%; iii) expected
weighted average life of 6 months; and iv) no dividend yield. The Company
determined that the equity component of the convertible loan was not
significant.

On December 18, 2008 a director of the Company paid out the
convertible loan indebtedness of $75,000 plus accrued interest of $20,047
totalling $95,047 in return for the assignment of that debt. As part of such
payout the third partys general security agreement over the Companys assets
was discharged. The $95,047 debt is unsecured and accrues interest at a rate of
5% per annum. This amount is included in the convertible loans from related
parties on the balance sheet.

Convertible loans from related parties

During the year ended December 31, 2008, the Company received
convertible loan proceeds of $181,000 from the CEO. The principal amount bears
interest at 5% per annum, and has no specific term of repayment. At any time
that the principal and interest shall remain outstanding, the lender has the
right to convert such principal and interest to shares of common stock of the
Company at a rate equal to the average trading price of the stock over the last
five days prior to conversion. The Company determined that the equity component
of the convertible loan was not significant.

The Company signed an agreement whereby the $181,000 loan would
be settled as $10,000 cash and the issuance of 3,420,000 shares of the Company
contingent on the completion of the transaction with LPT but no later than June
30, 2009, amended to August 31, 2009.

During the year ended December 31, 2008, the Company received
further convertible loan proceeds of $154,047 from a director of the Company of
which $95,047 relates to the assumption of convertible loan indebtedness. The
principal amount of $25,000 bears interest at 5% per annum until December 31,
2008, and at 10% per annum subsequent to December 31, 2008. The remaining
principal amount of $129,047 bears interest at 5% per annum until December 31,
2009, and at 10% per annum subsequent to

- 47 -

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December 31, 2009. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to shares of common stock of the Company at a rate equal to the average
trading price of the stock over the last five days prior to conversion. The
Company determined that the equity component of the convertible loan was not
significant

The Company signed an agreement whereby $59,000 of the loan
would be settled with the issuance of 1,180,000 shares of the Company contingent
on the completion of the transaction with LPT but no later than June 30, 2009,
amended to August 31, 2009.

Notes payable

On January 28, 2004, the Company issued a US$200,000
convertible note. The note carried an interest rate of 10% compounded monthly
and was due on January 28, 2006.

On September 15, 2005 the Company completed an agreement
whereby the Company repaid US$100,000 of the convertible note along with
US$35,000 accrued interest and agreed to repay the remaining US$100,000 within
sixty days. With the completion of the first payment the conversion feature was
cancelled. The note is currently in default and $46,034 of accrued interest is
included in the note payable.

The Company signed an agreement whereby the US$100,000 loan
would be settled for a cash payment of US$50,000 and the issuance of 1,000,000
shares of the Company contingent on the completion of the transaction with LPT
but no later than June 30, 2009.

On June 16, 2008 the Company issued a promissory note in return
for $300,000. The note bears interest at a rate of 10% per year. The principal
and interest are payable at the earliest of June 16, 2009 or when the Company
completes a financing of $1,500,000 or greater. In consideration for this loan
the Company agreed to issue 450,000 shares to the lender. These shares were
issued and were valued at $42,750.

The Company signed an agreement whereby the $300,000 loan would
be settled for the issuance of 6,000,000 shares of the Company contingent on the
completion of the transaction with LPT but no later than June 30, 2009.

On August 20, 2008, the Company issued a promissory note in the
amount of $800,000 in return for drilling services accrued in accounts payable.
The note is due on demand, any time after February 15, 2009, and accrues
interest at 1.5% per month. After demand, the note shall accrue interest at a
rate of 2% per month.

The Company signed an agreement whereby the $800,000 loan would
be settled for the cash payment of $500,000 and the issuance of 6,000,000 shares
of the Company contingent on the completion of the transaction with LPT by
February 28, 2009 but no later than June 30, 2009, amended to August 31, 2009.

Going Concern

We have not attained profitable operations and are dependent
upon obtaining financing to pursue any extensive exploration activities.

Future Financings

We will require additional financing in order to proceed with
the exploration of our mineral properties. We plan to complete private placement
sales of our common shares in order to raise the funds necessary to pursue our
plan of operations and to fund our working capital deficit. Issuances of
additional shares

- 48 -

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will result in dilution to our existing shareholders. We
currently do not have any arrangements in place for the completion of any
private placement financings and there is no assurance that we will be
successful in completing any private placement financings.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

C.          
Research and Development

Not applicable to our business.

D.          
Trend Information

We consider that our ability to raise additional financing in
order to complete our exploration programs and the plan of operations for our
mineral properties during our fiscal year 2008 and beyond will be impacted by a
number of factors, including the price of gold or other minerals, applicable
laws and regulations, political conditions, currency fluctuations, the hiring of
qualified people and obtaining necessary services in jurisdictions where the
Company operates. The current trends relating to these factors could change at
any time and negatively affect the Company's operations and business.

E.          
Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes of financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources, which individually or in
the aggregate is material to our investment.

F.          
Tabular Disclosure of Contractual Obligations

The following table outlines our current contractual
obligations as at December 31, 2008:

Payments due by periodTotal
      Less than 1 year
      1-3 years
      3-5 years
      More than 5 yearsLong-term Debt Obligations
      $1,798,921
      $1,798,921
      $-
      $-
      $-Capital (Finance) Lease Obligations
      $-
      $-
      $-
      $-
      $-Operating Lease Obligations
      $-
      $-
      $-
      $-
      $-Purchase Obligations
      $-
      $-
      $-
      $-
      $-Other Long-term Liabilities
      $-
      $-
      $-
      $-
      $-Total
      $-
      $-
      $-
      $-
      $-


G.          
Safe Harbor

This document may contain forward-looking statements. We desire
to take advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the express
purpose of availing ourselves of the protections of the safe harbor with respect
to all forward-looking statements. Several important factors, in addition to the
specific factors discussed in connection

- 49 -

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with such forward-looking statements individually, could affect
our future results and could cause those results to differ materially from those
expressed in the forward-looking statements contained herein.

We estimated or anticipated future results or other
non-historical facts are forward-looking and reflect our current perspective of
existing trends and information. These statements involve risks and
uncertainties that cannot be predicted or quantified, and consequently actual
results may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, among others,
the success of our exploration and development activities, environmental and
other regulatory requirements, foreign exchange issues, mineral deposit
estimates and mineral prices, competition by other mining companies, financing
risks, mineral title issues, insider conflicts of interest, political stability
issues, and other risks and uncertainties detailed in this report and from time
to time in our other Securities and Exchange Commission filings.

Therefore, we wish to caution each reader of this document to
consider carefully these factors as well as the specific factors that may be
discussed with each forward-looking statement in this document or disclosed in
our filings with the SEC as such factors, in some cases, could affect our
ability to implement our business strategy and may cause actual results to
differ materially from those contemplated by the statements expressed therein.
Forward-looking statements are subject to a variety of risks and uncertainties
in addition to the risks referred to in "Risk Factors" under Item 3.D above.

ITEM
6           DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES

A.          
Directors and Senior Management

The following table sets forth information relating to our
directors and senior management as at the date of :

|Name                      | Position                                                                                  | Age | Position Held Since
|------------------------- | ----------------------------------------------------------------------------------------- | --- | -------------------
|                          |                                                                                           |     |                    
|Andrew F. B. Milligan (1) | Director and Chairman of the Board                                                        | 85  | April 12, 2004     
|                          |                                                                                           |     |                    
|Paul F. Saxton            | President, Chief Executive Officer, Chief Operating
      Officer, Treasurer and Director | 63  | April 12, 2004     
|                          |                                                                                           |     |                    
|James Chapman             | Director                                                                                  | 54  | April 12, 2004     
|                          |                                                                                           |     |                    
|Marc LeBlanc (1)          | Director                                                                                  | 46  | Feb 28, 2008       
|                          |                                                                                           |     |                    
|Nathalie Pilon            | Chief Financial Officer                                                                   | 40  | March 20, 2008     
|                          |                                                                                           |     |                    
|Jeffrey L. Wilson         | Vice-President - Exploration                                                              | 60  | May 12, 2005       
|                          |                                                                                           |     |                    
|Mary Martin               | Corporate Secretary                                                                       | 52  | Feb 1, 2008        

Notes:

(1) Member of Audit Committee and Compensation Committee.

The following is biographical information on each of the
persons listed above:

Paul F. Saxton, President, Chief Executive Officer, Chief
Operating Officer, Treasurer and Director

Mr. Saxton was appointed as a director of the Company on March
26, 2004. Our board of directors also appointed Mr. Saxton as our chief
executive officer as of March 26, 2004. Paul Saxton is a mining engineer who
also holds an MBA from the University of Western Ontario. He has been active in
the mining industry since 1969, holding various positions including mining
engineer, mine superintendent,

- 50 -

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President and CEO of numerous Canadian mining companies.
Following 10 years with Cominco, Paul became Vice President and President of
Mascot Gold Mines Ltd., initially working on the design and construction of the
Nickel Plate mine in BC. Subsequently Paul became a Vice-President of Corona
Corporation where he was responsible for western operations and exploration for
the company and was instrumental in the re-opening of the Nickel Plate. In 1989,
Paul was appointed Senior Vice President of Viceroy Resource Corporation where
he was responsible for obtaining financing and the construction and operations
of the Castle Mountain mine in California. As President of Loki Gold Corporation
and Baja Gold Inc, Paul was responsible for bringing the Brewery Creek Gold mine
into production. Following his departure from Viceroy in 1998, Paul became
President of Standard Mining Corp., organizing the company and supervising its
exploration activities until 2001, when Standard Mining Corp. was merged with
Doublestar Resources Ltd.

Andrew F. B. Milligan, Chairman and Director

Mr. Andrew Milligan was appointed as one of our directors on
March 26, 2004. Our board of directors also appointed Mr. Milligan as our
chairman as of March 26, 2004. Mr. Milligan is a business executive who has
concentrated on mining ventures over the past 25 years. From 1984 to 1986 he was
President and Chief Executive Officer of Glamis Gold Ltd. In November 1986 he
was appointed President and Chief Executive Officer of Cornucopia Resources Ltd.
In 1998 and 1999 Cornucopia disposed of its gold mining interests and
subsequently merged with three other companies to form Quest Investment
Corporation. Mr. Milligan was a director of Quest until June, 2003. He is
currently a director of several mining companies trading on both the American
Stock Exchange and the TSX Venture Exchange.

James Chapman, Director

Mr. Chapman was appointed as one of our directors on April 12,
2004. Mr. Chapman graduated from the University of British Columbia in 1976 with
a B.Sc. Geology degree and has focused on mineral exploration primarily for
junior mining companies and consulting groups. This experience has incorporated
all aspects of the industry from property evaluation, project generation through
implementation and report preparation for owners, clients and regulatory
authorities. Since 1982 he has operated as an independent consulting geologist
on projects including precious and base metals, uranium, diamonds and phosphate,
from reconnaissance level projects to deposit definition drill programs. He is a
Qualified Person under Canadian regulations, as defined by National Instrument
Policy 43.101.

Marc LeBlanc, Director

Mr. Marc LeBlanc was appointed as a director on March 26, 2008.
Mr. LeBlanc has been the VP Corporate Development Mercator Minerals Ltd. since
May 2007 and their Corporate Secretary since January 2005. Mr. LeBlanc is
currently a member in good standing with the Canadian Society of Corporate
Secretaries and the British Columbia Paralegal Association and a member of the
Prospectors and Developers Association of Canada. Mr. LeBlanc holds a Bachelor
of Arts Degree from Simon Fraser University and an Associates Degree in Legal
Studies from Capilano College. Prior to joining the Corporation, Mr. LeBlanc
provided consulting services to a number of public mining companies in the areas
of corporate finance and regulatory affairs in the review and preparation of
offering materials and continuous disclosure filings pursuant to Canadian and US
securities legislation and regulation. From 2000 to May 2004, Mr. LeBlanc was
employed with a number of Vancouver law firms and was responsible for the
preparation and review of all continuous disclosure documents for publicly
traded companies listed in North America and Europe and ensuring the maintenance
of these companies of the requirements of Canadian and US securities legislation
and regulations. Mr. LeBlanc was formerly the Assistant Corporate Secretary of
Miramar Mining Corporation and Northern Orion Explorations Ltd. responsible for
all corporate and securities filings, disclosure requirements and exchange
maintenance with the Toronto Stock Exchange and the NASDAQ Stock Market. Mr.
LeBlanc is and has been a director or officer of a number of public mining and
industrial companies.

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Nathalie Pilon, Chief Financial Officer

Ms. Pilon is a graduate of the Universite de Sherbrooke and is
also a Certified Management Accountant. Ms. Pilon is a financial reporting
consultant for a number of listed companies on both Canadian and US exchanges.
She focuses on complementing the existing financial teams of various companies
by providing expertise in various accounting and financial areas.

Jeffrey L. Wilson, Vice-President - Exploration

Mr. Wilson has been appointed as our Vice President -
Exploration on May 25, 2004. Mr. Wilson has twenty-seven years of professional
exploration experience in the United States, Mexico and Central America with
emphasis on gold. He served as Director of Exploration for Echo Bay Exploration
Inc. for eleven years, first in western U.S. and later in Mexico and Central
America. He earlier served as Exploration Manager, Western U.S., with Tenneco
Minerals Company, with most projects in Nevada. Mr. Wilson earned his MSc. in
Geology from the University of Southern California.

Mary Martin, Corporate Secretary

Ms. Martin

Ms. Martin is an Office Administrator who has over 25 years of
  experience. From 2004 to 2006, she was a Contract Administrator for MacDonald
  Dettwiler in Richmond, BC. From 2006 to 2007, she was at Mundoro Mining Inc.
  and was appointed Corporate Secretary. She is currently Office Manager and Corporate
  Secretary of Lincoln Gold Corporation.

Certain of Lincoln's directors and officers are part-time and
serve as officers and/or directors of other resource exploration companies and,
as such, are engaged in, and will continue to be engaged in, the search for
additional resource opportunities on behalf of such other companies. In
particular, the success of Lincoln and its ability to continue to carry on
operations is dependent upon its ability to retain the services of certain
directors and officers of the Company.

B.          
Compensation

Executive Compensation

The Corporation has three (3) executive officers. During the
Corporations financial year ended December 31, 2008 the aggregate direct
remuneration paid or payable to the Corporations executive officers by the
Corporation and its subsidiaries, all of whose financial statements are
consolidated with those of the Corporation, was $70,067.

Named Executive Officer means each Chief Executive Officer,
each Chief Financial Officer and each of the three most highly compensated
executive officers, other than each Chief Executive Officer and Chief Financial
Officer, who were serving as executive officers at the end of the most recently
completed fiscal year and whose total salary and bonus exceeds $150,000. Mr.
Paul Saxton acted as our Chief Executive Officer and Chief Financial Officer
during the financial year ended December 31, 2007. None of our executive
officers received total compensation exceeding $150,000 during 2008.
Accordingly, Mr. Saxton and Ms. Pilon are our only Named Executive Officers. The
compensation paid to the Named Executive Officers during the Corporations three
most recently completed financial years of December 31 is as set out below:

The following table summarizes the compensation paid by us to
our executive officers during our last three fiscal years ended December 31,
2008:

- 52 -

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Summary Compensation Table

NAMED EXECUTIVE OFFICERS Name and
        Principal Position
      Year
      Annual
        Compensation
      Long
        Term Compensation
      All Other Compen- sation
        ($)Awards
      PayoutsSalary ($)
      Bonus ($)
      Other Annual Compen -sation
        ($)
      Securities Under Options/SA RsGranted
        (#)
      Shares
        or Units Subject to Resale Restrictions ($)
      LTIP Payouts ($)Paul F. Saxton 
        President, Chief 
        Executive Officer, and 
        Chief Operating Officer
      2008 
        2007 
        2006
      $10,488 
        $24,174 
        $20,545
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        600,000 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        NilNathalie Pilon. Chief 
        Financial Officer
      2008
      Nil
      Nil
      $18,638
      Nil
      Nil
      Nil
      Nil


Notes:

(1) Nathalie Pilon was appointed as Chief Financial Officer of
the Corporation on March 26, 2008.

Long-Term Incentive Plan Awards

Long term incentive plan awards (LTIP) means a plan
providing compensation intended to motivate performance over a period greater
than one financial year. LTIPs do not include option or stock appreciation
rights plans or plans for compensation through shares or units that are subject
to restrictions on resale. The Corporation did not award any LTIPs to any Named
Executive Officer during the most recently completed financial year.

Options

The share options granted to the Named Executive Officers
during the financial year ended December 31, 2008 were as follows:

Option Grants During the Most Recently Completed Financial
  Year

NAMED
      EXECUTIVE OFFICERS
    Securities
      Under Options/ Granted (#)
    % of Total
      Options Granted to Employees in
      Financial Year
    Exercise
      or Base Price ($/Security)
    Market Value of
      Securities Underlying Options on the Date
      of Grant ($/Security)
    Expiration Date


No options were exercised by the Named Executive Officers
during the financial year ended December 31, 2008. The values of outstanding
options at December 31, 2007 were as follows:

- 53 -

---

Aggregate Option Exercises During the Most Recently Completed
Financial Year and Financial Year-End Option Values

NAMED EXECUTIVE
      OFFICERS Name
      Securities Acquired
      on Exercise (#)
      Aggregate Value
      Realized ($)
      Unexercised Options/SARs at
      FY- End (#) Exercisable/
      Unexercisable
      Value of Unexercised in-the-Money
      Options/SARs at FY- End ($)
      Exercisable/ UnexercisablePaul F. Saxton President, Chief Executive Officer,
      and Chief Operating Officer
    Nil
    Not Applicable
    600,000/Nil
    $Nil/$N/ANathalie Pilon, Chief Financial Officer
    Nil
    Not Applicable
    Nil
    $Nil/$N/A


No share options were repriced on behalf of the Named Executive
Officers during the financial year ended December 31, 2008.

Termination of Employment, Change in Responsibilities and
Employment Contracts

There is no written employment contract between the Corporation
and any Named Executive Officer.

There are no compensatory plan(s) or arrangement(s), with
respect to any Named Executive Officer resulting from the resignation,
retirement or any other termination of employment of the officers employment or
from a change of any Named Executive Officers responsibilities following a
change in control.

Compensation of Directors

There are no arrangements under which directors were
compensated by the Corporation and its subsidiaries during the most recently
completed financial year for their services in their capacity as directors or
consultants.

No directors received options under the share option plan in
their capacity as a director during the financial year ended December 31,
2008:

Securities Authorized For Issuance Under Equity Compensation
Plans

The Corporation has in place a share option plan initially
adopted in 2005 (the Plan). The Plan was amended on September 25, 2007
adjusting the maximum number of Common Shares available to be granted from
2,000,000 Common Shares to 2,500,000 Common Shares. The Plan has been
established to provide incentive to qualified parties to increase their
proprietary interest in the Corporation and thereby encourage their continuing
association with the Corporation. The Plan is administered by the directors of
the Corporation. The Plan provides that options will be issued pursuant to
option agreements to directors, officers, employees or consultants of the
Corporation or a subsidiary of the Corporation. All options expire on a date not
later than 10 years after the issuance of such option. There are currently
options outstanding to purchase an aggregate of 2,450,000 Common Shares.

The following table sets out equity compensation plan
information as at the end of the financial year ended December 31, 2008.

- 54 -

---

Equity Compensation Plan Information

Number of securities to
      be issued upon exercise of outstanding options,
      warrants and rights
      Weighted-average
      exercise price of outstanding options,
      warrants and rights
      Number of securities remaining available
      for future issuance under equity compensation
      plans (excluding securities reflected in
      column (a))Plan
      Category
    (a)
    (b)
    (c)Equity compensation plans approved by securityholders -
    Nil
    N/A
    NilEquity compensation plans not approved by
      securityholders (the Plan)
    2,450,000
    $0.25
    50,000Total
      2,450,000
      $0.25
      50,000


Indebtedness Of Directors And Executive Officers

No directors, proposed nominees for election as directors,
executive officers or their respective associates or affiliates, or other
management of the Corporation were indebted to the Corporation as of the end of
the most recently completed financial year or as at the date hereof.

Long-Term Incentive Plan Awards

Long term incentive plan awards (LTIP) means a plan
providing compensation intended to motivate performance over a period greater
than one financial year. LTIPs do not include option or stock appreciation
rights plans or plans for compensation through shares or units that are subject
to restrictions on resale. The Corporation did not award any LTIPs to any Named
Executive Officer during the most recently completed financial year.

Pension, Retirement or Similar Benefits

We do not have any amounts set aside or accrued to provide for
pension, retirement or similar benefits.

C.          
Board Practices

All of our directors are elected annually by the shareholders
and hold office until the next annual meeting of shareholders or until their
successors are duly elected and qualified, unless they sooner resign or cease to
be directors in accordance with our By-Laws. Our last annual meeting was held on
June 26, 2008. Our officers are appointed by the Board of Directors.

Directors Service Contracts

None of the service contracts of any of Lincoln's directors
contain provisions for benefits upon termination of such director's service.

Committees of the Board of Directors

The Board has appointed an Audit Committee and a Compensation
Committee to date.

- 55 -

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Audit Committee

The Board has a charter for the Audit Committee to follow in
carrying out its audit and financial review functions. The Audit Committee
reviews all financial statements of the Corporation prior to their publication,
reviews audits, considers the adequacy of audit procedures, recommends the
appointment of independent auditors, reviews and approves the professional
services to be rendered by them and reviews fees for audit services. The charter
has set criteria for membership which all members of the Audit Committee are
required to meet consistent with Multilateral Instrument MI 52-110 and other
applicable regulatory requirements. The Audit Committee, as needed, meets
separately (without management present) with the Corporations auditors to
discuss the various aspects of the Corporations financial statements and the
independent audit.

Composition of the Audit Committee

The following are the members of the Committee:

|Marc LeBlanc    | Independent(1)              | Financially
      literate(1)
|--------------- | --------------------------- | -----------------------------
|                |                             |                              
|Andrew Milligan | Not
      Independent(1)(2) | Financially
      literate(1)
|                |                             |                              
|James Chapman   | Independent(1)              | Financially
      literate(1)

|(1) | As defined by Multilateral Instrument 52-110 (MI
      52-110).                                    
|--- | -----------------------------------------------------------------------------------------------------
|(2) | Andrew Milligan is not considered independent under MI
      52-110 as he is the Chairman of Lincoln.

Compensation Committee

The Board has adopted a charter for the Compensation Committee.
The members of the compensation committee are Andrew F.B. Milligan, and Marc
LeBlanc. A majority of the members of the compensation committee are independent
members of the board of directors of the Corporation.

The function of the Compensation Committee is to review, on an
annual basis, the compensation paid to the Corporations executive officers and
to the Directors, to review the performance and compensation paid to the
Corporations executive officers and to make recommendations on compensation to
the Board. In addition, the Committee will review annually the compensation
plans for the Corporations non-executive staff.

Other Board Committees

The Board has no other committees other than the audit
committee and the compensation committee.

D.          
Employees

At the date of filing we had no full-time employees and no
part-time employees. We have no labor unions at this time.

- 56 -

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E.          
Share Ownership

Shares

The shareholdings of our officers and directors are set forth
below as at June 19, 2009.

Name of Nominee; Current Position with the
      Corporation and Province and Country of Residence
      Number of Common Shares
      Percentage of Outstanding
      Common Shares Owned(1)(2)Paul F. Saxton President, Chief Executive
      Officer, Chief Operating Officer, Treasurer and Director British
      Columbia, Canada
    4,500,000
    8.1%Andrew F. B. Milligan Chairman and
      Director British Columbia, Canada
    2,223,000
    4%James Chapman Director British
      Columbia, Canada
    700,000
    1.3%Marc LeBlanc(7)Director
      British Columbia, Canada
    nil
    0%Nathalie Pilon(8)Chief
      Financial Officer British Columbia, Canada
    nil
    0%Jeffrey Wilson VP-Exploration Nevada,
      USA
    750,000
    1.3%Mary Martin Corporate Secretary
      British Columbia, Canada
    3,000
    -%


Notes

|1. | The information as to Common Shares beneficially owned or
      controlled is not within the knowledge of the management of the
      Corporation and has been furnished by the respective nominees.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                     
|2. | Based on 55,592,000 common shares issued and outstanding
      as of June 19, 2009.                                                                                                                 

Options

Details of the stock options held by our officers and directors
are set forth below as at December 31, 2008.

Name and Position
    Grant Date
    Expiry Date
    Exercise Price
    TotalPaul F. Saxton President, Chief Executive
      Officer, Chief Operating Officer, Treasurer and Director
      British Columbia, Canada
    September 25, 2007
    September 25, 2010
    $0.25
    600,000


- 57 -

---

Name and Position
      Grant Date
      Expiry Date
      Exercise Price
      TotalAndrew F. B. Milligan Chairman and Director
      British Columbia, Canada
    September 25, 2007
    September 25, 2010
    $0.25
    300,000James Chapman Director British Columbia, Canada
    September 25, 2007
    September 25, 2010
    $0.25
    300,000Jeffrey Wilson VP-Exploration Nevada, USA
    September 25, 2007
    September 25, 2010
    $0.25
    500,000Mary Martin Corporate Secretary British
      Columbia, Canada
    September 25, 2007
    September 25, 2010
    $0.25
    50,000Total:
    
    
    
    1,750,000


Each option may be exercised to purchase one of our common
shares at the exercise price.

Warrants

Details of the share purchase warrants held by our officers and
directors are set forth below as at December 31, 2008.

Name and Position
      Grant Date
      Expiry Date
      Exercise Price
      TotalAndrew Milligan Chairman and Director
    May 14, 2007
    May 14, 2009 Expired
    $0.15
    450,000Total:
    
    
    
    450,000


Each warrant may be exercised to purchase one of our common
shares at the exercise price.

Stock Option Plan

On May 28, 2008, our board of directors adopted a new 10%
rolling stock option plan (the Option Plan) to replace our 2005 stock option
plan, as amended. The New Stock Option Plan was ratified and approved by the
shareholders at Lincolns annual general meeting held on June 26, 2008.

Under the Option Plan, a maximum of 10% of the issued and
outstanding common shares of the Corporation at the time an option is granted,
less Common Shares reserved for issuance under share compensation arrangements
of the Corporation other than the Option Plan, will be reserved for options to
be granted at the discretion of the Corporations board of directors to eligible
optionees (the Optionees). This type of Option Plan is called a rolling
plan. During the Corporation's financial year ended December 31, 2007, and to
the date of the mailing of this Information Circular, options to purchase an
aggregate of 2,450,000 Common Shares have been granted by the Corporation,
representing approximately 3.2% of Common Shares outstanding. The Option Plan
will be subject to restrictions that provide that insiders may not be, as a
group, issued in excess of 10% of the issued Common Shares within any 12 month
period. The number of common shares issuable to insiders as a group under the
option plan, when combined with common shares issuable to insiders under all of
the Corporations other security based compensation plans, may not exceed 10% of
the Corporations issued common shares and no exercise price of an option
granted to an insider may be reduced nor an extension to the term of an option
granted to an insider extended without further shareholders approval.

- 58 -

---

The material terms of the Option Plan include the following
provisions:

- the participants in the Option Plan are the directors, executive officers,
  employees and other service providers of the Corporation;
- the Option Plan is administered by the directors of the Corporation;
- the exercise price of stock options granted under the Option Plan, as
  determined by the Board in its sole discretion, shall not be less than the
  "market price" of the shares (as defined by the policies of the TSX Venture)
  or, if the shares are not listed for trading on the TSX Venture, then such
  other exchange or quotation system on which the shares are listed or quoted
  for trading;
- all options granted under the Option Plan expire on a date not later than 5
  years after the issuance of such options by the Board;
- upon expiry of an option, or in the event an option is otherwise terminated
  for any reason, without having been exercised in full, the number of shares in
  respect of the expired or terminated option shall again be available for the
  purposes of the Option Plan;
- if the option holder ceases to be a director of Corporation or its
  subsidiaries or ceases to be employed by the Corporation or its subsidiaries
  (other than by reason of death or cause), as the case may be, then the option
  granted shall expire no later than the (i) the original expiry date of the
  option, or (ii) the 90th day following the date that the option holder ceases
  to be a director or ceases to be employed by the Corporation or its
  subsidiaries, subject to the terms and conditions set out in the Option Plan,
  and in the event of dismissal of the option holder from employment or service
  for cause, all options held by the option holder, whether or not vested at the
  date of dismissal, will immediately terminate without any right of the option
  holder to exercise any of the options;
- In the case of the death of an option holder, any vested option held by him
  at the date of death will become exercisable by the optionees lawful personal
  representatives, heirs or executors until the earlier of one year after the
  date of death of the optionholder and the date of expiration of the term
  otherwise applicable to such option.
- options granted pursuant to the Option Plan will be non-assignable and may
  be subject to vesting provisions determined by the Board;
- the Corporation does not offer financial assistance in respect of the
  exercise of options.

As part of the merger with LPT, as discussed on page 19, all
outstanding stock options will be cancelled and the Companys stock option plan
will be cancelled. The stock option plan of LPT will continue.

- 59 -

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ITEM
7           MAJOR SHAREHOLDER
AND RELATED PARTY TRANSACTIONS

A.          
Major Shareholders Major Shareholders

We are a publicly-held corporation, with our shares held by
residents of the United States, Canada and other countries. To the best of our
knowledge, no person, corporation or other entity beneficially owns, directly or
indirectly, or controls more than 5% of our common shares, except as follows:

Title of Class
      Name and residential
      jurisdiction of Beneficial Owner
      Number of Common Shares
      Percentage of Common
      Shares(1)Common
    Paul F. Saxton(2)British Columbia, Canada
    5,100,000(2)
    9%Common
    Michael
      Baybak(3), California, U.S.A.
    3,166,666(3)
    6%


|(1) | Based on 55,392,000 of our common shares issued and
      outstanding as of June 1, 2009. Based on beneficial share ownership data
      as of December 31, 2008. For these purposes, beneficial ownership means
      the sole or shared power to vote or direct the voting or to dispose or
      direct the disposition of any security. Unless otherwise indicated, each
      shareholder listed has sole voting or dispositive power with respect to
      such common shares. Each of our common shares entitles the holder thereof
      to one vote.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(2) | Consists of 4,500,000 shares held by Mr. Saxton and
      600,000 shares that can be acquired by Mr. Saxton upon exercise of options
      to purchase shares held by Mr. Saxton within 60 days of the date hereof.
      Mr. Saxton is a director and an officer of the Company.                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(3) | Windsor Capital Corporation owns directly 2,500,000
      shares in the capital of the Company. Michael Baybak beneficially owns a
      100% interest in Windsor Capital Corporation.                                                                                                                                                                                                                                                                                                                                                                         

Geographic Breakdown of Shareholders

Approximately 42% of our outstanding common shares are held by residents in the United States.  There were approximately 30 shareholders of record resident in the United States as of December 31, 2008.

- 60 -

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Transfer Agent

Our securities are recorded in registered form on the books of
our transfer agent, ComputerShare, located at Suite 200  510 Burrard Street,
Vancouver, British Columbia, V6C 3B9. However, the majority of such shares are
registered in the name of intermediaries such as brokerage houses and clearing
houses (on behalf of their respective brokerage clients). We do not have
knowledge or access to the identities of the beneficial owners of such shares
registered through intermediaries.

Control

To the best of our knowledge, we are not directly or indirectly
owned or controlled by any other corporation, by any foreign government or by
any other natural or legal person, severally or jointly.

Insider Reports under the British Columbia Securities Act

Under the British Columbia Securities Act, insiders
(generally officers, directors and holders of 10% or more of our shares) were
required to file insider reports of changes in their ownership in the first ten
days of the month following a trade in our securities. Copies of such reports
are available for public inspection at the offices of the British Columbia
Securities Commission, 9th Floor, 701 West Georgia Street, Vancouver,
British Columbia, V7Y 1L2 (telephone (604) 899-6500) or at the British Columbia
Securities Commission website (www.bcsc.bc.ca). Since 2002, in British Columbia all
insider reports must be filed electronically ten days following the date of the
trade at www.sedi.ca. The public is able to
access these reports at www.sedi.ca.

B.          
Related Party Transactions

No director or senior officer, and no associate or affiliate of
the foregoing persons, and no insider has or has had any material interest,
direct or indirect, in any transactions, or in any proposed transaction, which
in either such case has materially affected or will materially affect us or our
predecessors during each of the year ended December 31, 2008 except as follows:

- During the year ended December 31, 2008, the Company paid management fees
  and consulting fees of $40,941 (2007  $14,827, 2006  $47,937) and rent,
  included in office, of $2,583 (2007 - $2,901, 2006 - $3,744) to the Vice
  President of the Company, management fees of $10,488 (2007 - $24,174, 2006 -
  $23,310) to company owned by the President of the Company and consulting fees
  of $18,638 (2007 - $nil) to a company owned by the CFO of the Company. In
  December 2008, the President forgave $39,853 of management fees which is
  reversed against management fees.
- As at December 31, 2008, the Company owed $53,217 (2007 - $1,155) to
  various directors and officers of the Company which is included in accounts
  payable. In October 2008, amended subsequent to year-end, the Company signed
  an agreement whereby $32,020 of the amounts due to directors and officers
  would be settled through a cash payment of $7,520 and the issuance of 490,000
  shares of the Company (see Note 17). At December 31, 2008, the Company owed
  $43,281 (2007 - $nil) for rent and administrative expenses to a Company which
  shares a director in common

These transactions are in the normal course of operations and
are measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties.

C.          
Interests of Experts and Counsel

Not applicable.

- 61 -

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ITEM
8           FINANCIAL
INFORMATION

A.          
Consolidated Statements and Other Financial Information

Financial Statements

The financial statements required as part of this Annual Report
are filed under Item 17 of this Annual Report.

Legal Proceedings

We are not a party to any legal or arbitration proceedings nor,
to our knowledge, are any such proceedings contemplated.

Dividends

We have not paid any dividends on our common shares since
incorporation. Our management anticipates that we will retain all future
earnings and other cash resources for the future operation and development of
our business. We do not intend to declare or pay any cash dividends in the
foreseeable future. Payment of any future dividends will be at our board of
directors discretion after taking into account many factors including our
operating results, financial condition and current and anticipated cash needs.

B.          
Significant Changes

We have not experienced any significant changes since the date
of the financial statements included herein except as disclosed in Annual
Report.

- 62 -

---

ITEM
9           THE OFFER AND
LISTING

A.          
Offer and Listing Details

This Form 20-F is filed as an annual report under the Exchange
Act and does not relate to a new offer of securities and accordingly the
information called for is not required, other than the price history information
below.

The common shares have been quoted on the Over The Counter
Bulletin Board (OTCBB) in the United States of America since the start of the
Company. Over the counter quotations reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not necessarily represent actual
transactions. Our common shares are quoted under the symbol LGCPF.

B.          
Plan of Distribution

This Form 20-F is filed as an annual report under the Exchange
Act and does not relate to a new offer of securities and accordingly, the
information called for is not required.

C.          
Markets

Our common shares are traded in United States on the OTCBB.

D.          
Selling Shareholders

This Form 20-F is filed as an annual report under the Exchange
Act and accordingly the information called for in Item 9.D is not required.

E.          
Dilution

This Form 20-F is filed as an annual report under the Exchange
Act and accordingly the information called for in Item 9.E is not required.

F.          
Expenses of the Issue

This Form 20-F is filed as an annual report under the Exchange
Act and accordingly the information called for in Item 9.F is not required.

- 63 -

---

ITEM
10           ADDITIONAL
INFORMATION

A.          
Share Capital

This Form 20-F is filed as an annual report under the Exchange
Act and accordingly the information called for in Item 10.A is not required.

B.          
Memorandum and Articles of Incorporation

We incorporated on February 17, 1999 as Braden Technologies, Inc. under the laws of the State of Nevada, USA.  We changed our name to “Lincoln Gold Corporation” following the completion of our acquisition of and merger with Lincoln Gold Corp., a Nevada corporation, on March 26, 2004 under Chapter 92A of the Nevadas Revised Statutes.  On November 20, 2007, we changed our jurisdiction of incorporation from Nevada to the Canadian federal jurisdiction under the Canada Business Corporation Act. On February 28, 2009, we changed our jurisdiction of incorporation from the Canadian federal jurisdiction to the Province of British Columbia under the *Business Corporations Act* (British Columbia) (the “BCBCA”).  Our corporate constituting documents are comprised of our Notice of Articles ("Notice of Articles") and our Articles (“Articles”). A copy of the Notice of Articles and Articles are filed with this Annual Report on Form 20-F as exhibits (See Item 19).

The following is a summary of certain material provisions of (i) our Notice of Articles, (ii) our Articles and (iii) certain provisions of the BCBCA applicable to us:

1.          
Objects and Purposes

Our Articles and Notice of Articles do not specify objects or purposes.  We are entitled under the *Business Corporations Act* (British Columbia) to carry on all lawful businesses which can be carried on by a natural person.

2.          
Directors

Director’s power to vote on a proposal, arrangement or contract in which the director is interested.

According to the *Business Corporations Act* (British Columbia), a director holds a disclosable interest in a contract or transaction

|1. | the contract or transaction is material to the company;                             
|-- | ------------------------------------------------------------------------------------
|   |                                                                                     
|2. | the company has entered, or proposes to enter, into the contract or transaction; and
|   |                                                                                     
|3. | either of the following applies to the director:                                    

| |    |                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | the director has a material interest in the contract or transaction;                                                                                
| |    |                                                                                                                                                     
| | b. | the director is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.

However, the *Business Corporations Act* (British Columbia) also provides that a director does not hold a disclosable interest in a contract or transaction if:

|1. | the situation that would otherwise constitute a disclosable interest arose before the coming into force of the *Business Corporations Act* (British Columbia) or, if the company was recognized under the *Business Corporations Act* (British Columbia), before that recognition, and was disclosed and approved under, or was not required to be disclosed under, the legislation that:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                          

| | a. | applied to the company on or after the date on which the situation arose; and                             
| | -- | ----------------------------------------------------------------------------------------------------------
| |    |                                                                                                           
| | b. | is comparable in scope and intent to the provisions of the *Business Corporations Act* (British Columbia);
| |    |                                                                                                           

|2. | both the company and the other party to the contract or transaction are wholly owned subsidiaries of the same corporation;                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                    
|3. | the company is a wholly owned subsidiary of the other party to the contract or transaction;                                                        
|   |                                                                                                                                                    
|4. | the other party to the contract or transaction is a wholly owned subsidiary of the company; or                                                     
|   |                                                                                                                                                    
|5. | where the director or senior officer is the sole shareholder of the company or of a 	corporation of which the company is a wholly owned subsidiary.

The *Business Corporations Act* (British Columbia) further provides that a director of a company does not hold a disclosable interest in a contract or transaction merely because:

|1. | the contract or transaction is an arrangement by way of security granted by the company for money loaned to, or obligations undertaken by, the director or senior officer, or a 	person in whom the director or senior officer has a material interest, for the benefit of the company or an affiliate of the company;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                       
|2. | the contract or transaction relates to an indemnity or insurance;                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                       
|3. | the contract or transaction relates to theremuneration of the director or senior officer in that person’s capacity as director, officer, employee or agent of the company or of an affiliate of the company;                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                       
|4. | the contract or transaction relates to a loan to the company, and the director or senior officer, or a person in whom the director or senior officer has a material interest, is or is to be a guarantor of some or all of the loan; or                                                                               
|   |                                                                                                                                                                                                                                                                                                                       
|5. | the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the company and the director or senior officer is also a director or senior officer of that corporation or an affiliate of that corporation.                                                    

Under our Articles, a director or senior officer who holds a disclosable interest (as that term is under the *Business Corporations Act* (British Columbia)) in a contract or transaction into which we have entered or propose to enter:

|1. | is liable to account to us for any profit that accrues to the director or senior officer under, or as a result of, the contract or transaction only if and to the extent provided in the *Business Corporations Act* (British Columbia);                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                              
|2. | is  not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution;
|   |                                                                                                                                                                                                                                                              
|3. | if present at the meeting of directors at which the contract or transaction is considered for approval, may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.            

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the *Business Corporations Act* (British Columbia).  No director or intended director is disqualified by his or her office from contracting with us either with regard to the holding of any office or place of profit the director holds with us or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of us in which a director is in any way interested is invalid merely because:

|(1) | a director or senior officer of the company has an interest, direct or indirect, in the contract or transaction;                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                 
|(2) | a director or senior officer of the company has not disclosed an interest he or she has in the contract or transaction; or                                      
|    |                                                                                                                                                                 
|(3) | the directors or shareholders of the company have not approved the contract or transaction in which a director or senior officer of the company has an interest.

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Directors' power, in the absence of an independent
quorum, to vote compensation to themselves or any members of their
body.

A director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for us, except as our auditor, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.  The *Business Corporations Act* (British Columbia) provides that a director of a company does not hold a disclosable interest in a contract or transaction merely because the contract or transaction relates to the remuneration of the director or senior officer in that person’s capacity as director, officer, employee or agent of ours or of an affiliate of ours.

Borrowing powers exercisable by the directors.

Under the Articles, the directors may, on our behalf:

|1. | borrow money in such manner and amount, on such security, from such sources and upon such terms, and conditions as they consider appropriate;                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                         
|2. | issue bonds, debentures, and other debt obligations either outright or as a security for any liability or obligation of ours or any other person and at such discounts or premiums and on such other terms as they consider appropriate;
|   |                                                                                                                                                                                                                                         
|3. | guarantee the repayment of money by any other person or the performance of any obligation of any other person; and                                                                                                                      
|   |                                                                                                                                                                                                                                         
|4. | mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of ours.                               

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Retirement and non-retirement of directors under an age
limit requirement.

There are no such provisions applicable to us under our Articles, our Notice of Articles or the *Business Corporations Act* (British Columbia).

Number of shares required for a director’s qualification.

Directors need not own any of our shares in order to qualify as
directors.

3.          
Rights, Preferences and Restrictions Attaching to Each Class of Shares

Dividends

Dividends may be declared by the directors from time to time and may be paid wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities, or in any one or more of those ways.  All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.  The *Business Corporations Act* (British Columbia) provides that no dividend may be paid if we are, or would thereby become, insolvent.

Voting Rights

Each of our shares is entitled to one vote on matters to which common shares ordinarily vote, including the annual election of directors, appointment of auditors and approval of corporate changes, unless special rights and restrictions have been attached to such shares.  There are no special rights or restrictions attached to our shares.  Directors automatically retire at each annual meeting, and may be elected thereat.  There are no staggered directorships among our directors.  There are no cumulative voting rights applicable to us.

Rights to Profits and Liquidation Rights

On the liquidation, dissolution, winding-up or other distribution of our assets among our shareholders, the holders of thecommon shares shall participate rateably in equal amounts per share, without preference or distinction, in our remaining assets.

Redemption

We may, subject to special rights and restrictions attached to the shares of any class or series and the *Business Corporations Act* (British Columbia), if authorized by our directors, purchase, redeem or otherwise acquire any of our shares at the price and upon the terms specified in such resolution.  A further condition outlined in our Articles provides that we must not make payment or provide any other consideration to purchase, redeem or to otherwise acquire any of our shares if there are reasonable grounds for believing that we are either insolvent or that making such payment or providing the consideration would render us insolvent.

Sinking Fund Provisions

We have no sinking fund provisions or similar obligations.

Shares Fully Paid

All of our shares must, by applicable law, be issued as fully
paid for cash, property or services. They are therefore non-assessable and not
subject to further calls for payment.

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Pre-emptive Rights

We have granted a pre-emptive right to Dejour to participate in all of our equity financings to the extent necessary to maintain its equity interest in us.

With respect to the rights, preferences and restrictions
attaching to our common shares, there are generally no significant differences
between Canadian and United States law as the shareholders, or the applicable
corporate statute, will determine the rights, preferences and restrictions
attaching to each class of our shares.

4.          
Changes to Rights and Restrictions to Shares

The *Business Corporations Act* (British Columbia) provides that a company may, by the type of shareholders’ resolution specified by the articles, or, if the articles do not specify the type of resolution, by a special resolution:

| | * | create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                           
| | * | vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.                                    

Our Articles provide that, subject to the *Business Corporations Act* (British Columbia) and the rights of the holders of issued shares, we may issue, allot, sell or otherwise dispose of the unissued shares and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine.  The issue price for a share with par value must be equal to or greater than the par value of the share.

An ordinary resolution is a resolution of shareholders that is approved by a majority of those votes cast at a properly constituted meeting of shareholders.  Our Articles provide that a special resolution is a resolution of shareholders that is approved by two thirds (66 2/3%) of those votes cast at a properly constituted meeting of shareholders.

The *Business Corporations Act* (British Columbia) provides that a company may reduce its capital if it is authorized to do so by a court order, or, if the capital is reduced to an amount that is not less thanthe realizable value of  the company’s assets less its liabilities, by a special resolution or court order.

Generally, there are no significant differences between British Columbia and United States law with respect to changing the rights of shareholders as most state corporation statutes require shareholder approval (usually a majority) for any such changes that affect the rights of shareholders.

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5.          
Meetings of Shareholders

Our Articles provide that unless an annual general meeting is deferred or waived in accordance with the *Business Corporations Act* (British Columbia), the Company must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by our directors.  Shareholder meetings are governed by our Articles but many important shareholder protections are also contained in the Securities Act (British Columbia) (the “BC Securities Act”) and the *Business Corporations Act* (British Columbia).  Our Articles provide that we will provide at least 21 days’ advance written notice of any meeting of shareholders and will provide for certain procedural matters and rules of order with respect to conduct of the meeting.  The directors may fix in advance a date, which is no fewer than 21 days prior to the date of the meeting for the purpose of determining shareholders entitled to receive notice of and to attend and vote at a general meeting.

The BC Securities Act and the *Business Corporations Act* (British Columbia) superimpose requirements that generally provide that shareholder meetings require not more than a 60 day notice period from initial public notice and that we make a thorough advance search of intermediary and brokerage registered shareholdings to facilitate communication with beneficial shareholders so that meeting proxy and information materials can be sent via the brokerages to unregistered but beneficial shareholders.  The form and content of information circulars and proxies and  like matters are governed by the BC Securities Act and the *Business Corporations Act* (British Columbia).  This legislation specifies the disclosure requirements for the proxy materials and various corporate actions, background information on the nominees for election for director, executive compensation paid in the previous year and full details of any unusual matters or related party transactions.  We must hold an annual shareholder meeting open to all shareholders for personal attendance or by proxy at each shareholder’s determination.  The meeting must be held within 13 months of the previous annual shareholder meeting and must present audited statements which are no more than 180 days old at such meeting.

Most state corporation statutes require a public company to hold an annual meeting for the election of directors and for the consideration of other appropriate matters.  The state statutes also include general provisions relating to shareholder voting and meetings.  Apart from the timing of when an annual meeting must be held and the percentage of shareholders required to call an annual meeting or an extraordinary meeting, there are generally no material differences between Canadian and United States law respecting annual meetings and extraordinary meetings

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6.          
Rights to Own Securities

There are no limitations under our Articles or in the *Business Corporations Act* (British Columbia) on the right of persons who are not citizens of Canada to hold or vote common shares.

7.          
Restrictions on Changes in Control, Mergers, Acquisitions or Corporate
Restructuring of the Company

Our Articles do not contain any provisions that would have the effect of delaying, deferring or preventing a change of control.  We have not implemented any shareholders’ rights or other “poison pill” protection against possible take-overs.  We do not have any agreements which are triggered by a take-over or other change of control.  There are no provisions in our Articles triggered by or affected by a change in outstanding shares which gives rise to a change in control.  There are no provisions in our material agreements giving special rights to any person on a change in control.

The *Business Corporations Act* (British Columbia) does not contain any provisions that would have the effect of delaying, deferring or preventing a change of control of a company.

Generally, there are no significant differences between British Columbia and United States law in this regard, as many state corporation statutes also do not contain such provisions and only empower a company’s board of directors to adopt such provisions.

8.          
Ownership Threshold Requiring Public Disclosure

Our Articles do not require disclosure of share ownership.  Share ownership of director nominees must be reported annually in proxy materials sent to our shareholders.  There are no requirements under British Columbia corporate law to report ownership of our shares, but the BC Securities Act requires disclosure of trading by insiders (generally officers, directors and holders of 10% of voting shares) within 10 days of the trade.  Controlling shareholders (generally those in excess of 20% of outstanding shares) must provide seven days advance notice of share sales. Effective January 31, 2003 all insider trading reports filed by our insiders pursuant to Canadian securities legislation are available on the Internet at www.sedi.ca.

Most state corporation statutes do not contain provisions governing the threshold above which shareholder ownership must be disclosed.  United States federal securities laws require a company that is subject to the reporting requirements of the Securities Exchange Act of 1934 to disclose in its annual reports filed with the Securities and Exchange Commission those shareholders who own more than 5% of a corporation’s issued and outstanding shares.

9.          
Differences in Law between the US and Canada

Differences in the law between the United States and Canada,
where applicable, have been explained above within each category.

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10.          
Changes in the Capital of the Company

There are no conditions imposed by our Notice of Articles or Articles which are more stringent than those required by the *Business Corporations Act* (British Columbia).

C.          
Material Contracts

For the two years immediately preceding December 31, 2008, there were no material contracts entered into, other than contracts entered into in the ordinary course of business, to which we were a party, except as provided below:

- Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated January 5, 2009,
- First Amendment to Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated February 16, 2009,
- Second Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated April 30, 2009, and
- Third Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated June 30, 2009.

For a description of those contracts entered into in the ordinary course of business refer to Item 4A – History and Development of Company

D.          
Exchange Controls

We are incorporated pursuant to the laws of the Canada
Business Corporations Act. There is no law or governmental decree or
regulation in Canada that restricts the export or import of capital, or affects
the remittance of dividends, interest or other payments to a non-resident holder
of our securities, other than withholding tax requirements. Any such remittances
to United States residents are generally subject to withholding tax; however, no
such remittances are likely in the foreseeable future. See Taxation, below.

There is no limitation imposed by the laws of Canada or by our
Articles on the right of a non-resident to hold or vote his or its common
shares, other than as provided in the Investment Canada Act (Canada) (the
Investment Act). The following discussion summarizes the material features of
the Investment Act for a non-resident who proposes to acquire a controlling
number of our common shares. It is general only, it is not a substitute for
independent advice from an investors own advisor, and it does not anticipate
statutory or regulatory amendments. We do not believe the Investment Act will
have any affect on us or on our non-Canadian shareholders due to a number of
factors including the nature of our operations and our relatively small
capitalization.

The Investment Act generally prohibits implementation of a
reviewable investment by an individual, government or agency thereof,
corporation, partnership, trust or joint venture (each an entity) that is not
a Canadian as defined in the Investment Act (i.e. a non-Canadian), unless
after review the Director of Investments (the Director) appointed by the
Minister responsible for the Investment Act is satisfied that the investment is
likely to be of net benefit to Canada. The size and nature of a proposed
transaction may give rise to an obligation to notify the Director to seek
approval for the transaction. An investment in our securities by a non-Canadian
(other than a WTO Investor as that term is defined in the Investment Act and
which term includes entities which are nationals of, or are controlled by
nationals of, member states of the World Trade Organization) when we were not
controlled by a WTO Investor, would be reviewable under the Investment Act if it
was an investment to acquire control of us and the value of our assets, as
determined in accordance with the regulations promulgated under the Investment
Act, was over CDN$5 million, or if an order for review was made by the federal
cabinet on the grounds that the investment related to Canadas cultural heritage
or national identity, regardless of the value of our assets. An investment in
our securities by a WTO Investor, or by a non-Canadian when we were controlled
by a WTO Investor, would be reviewable under the Investment Act if it was an
investment to acquire control of us and the value of our assets, as determined
in accordance with the regulations promulgated under the Investment Act, was not
less than a specified amount, which for 2007 was CDN$281 million. A non-Canadian
would acquire control of us for the purposes of the Investment Act if the
non-Canadian acquired a majority of our common shares. The acquisition of less
than a majority but one-third or more of our common shares would be presumed to
be an acquisition of control of us unless it could be established that, on the
acquisition, we were not controlled in fact by the acquirer through the
ownership of the common shares.

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Certain transactions relating to our common shares would be
exempt from the Investment Act, including:

| | (a) | an acquisition of our common shares by a person in the
      ordinary course of that persons business as a trader or dealer in
      securities;                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                         
| | (b) | an acquisition of control of us in connection with the
      realization of security granted for a loan or other financial assistance
      and not for a purpose related to the provisions of the Investment Act;
      and                                            
| |     |                                                                                                                                                                                                                                                                         
| | (c) | an acquisition of control of us by reason of an
      amalgamation, merger, consolidation or corporate reorganization following
      which the ultimate direct or indirect control in fact of us, through the
      ownership of our common shares, remained
unchanged.

E.          
Taxation

Material Canadian Federal Income Tax Consequences for United
States Residents

The following summarizes the material Canadian federal income
tax consequences generally applicable to the holding and disposition of our
shares by a holder (in this summary, a U.S. Holder) who, (a) for the purposes
of the Income Tax Act (Canada) (the Tax Act) and at all relevant times, is not
resident in Canada, deals at arms length with us, holds our shares as capital
property and does not use or hold our shares in the course of carrying on, or
otherwise in connection with, a business in Canada, and (b) for the purposes of
the Canada-United States Income Tax Convention, 1980 (the Treaty) and at all
relevant times, is a resident solely of the United States, has never been a
resident of Canada, and has not held or used (and does not hold or use) our
shares in connection with a permanent establishment or fixed base in Canada.
This summary does not apply to traders or dealers in securities, limited
liability companies, tax-exempt entities, insurers, financial institutions
(including those to which the mark-to-market provisions of the Tax Act apply),
or any other holder in special circumstances.

This summary is based on the current provisions of the Tax Act
including all regulations thereunder, the Treaty, all proposed amendments to the
Tax Act, the regulations and the Treaty publicly announced by the Government of
Canada to the date hereof, and our understanding of the current administrative
practice of the Canada Revenue Agency. It has been assumed that all currently
proposed amendments will be enacted as proposed and that there will be no other
relevant change in any governing law or administrative practice, although no
assurances can be given in these respects. The summary does not take into
account Canadian provincial, U.S. federal (which follows further below), state
or other foreign income tax law or practice. The tax consequences to any
particular U.S. Holder will vary according to the status of that holder as an
individual, trust, corporation, partnership or other entity, the jurisdictions
in which that holder is subject to taxation, and generally according to that
holders particular circumstances. Accordingly, this summary is not, and is not
to be construed as, Canadian tax advice to any particular U.S. Holder. All U.S.
Holders are advised to consult with their own tax advisors regarding their
particular circumstances. The discussion below is qualified accordingly.

Dividends

Dividends paid or deemed to be paid to a U.S. Holder by us will
be subject to Canadian withholding tax. The Tax Act requires a 25% withholding
unless reduced under a tax treaty. Under the Treaty, provided that a holder can
demonstrate that it is a qualifying U.S. Holder, the rate of withholding tax on
dividends paid to a U.S. Holder is generally limited to 15% of the gross amount
of the dividend (or 5% if the U.S. Holder is a corporation and beneficially owns
at least 10% of our voting shares). We will be required to withhold the
applicable withholding tax from any dividend and remit it to the Canadian
government for the U.S. Holders account.

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Disposition

For purposes of the following discussion, we have assumed that
our shares will remain listed on the TSX. A U.S. Holder is not subject to tax
under the Tax Act in respect of a capital gain realized on the disposition of
our shares in the open market unless the shares are taxable Canadian property
to the holder thereof and the U.S. Holder is not entitled to relief under the
Treaty. Our shares will be taxable Canadian property to a U.S. Holder (a) if, at
any time during the 60 months preceding the disposition, the U.S. Holder or
persons with whom the U.S. Holder did not deal at arms length alone or together
owned 25% or more of our issued shares of any class or series, or (b) in other
specific circumstances, including where shares were acquired for other
securities in a tax-deferred transaction. If our shares constitute taxable
Canadian property to the holder, the holder will (unless relieved under the
Treaty) be subject to Canadian income tax on any gain. The taxpayers capital
gain or loss from a disposition of the share is the amount, if any, by which the
proceeds of disposition exceed (or are exceeded by) the aggregate of the
adjusted cost base and reasonable expenses of disposition. One-half of the
capital gain is included in income and one-half of the capital loss is
deductible from capital gains realized in the same year. Unused capital losses
may be carried back three taxation years or forward indefinitely and applied to
reduce capital gains realized in those years.

A U.S. Holder whose shares do constitute taxable Canadian
property, and who would therefore be liable for Canadian income tax under the
Tax Act, may be relieved from such liability under the Treaty if the value of
such shares at the time of disposition is not derived principally from real
property situated in Canada. However, as the application of this potential
Treaty relief is quite uncertain, a U.S. Holder to whom Treaty relief may be
relevant should consult in this regard with their own tax advisors at the
relevant time.

United States Tax Consequences

United States Federal Income Tax Consequences

The following is a discussion of all material United States
federal income tax consequences, under current law, generally applicable to a
U.S. Holder (as hereinafter defined) of our common shares. This discussion does
not address all potentially relevant federal income tax matters and it does not
address consequences peculiar to persons subject to special provisions of
federal income tax law, such as those described below as excluded from the
definition of a U.S. Holder. In addition, this discussion does not cover any
state, local or foreign tax consequences. (See Taxation - Canadian Federal
Income Tax Consequences above). Accordingly, we urge holders and prospective
holders of our common shares to consult their own tax advisors about the
specific federal, state, local and foreign tax consequences to them of
purchasing, owning and disposing of our common shares, based upon their
individual circumstances.

The following discussion is based upon the sections of the
Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations,
published Internal Revenue Service (IRS) rulings, published administrative
positions of the IRS and court decisions that are currently applicable, any or
all of which could be materially and adversely changed, possibly on a
retroactive basis, at any time and which are subject to differing
interpretations. This discussion does not consider the potential effects, both
adverse and beneficial, of any proposed legislation which, if enacted, could be
applied, possibly on a retroactive basis, at any time.

U.S. Holders

As used herein, a U.S. Holder means a holder of our common
shares who is a citizen or individual resident of the United States, a
corporation or partnership created or organized in or under the laws of the
United States or of any political subdivision thereof, an entity created or
organized in or under the laws of the United States or of any political
subdivision thereof which has elected to be treated as a

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corporation for United States federal income tax purposes
(under Treasury Regulation Section 301.7701 -3), an estate whose income is
taxable in the United States irrespective of source or a trust subject to the
primary supervision of a court within the United States and control of a United
States fiduciary as described in Section 7701(a)(30) of the Code. This summary
does not address the tax consequences to, and U.S. Holder does not include,
persons subject to specific provisions of federal income tax law, such as
tax-exempt organizations, qualified retirement plans, individual retirement
accounts and other tax-deferred accounts, financial institutions, insurance
companies, real estate investment trusts, regulated investment companies,
broker-dealers, non-resident alien individuals, persons or entities that have a
functional currency other than the U.S. dollar, shareholders subject to the
alternative minimum tax, shareholders who hold common shares as part of a
straddle, hedging or conversion transaction, and shareholders who acquired their
common shares through the exercise of employee stock options or otherwise as
compensation for services. This summary is limited to U.S. Holders who own our
common shares as capital assets and who own (directly and indirectly, pursuant
to applicable rules of constructive ownership) no more than 5% of the value of
our total outstanding stock. This summary does not address the consequences to a
person or entity holding an interest in a shareholder or the consequences to a
person of the ownership, exercise or disposition of any options, warrants or
other rights to acquire common shares. In addition, this summary does not
address special rules applicable to United States persons (as defined in Section
7701(a)(30) of the Code) holding common shares through a foreign partnership or
to foreign persons holding common shares through a domestic partnership.

Distribution on Our Common Shares

In general, U.S. Holders receiving dividend distributions
(including constructive dividends) with respect to our common shares are
required to include in gross income for United States federal income tax
purposes the gross amount of such distributions, equal to the U.S. dollar value
of such distributions on the date of receipt (based on the exchange rate on such
date), to the extent that we have current or accumulated earnings and profits,
without reduction for any Canadian income tax withheld from such distributions.
Such Canadian tax withheld may be credited, subject to certain limitations,
against the U.S. Holders federal income tax liability or, alternatively, may be
deducted in computing the U.S. Holders federal taxable income by those who
itemize deductions. (See more detailed discussion at Foreign Tax Credit
below). To the extent that distributions exceed our current or accumulated
earnings and profits, they will be treated first as a return of capital up to
the U.S. Holders adjusted basis in the common shares and thereafter as gain
from the sale or exchange of property. Preferential tax rates for long-term
capital gains are applicable to a U.S. Holder which is an individual, estate or
trust. There are currently no preferential tax rates for long-term capital gains
for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is
not converted by the recipient into U.S. dollars on the date of receipt, a U.S.
Holder will have a tax basis in the foreign currency equal to its U.S. dollar
value on the date of receipt. Generally any gain or loss recognized upon a
subsequent sale or other disposition of the foreign currency, including the
exchange for U.S. dollars, will be ordinary income or loss. However, an
individual whose realized gain does not exceed $200 will not recognize that
gain, provided that there are no expenses associated with the transaction that
meet the requirements for deductibility as a trade or business expense (other
than travel expenses in connection with a business trip) or as an expense for
the production of income.

Dividends paid on our common shares generally will not be
eligible for the dividends received deduction provided to corporations receiving
dividends from certain United States corporations. A U.S. Holder which is a
corporation and which owns shares representing at least 10% of our voting power
and value may, under certain circumstances, be entitled to a 70% (or 80% if the
U.S. Holder owns shares representing at least 20% of our voting power and value)
deduction of the United States source portion of dividends received from us
(unless we qualify as a passive foreign investment company, as defined

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below). We do not anticipate that we will earn any United
States income, however, and therefore we do not anticipate that any U.S. Holder
will be eligible for the dividends received deduction.

Under current Treasury Regulations, dividends paid on our
common shares, if any, generally will not be subject to information reporting
and generally will not be subject to U.S. backup withholding tax. However,
dividends and the proceeds from a sale of our common shares paid in the U.S.
through a U.S. or U.S. related paying agent (including a broker) will be subject
to U.S. information reporting requirements and may also be subject to the 28%
U.S. backup withholding tax, unless the paying agent is furnished with a duly
completed and signed Form W-9. Any amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.
Holders U.S. federal income tax liability, provided the required information is
furnished to the IRS.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions)
Canadian income tax with respect to the ownership of our common shares may be
entitled, at the option of the U.S. Holder, to either receive a deduction or a
tax credit for such foreign tax paid or withheld. Generally, it will be more
advantageous to claim a credit because a credit reduces United States federal
income taxes on a dollar-for-dollar basis, while a deduction merely reduces the
taxpayers income subject to tax. This election is made on a year-by-year basis
and generally applies to all foreign taxes paid by (or withheld from) the U.S.
Holder during that year. There are significant and complex limitations which
apply to the credit, among which is the general limitation that the credit
cannot exceed the proportionate share of the U.S. Holders United States income
tax liability that the U.S. Holders foreign source income bears to his or its
worldwide taxable income. In the determination of the application of this
limitation, the various items of income and deduction must be classified into
foreign and domestic sources. Complex rules govern this classification process.
In addition, this limitation is calculated separately with respect to specific
classes of income such as passive income,  high withholding tax interest,
financial services income, shipping income, and certain other
classifications of income. Dividends distributed by us will generally constitute
passive income or, in the case of certain U.S. Holders, financial services
income for these purposes. The availability of the foreign tax credit and the
application of the limitations on the credit are fact specific, and U.S. Holders
of our common shares should consult their own tax advisors regarding their
individual circumstances.

Disposition of Our Common Shares

In general, U.S. Holders will recognize gain or loss upon the
sale of our common shares equal to the difference, if any, between (i) the
amount of cash plus the fair market value of any property received, and (ii) the
shareholders tax basis in our common shares. Preferential tax rates apply to
long-term capital gains of U.S. Holders which are individuals, estates or
trusts. In general, gain or loss on the sale of our common shares will be
long-term capital gain or loss if the common shares are a capital asset in the
hands of the U.S. Holder and are held for more than one year. Deductions for net
capital losses are subject to significant limitations. For U.S. Holders that are
not corporations, any unused portion of such net capital loss may be carried
over to be used in later tax years until such net capital loss is thereby
exhausted. For U.S. Holders that are corporations (other than corporations
subject to Subchapter S of the Code), an unused net capital loss may be carried
back three years and carried forward five years from the loss year to be offset
against capital gains until such net capital loss is thereby exhausted.

Other Considerations

Set forth below are certain material exceptions to the
above-described general rules describing the United States federal income tax
consequences resulting from the holding and disposition of common shares:

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Foreign Investment Company

If 50% or more of the combined voting power or total value of
our outstanding shares is held, directly or indirectly, by citizens or residents
of the United States, United States domestic partnerships or corporations, or
estates or trusts other than foreign estates or trusts (as defined by the Code
Section 7701(a)(31)), and we are found to be engaged primarily in the business
of investing, reinvesting, or trading in securities, commodities, or any
interest therein, it is possible that we may be treated as a foreign investment
company as defined in Section 1246 of the Code, causing all or part of any gain
realized by a U.S. Holder selling or exchanging common shares to be treated as
ordinary income rather than capital gain. We do not believe that we currently
qualify as a foreign investment company. However, there can be no assurance that
we will not be considered a foreign investment company for the current or any
future taxable year.

Passive Foreign Investment Company

United States income tax law contains rules governing passive
foreign investment companies (PFIC) which can have significant tax effects on
U.S. Holders of foreign corporations. These rules do not apply to non-U.S.
Holders. Section 1297 of the Code defines a PFIC as a corporation that is not
formed in the United States if, for any taxable year, either (i) 70% or more of
its gross income is passive income, which includes interest, dividends and
certain rents and royalties or (ii) the average percentage, by fair market value
(or, if the corporation is not publicly traded and either is a controlled
foreign corporation or makes an election, by adjusted tax basis), of its assets
that produce or are held for the production of passive income is 50% or more.
We appear to have been a PFIC for the fiscal year ended August 31, 2006, and at
least certain prior fiscal years. In addition, we expect to qualify as a PFIC
for the fiscal year ending August 31, 2007 and we may also qualify as a PFIC in
future fiscal years. Each of our U.S. Holders is urged to consult a tax advisor
with respect to how the PFIC rules affect such U.S. Holders tax situation.

Each of our U.S. Holders who holds stock in a foreign
corporation during any year in which such corporation qualifies as a PFIC is
subject to United States federal income taxation under one of three alternative
tax regimes at the election of such U.S. Holder. The following is a discussion
of such alternative tax regimes applied to such U.S. Holders of our stock. In
addition, special rules apply if a foreign corporation qualifies as both a PFIC
and a controlled foreign corporation (as defined below) and a U.S. Holder
owns, actually or constructively, 10% or more of the total combined voting power
of all classes of stock entitled to vote of such foreign corporation (See more
detailed discussion at Controlled Foreign Corporation below).

A U.S. Holder who elects to treat us as a qualified electing
fund (QEF) will be subject, under Section 1293 of the Code, to current federal
income tax for any taxable year to which the election applies in which we
qualify as a PFIC on his pro rata share of our (i) net capital gain (the
excess of net long-term capital gain over net short-term capital loss), which
will be taxed as long-term capital gain, and (ii) ordinary earnings (the
excess of earnings and profits over net capital gain), which will be taxed as
ordinary income, in each case, for the shareholders taxable year in which (or
with which) our taxable year ends, regardless of whether such amounts are
actually distributed. A U.S. Holders tax basis in the common shares will be
increased by any such amount that is included in income but not distributed.

The procedure a U.S. Holder must comply with in making an
effective QEF election, and the consequences of such election, will depend on
whether the year of the election is the first year in the U.S. Holders holding
period in which we are a PFIC. If the U.S. Holder makes a QEF election in such
first year, i.e., a timely QEF election, then the U.S. Holder may make the QEF
election by simply filing the appropriate documents at the time the U.S. Holder
files his tax return for such first year. If, however, we qualified as a PFIC in
a prior year during the U.S. Holders holding period, then, in order to avoid
the Section 1291 rules discussed below, in addition to filing documents, the
U.S. Holder must elect to recognize under the rules of Section 1291 of the Code
(discussed herein) (i) any gain that he

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would otherwise recognize if the U.S. Holder sold his stock on
the qualification date or (ii) if we are a controlled foreign corporation, the
U.S. Holders pro rata share of our post-1986 earnings and profits as of the
qualification date. The qualification date is the first day of our first tax
year in which we qualified as a QEF with respect to such U.S. Holder. For
purposes of this discussion, a U.S. Holder who makes (i) a timely QEF election
or (ii) an untimely QEF election and either of the above-described
gain-recognition elections under Section 1291 is referred to herein as an
Electing U.S. Holder. A U.S. Holder who holds common shares at any time during
a year in which we are a PFIC and who is not an Electing U.S. Holder (including
a U.S. Holder who makes an untimely QEF election and makes neither of the
above-described gain-recognition elections) is referred to herein as a
Non-Electing U.S. Holder. An Electing U.S. Holder (i) generally treats any
gain realized on the disposition of his common shares as capital gain and (ii)
may either avoid interest charges resulting from PFIC status altogether or make
an annual election, subject to certain limitations, to defer payment of current
taxes on his share of our annual realized net capital gain and ordinary earnings
subject, however, to an interest charge. If the U.S. Holder is not a
corporation, any interest charge imposed under the PFIC regime would be treated
as personal interest that is not deductible.

In order for a U.S. Holder to make (or maintain) a valid QEF
election, we must provide certain information regarding our net capital gains
and ordinary earnings and permit our books and records to be examined to verify
such information. We intend to make the necessary information available to U.S.
Holders to permit them to make (and maintain) QEF elections with respect to us.
We urge each U.S. Holder to consult a tax advisor regarding the availability of,
and procedure for making, the QEF election.

A QEF election, once made with respect to us, applies to the
tax year for which it was made and to all subsequent tax years, unless the
election is invalidated or terminated, or the IRS consents to revocation of the
election. If a QEF election is made by a U.S. Holder and we cease to qualify as
a PFIC in a subsequent tax year, the QEF election will remain in effect,
although not applicable, during those tax years in which we do not qualify as a
PFIC. Therefore, if we again qualify as a PFIC in a subsequent tax year, the QEF
election will be effective and the U.S. Holder will be subject to the rules
described above for Electing U.S. Holders in such tax year and any subsequent
tax years in which we qualify as a PFIC. In addition, the QEF election remains
in effect, although not applicable, with respect to an Electing U.S. Holder even
after such U.S. Holder disposes of all of his or its direct and indirect
interest in our shares. Therefore, if such U.S. Holder reacquires an interest in
us, that U.S. Holder will be subject to the rules described above for Electing
U.S. Holders for each tax year in which we qualify as a PFIC.

In the case of a Non-Electing U.S. Holder, special taxation
rules under Section 1291 of the Code will apply to (i) gains realized on the
disposition (or deemed to be realized by reasons of a pledge) of his common
shares and (ii) certain excess distributions, as defined in Section 1291(b),
by us.

A Non-Electing U.S. Holder generally would be required to pro
rate all gains realized on the disposition of his common shares and all excess
distributions on his common shares over the entire holding period for the common
shares. All gains or excess distributions allocated to prior years of the U.S.
Holder (excluding any portion of the holders period prior to the first day of
the first year (i) which began after December 31, 1986, and (ii) for which we
were a PFIC) would be taxed at the highest tax rate for each such prior year
applicable to ordinary income. The Non-Electing U.S. Holder also would be liable
for interest on the foregoing tax liability for each such prior year calculated
as if such liability had been due with respect to each such prior year. A
Non-Electing U.S. Holder that is not a corporation must treat this interest
charge as personal interest which, as discussed above, is wholly
non-deductible. The balance, if any, of the gain or the excess distribution will
be treated as ordinary income in the year of the disposition or distribution,
and no interest charge will be incurred with respect to such balance. In certain
circumstances, the sum of the tax and the PFIC interest charge may exceed the
amount of the excess distribution received, or the amount of proceeds of
disposition realized, by the U.S. Holder.

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If we are a PFIC for any taxable year during which a
Non-Electing U.S. Holder holds our common shares, then we will continue to be
treated as a PFIC with respect to such common shares, even if we are no longer
definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC
status by electing to recognize gain (which will be taxed under the rules
discussed above for Non-Electing U.S. Holders) as if such common shares had been
sold on the last day of the last taxable year for which we were a PFIC.

Effective for tax years of U.S. Holders beginning after
December 31, 1997, U.S. Holders who hold (actually or constructively) marketable
stock of a foreign corporation that qualifies as a PFIC may elect to mark such
stock to the market annually (a mark-to-market election). If such an election
is made, such U.S. Holder will generally not be subject to the special taxation
rules of Section 1291 discussed above. However, if the mark-to-market election
is made by a Non-Electing U.S. Holder after the beginning of the holding period
for the PFIC stock, then the Section 1291 rules will apply to certain
dispositions of, distributions on and other amounts taxable with respect to our
common shares. A U.S. Holder who makes the mark-to-market election will include
in income for each taxable year for which the election is in effect an amount
equal to the excess, if any, of the fair market value of our common shares as of
the close of such tax year over such U.S. Holders adjusted basis in such common
shares. In addition, the U.S. Holder is allowed a deduction for the lesser of
(i) the excess, if any, of such U.S. Holders adjusted tax basis in the common
shares over the fair market value of such shares as of the close of the tax
year, or (ii) the excess, if any, of (A) the mark-to-market gains for our common
shares included by such U.S. Holder for prior tax years, including any amount
which would have been treated as a mark-to-market gain for any prior tax year
but for the Section 1291 rules discussed above with respect to Non-Electing U.S.
Holders, over (B) the mark-to-market losses for shares that were allowed as
deductions for prior tax years. A U.S. Holders adjusted tax basis in our common
shares will be adjusted to reflect the amount included in or deducted from
income as a result of a mark-to-market election. A mark-to-market election
applies to the taxable year in which the election is made and to each subsequent
taxable year, unless our common shares cease to be marketable, as specifically
defined, or the IRS consents to revocation of the election. Because the IRS has
not established procedures for making a mark-to-market election, U.S. Holders
should consult their tax advisor regarding the manner of making such an
election. No view is expressed regarding whether our common shares are
marketable for these purposes or whether the election will be available.

Under Section 1291(f) of the Code, the IRS has issued Proposed
Treasury Regulations that, subject to certain exceptions, would treat as taxable
certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally
not otherwise taxed, such as gifts, exchanges pursuant to corporate
reorganizations, and transfers at death. Generally, in such cases the basis of
our common shares in the hands of the transferee and the basis of any property
received in the exchange for those common shares would be increased by the
amount of gain recognized. Under the Proposed Treasury Regulations, an Electing
U.S. Holder would not be taxed on certain transfers of PFIC stock, such as
gifts, exchanges pursuant to corporate reorganizations, and transfers at death.
The transferees basis in this case will depend on the manner of the transfer.
In the case of a transfer by an Electing U.S. Holder upon death, for example,
the transferees basis is generally equal to the fair market value of the
Electing U.S. Holders common shares as of the date of death under Section 1014
of the Code. The specific tax effect to the U.S. Holder and the transferee may
vary based on the manner in which the common shares are transferred. Each U.S.
Holder of our shares is urged to consult a tax advisor with respect to how the
PFIC rules affect his or its tax situation.

Whether or not a U.S. Holder makes a timely QEF election with
respect to our common shares, certain adverse rules may apply in the event that
we are a PFIC and any foreign corporation in which we directly or indirectly
hold shares is a PFIC (a lower-tier PFIC). Pursuant to certain Proposed
Treasury Regulations, a U.S. Holder would be treated as owning his or its
proportionate amount of any lower-tier PFIC shares, and generally would be
subject to the PFIC rules with respect to such indirectly-held PFIC shares
unless such U.S. Holder makes a timely QEF election with respect thereto. We do
not currently

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have any subsidiaries. If we obtain any subsidiaries, we intend
to make the necessary information available to U.S. Holders to permit them to
make (and maintain) QEF elections with respect to each subsidiary of ours that
is a PFIC.

Under the Proposed Treasury Regulations, a U.S. Holder who does
not make a timely QEF election with respect to a lower-tier PFIC generally would
be subject to tax (and the PFIC interest charge) on (i) any excess distribution
deemed to have been received with respect to his or its lower-tier PFIC shares
and (ii) any gain deemed to arise from a so-called indirect disposition of
such shares. For this purpose, an indirect disposition of lower-tier PFIC shares
would generally include (i) a disposition by us (or an intermediate entity) of
lower-tier PFIC shares, and (ii) any other transaction resulting in a diminution
of the U.S. Holders proportionate ownership of the lower-tier PFIC, including
an issuance of additional common shares by us (or an intermediate entity).
Accordingly, each prospective U.S. Holder should be aware that he or it could be
subject to tax even if such U.S. Holder receives no distributions from us and
does not dispose of its common shares. We strongly urge each prospective U.S.
Holder to consult a tax advisor with respect to the adverse rules applicable,
under the Proposed Treasury Regulations, to U.S. Holders of lower-tier PFIC
shares.

Certain special, generally adverse, rules will apply with
respect to our common shares while we are a PFIC unless the U.S. Holder makes a
timely QEF election. For example under Section 1298(b)(6) of the Code, a U.S.
Holder who uses PFIC stock as security for a loan (including a margin loan)
will, except as may be provided in regulations, be treated as having made a
taxable disposition of such shares.

Controlled Foreign Corporation

If more than 50% of the total combined voting power of all our
of shares entitled to vote or the total value of our shares is owned, actually
or constructively, by citizens or residents of the United States, United States
domestic partnerships or corporations, or estates or trusts other than foreign
estates or trusts (as defined by the Code Section 7701(a)(31)), each of which
own, actually or constructively, 10% or more of the total combined voting power
of all of our classes of shares entitled to vote (each, a United States
Shareholder), we could be treated as a controlled foreign corporation (CFC)
under Subpart F of the Code. This classification would effect many complex
results, one of which is the inclusion of certain income of a CFC which is
subject to current U.S. tax. The United States generally taxes United States
Shareholders of a CFC currently on their pro rata shares of the Subpart F income
of the CFC. Such United States Shareholders are generally treated as having
received a current distribution out of the CFCs Subpart F income and are also
subject to current U.S. tax on their pro rata shares of increases in the CFCs
earnings invested in U.S. property. The foreign tax credit described above may
reduce the U.S. tax on these amounts. In addition, under Section 1248 of the
Code, gain from the sale or exchange of shares by a U.S. Holder of our common
shares which is or was a United States Shareholder at any time during the
five-year period ending on the date of the sale or exchange is treated as
ordinary income to the extent of earnings and profits attributable to the shares
sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the
foreign corporation generally will not be treated as a PFIC with respect to
United States Shareholders of the CFC. This rule generally will be effective for
taxable years of United States Shareholders beginning after 1997 and for taxable
years of foreign corporations ending with or within such taxable years of United
States Shareholders. Special rules apply to United States Shareholders who are
subject to the special taxation rules under Section 1291 discussed above with
respect to a PFIC. Because of the complexity of Subpart F, a more detailed
review of these rules is outside of the scope of this discussion. We do not
believe that we currently qualify as a CFC. However, there can be no assurance
that we will not be considered a CFC for the current or any future taxable year.

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F.          
Dividends and Paying Agents

This Form 20-F is filed as an annual report under the Exchange
Act and accordingly the information called for in Item 10.F is not required.

G.          
Statement by Experts

This Form 20-F is filed as an annual report under the Exchange
Act and accordingly the information called for in Item 10.G is not required.

H.          
Documents on Display

Exhibits attached to this Annual Report are also available for
viewing at our offices, Suite 350, 885 Dunsmuir Street, Vancouver, British
Columbia, Canada, V6C 1N5, or you may request them by calling our office at
(604) 688-7377. Copies of our financial statements and other continuous
disclosure documents required under securities rules are available for viewing
on the internet at www.sedar.com.

I.          
Subsidiary Information

Not applicable.

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ITEM
11           QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM
12           DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES

A.          
Debt Securities

Not applicable.

B.          
Warrants and Rights

Not applicable.

C.          
Other Securities

Not applicable.

D.          
American Depository Shares

Not applicable.

PART II

ITEM
13           DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM
14           MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM
15           CONTROLS AND
PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our chief
executive officer and chief financial officer, our management conducted an
evaluation of the effectiveness of our Companys disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d  15(e) of the
U.S. Securities Exchange Act of 1934, as amended (the Exchange Act)), as of
December 31, 2008. Based on such evaluation, our chief executive officer and
chief financial officer concluded that, as of December 31, 2008, our Companys
disclosure controls and procedures were not effective due to the identification
of material weaknesses in our internal control over financial reporting
described below:

Managements Report on Internal Control over Financial
Reporting; Changes in Internal Control over Financial Reporting

Under the Securities Exchange Act, our management is
responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act. Our internal control over financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles (GAAP). Our controls include policies and procedures
that:

- Pertain to the maintenance of records that, in reasonable detail,
  accurately and fairly reflect the transactions and dispositions of our assets;

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- Provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures are being
  made only in accordance with authorizations of management and directors; and
- Provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of our assets that could have a
  material effect on the annual financial statements or inter financial
  statements.

A material weakness is a deficiency, or combination of
deficiencies, in internal control over financial reporting, such that there is
reasonable possibility that a material misstatement of our annual or interim
financial statement will not be prevented or detected on a timely basis.

Management conducted an evaluation of the design and operation
of the Companys internal control over financial reporting as of December 31,
2008 based on the criteria set forth in Internal Control  Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. The evaluation included review of the documentation of
controls, evaluation of the design effectiveness of controls, testing of the
operating effectiveness of controls and a conclusion on this evaluation.

In performing its assessment, management identified the
following material weaknesses: absence of adequate segregation of duties
relating to oversight and management of our systems. Our controller who is an
outside consultant performs substantially all of our bookkeeping functions and
preparation of financial statements and due to a lack of resources, oftentimes
her work process and product are not monitored by other qualified management
team members. The absence of such adequate segregation of duties may have an
affect on the systems which we use in the evaluation and processing of certain
accounts and areas and in the posting and recording of journal entries into
certain accounts, most notably, our year-end financial statement closing process
and debt management process.

In light of the conclusion that our internal control over
financial reporting was not effective, our management is in the process of
implementing a plan intended to remediate such ineffectiveness and to strengthen
our internal controls over financial reporting through the implementation of
certain remedial measures, which include:

| | 1. | Improving the control and oversight of the duties
      relating to the systems we use in the evaluation and processing of certain
      accounts and areas and in the posting and recording of journal entries
      into certain accounts (in which material weaknesses have been identified).
      We have begun these improvements and expect them to be on-going.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | The segregation of duties relating to the processing of
      accounts and the recording of journal entries into certain
  accounts.                                                                                                                                                                                                                                   

Because of its inherent limitations, internal control over
financial reporting may not be able to prevent or detect misstatements on a
timely basis, which may be a product of collusion, failure to abide by controls,
error or fraud. In addition, projections of any evaluation of the internal
controls effectiveness to future periods are subject to the risk that the
control may become inadequate because of changes in conditions, or that the
degree of compliance with the policies and procedures may deteriorate.

In its assessment of the effectiveness of internal control over
financial reporting as of December 31, 2007, our management identified the
following material weaknesses:

During the year end procedures a number of misstatements and
disclosure deficiencies were identified in the draft financial statements for
the year ended December 31, 2007 prepared by us. These misstatements and
disclosure deficiencies sere subsequently corrected by our management and such
corrections are reflected in our consolidated financial statements. Our
management determined that

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these adjustments has resulted from control deficiencies
because we do not have sufficient accounting and finance personnel with
adequately comprehensive accounting knowledge to properly address certain
non-routine accounting and financial reporting matters and this control
deficiency constitutes a material weakness.

As at December 31, 2007, other areas of control deficiencies
that could have resulted in misstatements were noted as follows:

- a lack of segregation of duties. Due to the small size of our Company there
  is no effective way to completely segregate tasks and as a result there is a
  chance of misstatement. However, managements oversight and approval of
  transactions and disbursements limits the scope for inappropriate
  transactions;
- the audit committee did not have an independent member with financial
  expertise.
- we had not formalized a code of ethics;
- we had not implemented a whistleblower policy.
- we did not have any personnel with adequate understanding of US and
  Canadian tax;

As at December 31, 2008 we have taken actions that rectify many
of these areas. They are as follows:

- We have appointed an independent director with financial expertise who
  serves on the audit committee
- We have adopted and formalized a code of ethics
- We have documented our corporate governance policies
- We have adopted a whistleblower policy

Our management has worked and will continue to work to
strengthen the Companys internal controls over financial reporting. Except for
the actions described above, there was no change to our internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

ITEM
16A        AUDIT COMMITTEE FINANCIAL
EXPERTS

The audit committee of our board does have an audit committee
financial expert appointed in 2008. We believe that the members of our audit
committee are collectively capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial
reporting.

ITEM 16B        CODE OF
ETHICS

We have formally adopted a written code of ethics.

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ITEM 16C        PRINCIPAL
ACCOUNTANT FEES AND SERVICES

The following table sets forth information regarding the amount
billed to us by our independent auditors, Davidson & Company LLP for our
fiscal year ended December 31, 2008 and 2007.

Years ended December 312008
      2007Audit Fees:
      $40,000
      $53,340Audit Related Fees:
      Nil
      NilTax Fees:
      $5,000
      $9,500All Other Fees:
      Nil
      $30,480Total:
      $45,000
      $93,320


Audit Fees

Audit Fees are the aggregate fees billed by our independent
auditor for the audit of our consolidated annual financial statements, reviews
of interim financial statements and attestation services that are provided in
connection with statutory and regulatory filings or engagements.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit
and permissible non-audit services to be performed by our independent auditors
during the fiscal year.

ITEM 16D       
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E        PURCHASE
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

PART III

ITEM
17           FINANCIAL
STATEMENTS

The following attached financial statements are incorporated
herein:

Consolidated Financial Statements of Lincoln Gold Corporation
for the year ended December 31, 2008, comprised of the following:

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|(a) | Independent Auditors Report of Davidson & Company
      LLP, Chartered Accountants;                                             
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                  
|(b) | Consolidated Balance Sheets as at December 31, 2008 and
      2007;                                                              
|    |                                                                                                                                  
|(c) | Consolidated Statements of Operations, Comprehensive Loss
      and Deficit for the years ended December 31, 2008, 2007 and
2006;
|    |                                                                                                                                  
|(d) | Consolidated Statements of Cash Flows for the years ended
      December 31, 2008, 2007 and 2006;                                
|    |                                                                                                                                  
|(e) | Notes to Consolidated Financial
  Statements.                                                                                    

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ITEM
18           FINANCIAL
STATEMENTS

We have elected to provide financial statements pursuant to
Item 17.

- 86 -

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LINCOLN GOLD CORPORATION(An Exploration Stage
  Company)

CONSOLIDATED FINANCIAL STATEMENTS(Expressed in
  Canadian dollars, unless otherwise stated)

For the fiscal year ended 
  December 31, 2008

---



INDEPENDENT AUDITORS REPORT

To the Shareholders of 
  Lincoln Gold Corporation

We have audited the consolidated balance sheets of Lincoln Gold
  Corporation as at December 31, 2008 and 2007 and the consolidated statements of
  operations, comprehensive loss and deficit, and cash flows for the years ended
  December 31, 2008, 2007 and 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 Canadian generally
  accepted auditing standards and with the standards of the Public Company
  Accounting Oversight Board (United States). Those standards require that we plan
  and perform an audit to obtain reasonable assurance 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.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  December 31, 2008 and 2007 and the results of its operations and cash flows for
  the years ended December 31, 2008, 2007 and 2006 in accordance with Canadian
  generally accepted accounting principles.

|                                    | "DAVIDSON & COMPANY LLP"
|----------------------------------- | ------------------------
|                                    |                         
|Vancouver, Canada                   | Chartered Accountants   
|                                    |                         
|May 15, 2009                        |                         
|(except as to Notes 17 and 18 which |                         
|are as of July 6, 2009)             |                         

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA 
  U.S.
  REPORTING DIFFERENCE

In the United States, reporting standards for auditors require
  the addition of an explanatory paragraph (following the opinion paragraph) to
  identify when there is a restatement that has a material effect on the
  comparability of the Companys financial statements such as the restatement
  described in Note 3(c), or when there is a change in accounting principles that
  has a material effect on the comparability of the Companys financial statements
  such as the changes described in Notes 3(a), (b) and (c), or when the financial
  statements are affected by conditions and events that cast substantial doubt on
  the Company's ability to continue as a going concern, such as those described in
  Note 2 to the financial statements. Our report to the shareholders dated May 15,
  2009 (except as to Notes 17 and 18 which are as of July 6, 2009) is expressed in
  accordance with Canadian reporting standards which do not permit a reference to
  such events and conditions in the auditors' report when these are adequately
  disclosed in the financial statements.

|                                    | "DAVIDSON & COMPANY LLP"
|----------------------------------- | ------------------------
|                                    |                         
|Vancouver, Canada                   | Chartered Accountants   
|                                    |                         
|May 15, 2009                        |                         
|(except as to Notes 17 and 18 which |                         
|are as of July 6, 2009)             |                         



1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre,
  Vancouver, BC, Canada, V7Y 1G6Telephone (604) 687-0947 Fax (604)
    687-6172

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Consolidated Balance Sheets                             
|(Expressed in Canadian dollars, unless otherwise stated)

|                                                       |   |              |   |   |              |  
|------------------------------------------------------ | - | ------------ | - | - | ------------ | -
|                                                       |   | December 31, |   |   | December 31, |  
|                                                       |   | 2008         |   |   | 2007         |  
|                                                       |   |              |   |   | (Restated -  |  
|ASSETS                                                 |   |              |   |   | Note 3)      |  
|                                                       |   |              |   |   |              |  
|Current                                                |   |              |   |   |              |  
|Cash                                                   | $ | 1,553        |   | $ | 123,201      |  
|Receivables                                            |   | 7,943        |   |   | 3,131        |  
|Loan receivable (Note 6(d)(iii))                       |   | -            |   |   | 5,000        |  
|Prepaids and advances                                  |   | 675          |   |   | 107,900      |  
|                                                       |   | 10,171       |   |   | 239,232      |  
|                                                       |   |              |   |   |              |  
|Equipment(Note 5)                                      |   | 11,679       |   |   | 27,602       |  
|Deferred financing costs(Note 17)                      |   | 177,600      |   |   | 19,900       |  
|                                                       |   |              |   |   |              |  
|                                                       | $ | 199,450      |   | $ | 286,734      |  
|                                                       |   |              |   |   |              |  
|LIABILITIES AND SHAREHOLDERS'
      DEFICIENCY         |   |              |   |   |              |  
|                                                       |   |              |   |   |              |  
|Current                                                |   |              |   |   |              |  
|Accounts payable and accrued liabilities               | $ | 728,979      |   | $ | 210,897      |  
|Advance from LPT Capital Ltd.
      (Note 17)          |   | 66,500       |   |   | -            |  
|Loan payable (Note 7a)                                 |   | 59,505       |   |   | -            |  
|Notes payable (Note 7d)                                |   | 1,329,809    |   |   | 100,000      |  
|Convertible loans from related parties (Note
      7c) |   | 343,107      |   |   | -            |  
|                                                       |   | 2,527,900    |   |   | 310,897      |  
|                                                       |   |              |   |   |              |  
|Shareholders' deficiency                               |   |              |   |   |              |  
|Share capital (Note 8)                                 |   |              |   |   |              |  
|Authorized                                             |   |              |   |   |              |  
|Unlimited common shares without par value              |   |              |   |   |              |  
|Issued and outstanding                                 |   |              |   |   |              |  
|55,392,000 (December 31, 2007 - 51,391,666)            |   | 4,276,642    |   |   | 3,702,686    |  
|Share subscriptions received
      in advance (Note 8) |   | -            |   |   | 197,482      |  
|Accumulated other comprehensive income (Note
      3)  |   | (12,990      | ) |   | (12,990      | )
|Contributed surplus (Note 8)                           |   | 1,670,091    |   |   | 1,667,612    |  
|Deficit                                                |   | (8,262,193   | ) |   | (5,578,953   | )
|                                                       |   |              |   |   |              |  
|                                                       |   | (2,328,450   | ) |   | (24,163      | )
|                                                       |   |              |   |   |              |  
|                                                       | $ | 199,450      |   | $ | 286,734      |  

Ability to continue as a going concern (Note 2) 
  Subsequent
  events (Note 17)

On behalf of the Board:

|Paul
      Saxton | Director | Andrew Milligan | Director
|------------------- | -------- | ----------------- | --------
|Paul Saxton         |          | Andrew Milligan   |         

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

2

---

|LINCOLN GOLD CORPORATION                                                   
|---------------------------------------------------------------------------
|(An Exploration Stage Company)                                             
|Consolidated Statements of Operations, Comprehensive
      Loss and Deficit
|(Expressed in Canadian dollars, unless otherwise stated)                   

|                                               |   |            |   |   |             |   |   |             |  
|---------------------------------------------- | - | ---------- | - | - | ----------- | - | - | ----------- | -
|Years Ended
      December 31                  |   | 2008       |   |   | 2007        |   |   | 2006        |  
|                                               |   |            |   |   | (Restated - |   |   | (Restated - |  
|                                               |   |            |   |   | Note 3)     |   |   | Note 3)     |  
|Exploration Expenses(Note 6)                   | $ | 2,025,586  |   | $ | 343,137     |   | $ | 115,764     |  
|                                               |   |            |   |   |             |   |   |             |  
|Administrative Expenses                        |   |            |   |   |             |   |   |             |  
|Administrative support                         |   | 55,655     |   |   | 24,070      |   |   | -           |  
|Amortization                                   |   | 10,066     |   |   | 4,630       |   |   | 3,277       |  
|Consulting fees                                |   | 63,582     |   |   | 32,086      |   |   | 2,602       |  
|Foreign exchange (gain) loss                   |   | (26,477    | ) |   | 4,991       |   |   | 2,318       |  
|Interest expense                               |   | 154,735    |   |   | 12,690      |   |   | 12,132      |  
|Investor relations                             |   | 65,283     |   |   | 162,685     |   |   | 145,899     |  
|Management fees                                |   | 10,488     |   |   | 27,773      |   |   | 71,248      |  
|Office                                         |   | 46,353     |   |   | 34,006      |   |   | 32,786      |  
|Professional fees                              |   | 279,136    |   |   | 204,587     |   |   | 55,510      |  
|Property investigation and due
      diligence |   | 4,116      |   |   | 5,528       |   |   | 4,336       |  
|Regulatory and shareholder services            |   | 31,965     |   |   | 30,111      |   |   | 5,750       |  
|Stock-based compensation (Note
      9)        |   | -          |   |   | 262,480     |   |   | -           |  
|Travel and entertainment                       |   | 9,284      |   |   | 14,742      |   |   | 20,526      |  
|                                               |   |            |   |   |             |   |   |             |  
|Loss before other items                        |   | (2,729,772 | ) |   | (1,163,516  | ) |   | (472,148    | )
|                                               |   |            |   |   |             |   |   |             |  
|Other items                                    |   |            |   |   |             |   |   |             |  
|Interest income                                |   | 674        |   |   | 4,526       |   |   | 2,940       |  
|Loss on disposition of equipment               |   | (809       | ) |   | -           |   |   | -           |  
|Gain on settlement of debt (Note 8)            |   | 46,667     |   |   | -           |   |   | -           |  
|                                               |   |            |   |   |             |   |   |             |  
|Loss and Comprehensive Loss for the
      year |   | (2,683,240 | ) |   | (1,158,990  | ) |   | (469,208    | )
|                                               |   |            |   |   |             |   |   |             |  
|Deficit, beginning of year (as restated)       |   | (5,578,953 | ) |   | (4,419,963  | ) |   | (3,950,755  | )
|                                               |   |            |   |   |             |   |   |             |  
|Deficit, end of year                           | $ | (8,262,193 | ) | $ | (5,578,953  | ) | $ | (4,419,963  | )
|                                               |   |            |   |   |             |   |   |             |  
|                                               |   |            |   |   |             |   |   |             |  
|Basic and diluted
      loss per common share  | $ | (0.05      | ) | $ | (0.02       | ) | $ | (0.01       | )
|                                               |   |            |   |   |             |   |   |             |  
|                                               |   |            |   |   |             |   |   |             |  
|Weighted average shares outstanding            |   | 54,260,915 |   |   | 47,172,000  |   |   | 42,366,000  |  

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

3

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Consolidated Statements of Cash Flows                   
|(Expressed in Canadian dollars, unless otherwise stated)

|                                                           |   |            |   |   |             |   |   |             |  
|---------------------------------------------------------- | - | ---------- | - | - | ----------- | - | - | ----------- | -
|Years Ended
      December 31                              |   | 2008       |   |   | 2007        |   |   | 2,006       |  
|                                                           |   |            |   |   | (Restated - |   |   | (Restated - |  
|                                                           |   |            |   |   | Note 3)     |   |   | Note 3)     |  
|Cash Flows From Operating Activities                       |   |            |   |   |             |   |   |             |  
|Loss for the year                                          | $ | (2,683,240 | ) | $ | (1,158,990  | ) | $ | (469,208    | )
|Items not affecting cash:                                  |   |            |   |   |             |   |   |             |  
|Amortization                                               |   | 10,066     |   |   | 4,630       |   |   | 3,277       |  
|Loss on
      disposition of equipment                     |   | 809        |   |   | -           |   |   | -           |  
|Shares issued for mineral
      property costs             |   | 31,000     |   |   | 16,222      |   |   | 11,279      |  
|Services
      in exchange for share obligation            |   | -          |   |   | -           |   |   | 83,204      |  
|Stock-based compensation                                   |   | -          |   |   | 262,480     |   |   | -           |  
|Non-cash
      interest expense                            |   | 109,985    |   |   | -           |   |   | -           |  
|Warrants issued for
      financing cost                   |   | 2,479      |   |   | -           |   |   | -           |  
|Shares
      issued for financing cost                     |   | 44,750     |   |   | -           |   |   | -           |  
|Gain on settlement of
      debt                           |   | (46,667    | ) |   | -           |   |   | -           |  
|Exploration services for note payable                      |   | 800,000    |   |   | -           |   |   | -           |  
|Unrealized foreign
      exchange                          |   | 46,864     |   |   | -           |   |   | -           |  
|Changes in non-cash working
      capital items            |   |            |   |   |             |   |   |             |  
|Increase in receivables                                    |   | (4,812     | ) |   | (3,131      | ) |   | -           |  
|Decrease
      (increase) in prepaids and advances         |   | 107,225    |   |   | (102,193    | ) |   | 7,471       |  
|Increase in accounts
      payable and accrued liabilities |   | 450,982    |   |   | 155,087     |   |   | 19,339      |  
|Decrease
      (increase) in loan receivable               |   | 5,000      |   |   | (5,000      | ) |   | -           |  
|                                                           |   |            |   |   |             |   |   |             |  
|Net cash used in operating
      activities                |   | (1,125,559 | ) |   | (830,895    | ) |   | (344,638    | )
|                                                           |   |            |   |   |             |   |   |             |  
|Cash Flows From Financing Activities                       |   |            |   |   |             |   |   |             |  
|Shares issued for cash                                     |   | 325,918    |   |   | 812,986     |   |   | 245,054     |  
|Share issue costs                                          |   | (46,127    | ) |   | (47,818     | ) |   | (24,505     | )
|Proceeds from note payable                                 |   | 300,000    |   |   | -           |   |   | -           |  
|Proceeds from convertible
      loans from related parties |   | 315,000    |   |   | -           |   |   | -           |  
|Proceeds from loan and advance                             |   | 127,072    |   |   | -           |   |   | -           |  
|Share subscriptions received
      in advance              |   | -          |   |   | 197,482     |   |   | -           |  
|Deferred financing costs                                   |   | (23,000    | ) |   | (19,900     | ) |   | -           |  
|                                                           |   |            |   |   |             |   |   |             |  
|Net cash provided by financing activities                  |   | 998,863    |   |   | 942,750     |   |   | 220,549     |  
|                                                           |   |            |   |   |             |   |   |             |  
|Cash Flows From Investing Activities                       |   |            |   |   |             |   |   |             |  
|Acquisition of equipment                                   |   | (11,804    | ) |   | (27,685     | ) |   | -           |  
|Proceeds from disposition of equipment                     |   | 16,852     |   |   | -           |   |   | -           |  
|Net cash provided by (used in)
      investing activities  |   | 5,048      |   |   | (27,685     | ) |   | -           |  
|Effect of foreign exchange on cash                         |   | -          |   |   | 13,416      |   |   | (5,148      | )
|Change in cash during the year                             |   | (121,648   | ) |   | 97,586      |   |   | (129,237    | )
|Cash, beginning of year                                    |   | 123,201    |   |   | 25,615      |   |   | 154,852     |  
|Cash, end of year                                          | $ | 1,553      |   | $ | 123,201     |   | $ | 25,615      |  
|                                                           |   |            |   |   |             |   |   |             |  
|Supplementary disclosure with respect to
      cash flows  |   |            |   |   |             |   |   |             |  
|Cash paid for interest                                     | $ | -          |   | $ | -           |   | $ | -           |  
|Cash paid for income taxes                                 | $ | -          |   | $ | -           |   | $ | -           |  

Supplementary cash flow information (Note 15)

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

4

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|1. | NATURE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On November 20, 2007, the Company completed a
      continuation changing its corporate jurisdiction from Nevada to Canada
      under the Canada *Business Corporations Act* (CBCA). Unlike the Nevada
      jurisdiction, the Company chose under the CBCA to not have par value
      shares and, accordingly, prior period share capital amounts have been
      restated to reflect this change. In addition, the Company changed its
    authorized share capital from 100,000,000 shares to unlimited.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is engaged in the acquisition and exploration
      of mineral properties, with the primary aim of developing properties to a
      stage where they can be exploited for a profit. To date, the Company has
      not earned any revenues and is considered to be in the exploration
      stage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On January 15, 2009 the Company and LPT Capital Limited
      (LPT) entered into an arrangement agreement (Note 17) whereby 0843037 BC
      Ltd., a subsidiary of LPT, would acquire 100% of the issued common shares
      of the Company and in return issue to the Companys shareholders
      23,000,000 LPT shares. On February 18, 2009, the Companys shareholders
      approved and completed the continuation of the Company from federal
      jurisdiction to British Columbia and also approved the transaction with
      LPT. On February 20, 2009 the Supreme Court of British Columbia entered
      its final order approving the plan of arrangement. The completion of the
      transaction will occur in conjunction with LPT completing an equity
      financing to raise up to $3,380,000.                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | ABILITY TO CONTINUE AS A GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Companys annual financial statements have been
      prepared in accordance with Canadian generally accepted accounting
      principles (GAAP) applicable to a going concern, which assumes that the
      Company will be able to continue in operation for the foreseeable future
      and will be able to realize its assets and discharge its liabilities in
      the normal course of business. Accordingly, these financial statements do
      not reflect any adjustments in the carrying values of the assets and
      liabilities, the reported expenses, and the balance sheet classifications
      used that would be necessary if the going concern assumption were not
      appropriate. Such adjustments could be material. As at December 31, 2008
      the Company has no source of operating cash flow and has an accumulated
      deficit of approximately $8.3 million. Operations for the year ended
      December 31, 2008 have been funded primarily from debt and the issuances
      of capital stock and net changes in working capital balances. The Company
      has a history of operating losses and has a working capital deficiency of
      $2,517,729 at December 31, 2008 (2007  $71,665).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As discussed in Note 1, the Company is attempting to
      complete the LPT transaction and financing to assist in the operations of
      the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

5

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|3. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------

The Company's significant accounting
  policies are as follows:

Basis of consolidation

These consolidated financial statements
  include the accounts of the Company and its wholly-owned subsidiary, Minera
  Lincoln de Mexico, S.A. de C.V. (Lincoln Mexico), from the date of formation.
  All significant intercompany transactions and balances have been eliminated upon
  consolidation.

Use of estimates

The preparation of financial statements
  in accordance with Canadian GAAP requires management to make estimates and
  assumptions that affect the reported amount of assets and liabilities and
  disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amount of revenues and expenses during the reporting
  period. Significant areas requiring the use of management estimates relate to
  the determination of impairment of assets, stock-based compensation, asset
  retirement obligations, the useful lives estimate and valuation allowances on
  future income tax assets. Actual results could differ from these estimates.

Presentation

Where applicable, comparative figures
  have been reclassified to conform with the presentation used in the current
  year.

Equipment

Equipment is recorded at cost and
  amortization is provided at a straight line bases over the following periods:
  Office Equipment  five years; computer software  two years; computer equipment
   three years; mining equipment  three years and vehicles  three years.

Mineral property interests

The Company charges to operations all
  exploration and development expenses incurred prior to the determination of
  economically recoverable reserves. These costs would also include periodic fees
  such as license and maintenance fees and advance royalty payments.

The Company capitalizes direct mineral
  property acquisition costs and those exploration and development expenditures
  incurred following the determination that the property has economically
  recoverable reserves. Exploration costs include exploration license and
  maintenance fees and advance royalty payments. Mineral property acquisition
  costs include cash consideration and the fair value of common shares and
  warrants issued for mineral property interests, pursuant to the terms of the
  relevant agreement. These costs are amortized over the estimated life of the
  property following commencement of commercial production, or written off if the
  property is sold, allowed to lapse or abandoned, or when impairment in value has
  been determined to have occurred. An exploration property is reviewed for
  impairment whenever events or changes in circumstances indicate that its
  carrying amount may not be recoverable.

Although the Company has taken steps to
  verify the title to mineral properties in which it has an interest, in
  accordance with industry practice for the current stage of exploration of such
  properties, these

6

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

procedures do not guarantee the
  Companys title. Property title may be subject to unregistered prior agreements
  or transfers and title may be affected by undetected defects.

7

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|-- | --------------------------------------------------

Asset retirement obligations

The Company recognizes the fair value
  of a liability for an asset retirement obligation in the year in which it is
  incurred when a reasonable estimate of fair value can be made. The carrying
  amount of the related long-lived asset is increased by the same amount as the
  liability.

Changes in the liability for an asset
  retirement obligation due to the passage of time will be measured by applying an
  interest method of allocation. The amount will be recognized as an increase in
  the liability and an accretion expense in the statement of operations. Changes
  resulting from revisions to the timing or the amount of the original estimate of
  undiscounted cash flows are recognized as an increase or a decrease to the
  carrying amount of the liability and the related long-lived asset.

The Company does not have any asset
  retirement obligations.

Loss per share

The Company uses the treasury stock
  method to compute the dilutive effect of options, warrants and similar
  instruments. Under this method the dilutive effect on earnings per share is
  recognized on the use of the proceeds that could be obtained upon exercise of
  options, warrants and similar instruments. It assumes that the proceeds would be
  used to purchase common shares at the average market price during the period.
  For the years presented, this calculation proved to be anti-dilutive.

Loss per share is calculated using the
  weighted average number of common shares outstanding during the year.

Financial instruments  recognition
  and measurement

The Company classifies all financial
  instruments as either held for trading, available for sale, held to maturity,
  loans and receivables or other financial liabilities. Financial instruments are
  required to be measured at fair value on initial recognition. Measurement in
  subsequent periods depends on the financial instruments classification. Held for
  trading instruments are measured at fair value with unrealized gains and losses
  recognized in results of operations. Available for sale instruments are measured
  at fair value with unrealized gains and losses recognized in other comprehensive
  income. Instruments held to maturity, loans and receivables and other financial
  liabilities are measured at amortized cost.

The Company classifies its cash as held
  for trading and receivables as loans and receivables. Accounts payable and
  accrued liabilities as well as advances, notes and loans payable are classified
  as other financial liabilities.

Transaction costs relating to the
  issuance of debt instruments are deducted from the related financial liability
  and amortized using the effective interest method over the term of the
  liability.

Comprehensive income

Comprehensive income is defined as the
  change in equity (net assets) from transactions and other events from non-owner
  sources. Other comprehensive income is defines as revenues, expenses, gains and
  losses that, in accordance with primary sources of GAAP, are recognized in
  comprehensive income, but excluded from net income. This would include holding
  gains and losses from financial instruments classified as available for
  sale.

8

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The fair value of stock options granted is determined
      using the Black-Scholes option pricing model and recorded as stock-based
      compensation over the vesting period of the stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Future income taxes are recorded using the asset and
      liability method, whereby future tax assets and liabilities are recognized
      for the future tax consequences attributable to differences between the
      financial statement carrying amounts of existing assets and liabilities
      and their respective tax bases. Future tax assets and liabilities are
      measured using the enacted or substantively enacted tax rates expected to
      apply when the asset is realized or the liability settled. The effect on
      future tax assets and liabilities of a change in tax rates is recognized
      in income in the period that substantive enactment or enactment occurs. To
      the extent that the Company does not consider it more likely than not that
      a future tax asset will be recovered, it provides a valuation allowance
      against the excess.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Costs directly identifiable with the raising of capital
      will be charged against the related capital stock. Costs related to shares
      not yet issued are recorded as deferred financing costs. These costs will
      be deferred until the issuance of the shares to which the costs relate, at
      which time the costs will be charged against the related capital stock or
      charged to operations if the shares are not issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Adoption of new accounting policies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company adopted the following new accounting policies
      effective January 1, 2008:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|(a) | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The AcSB issued CICA Handbook Section 3862, Financial
      Instruments - Disclosures, which requires an increased emphasis on
      disclosing the nature and the extent of risk arising from financial
      statements and how the entity manages those risks. This section, together
      with Section 3863, Financial Instruments  Presentation, replaced
      Section 3861, Financial Instruments  Disclosure and
        Presentation. Section 3863, Financial Instruments - Presentationestablishes standards for presentation of financial instruments and
      non-financial derivatives. Other than the additional disclosure in Note
      14, the adoption of these Sections has had no significant impact on the
      Companys financial statements.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(b) | Capital disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The AcSB issued CICA Handbook Section 1535, Capital
      Disclosures, which establishes standards for the disclosure of (i) an
      entitys objectives, policies and processes for managing capital; (ii)
      quantitative data about what the entity regards as capital; (iii) whether
      the entity has complied with any capital requirements; and (iv) if it has
      not complied, the consequences of such non-compliance. Other than the
      additional disclosure in Note 13 the adoption of this section has had no
      significant impact on the Companys financial
      statements.                                                                                                                                                                

9

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|-- | --------------------------------------------------

|(c) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Effective January 1, 2008, the Company adopted the
      Canadian (CA) dollar as its functional and reporting currency, as a
      significant portion of its expenses, assets, liabilities and financing are
      denominated in CA dollars. All currency figures reported in these
      consolidated statements are reported in CA dollars, unless otherwise
      specified. Prior to January 1, 2008, the Company reported its annual and
      quarterly consolidated balance sheets and the related consolidated
      statements of operations and cash flows in the United States (US) dollar
      which was also the Companys functional currency at that time. The related
      financial statements and corresponding notes prior to January 1, 2008 have
      been restated to CA dollars for comparison to the 2008 financial results.
      Using the current rate method the result of this change was an opening
      adjustment to accumulated other comprehensive loss of $12,990. There were
      no significant exchange gains or losses related to this method to be
      recorded as accumulated other comprehensive income. Accordingly, there are
      no material differences between loss and comprehensive loss for the years
      presented.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Monetary assets and liabilities denominated in currencies
      other than CA dollar are translated at exchange rates in effect at the
      balance sheet dates. Non-monetary balance sheet items denominated in
      currencies other than CA dollar are translated at the rates of exchange in
      effect at the time the items arose. Revenue and expenses are translated at
      the exchange rates in effect at the time of the transaction. Gains and
      losses arising from fluctuations in exchange rates are included in
      operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|4. | RECENT ACCOUNTING PRONOUNCEMENTS
|-- | --------------------------------

|(a) | Goodwill and intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company will adopt the new standard CICA Handbook
      Section 3064, Goodwill and Intangible Assets(Section 3064) for its
      fiscal year beginning January 1, 2009. This Section replaces Section
      3062,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Goodwill and Other Intangible Assets,and Section
      3450, Research and Development Costs. The new Section establishes
      standards for the recognition, measurement, presentation and disclosure of
      goodwill subsequent to its initial recognition and of intangible assets by
      profit-oriented enterprises. Standards concerning goodwill are unchanged
      from the standards included in Section 3062. The Company is currently
      evaluating the impact of the adoption of this new Section on its
      consolidated financial statements.                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(b) | Business combinations, non-controlling interest and
      consolidated financial statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In January 2009, the CICA issued Handbook Section 1582, Business Combinations, 1601, Consolidated Financial Statementsand 1602, Non-controlling Interests which replace CICA Handbook
      Sections 1581,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Business Combinationsand 1600, Consolidated
      Financial Statements. Section 1582 establishes standards for the
      accounting for business combinations that is equivalent to the business
      combination standard under IFRS. Section 1582 is applicable for the
      Companys business combinations with acquisition dates on or after January
      1, 2011. Section 1601 together with Section 1602 establishes standards for
      the preparation of consolidated financial statements. Section 1601 is
      applicable for the Companys interim and annual consolidated financial
      statements for its fiscal year beginning January 1, 2011. Early adoption
      of this Section is permitted and all three Sections must be adopted
      concurrently.

10

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|4. | RECENT ACCOUNTING PRONOUNCEMENTS
      (continued)
|-- | ---------------------------------------------------

|(c) | International financial reporting standards
      (IFRS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In addition to the above new accounting pronouncements
      the Canadian Accounting Standards Board ("AcSB") in 2006 published a new
      strategic plan that will significantly affect financial reporting
      requirements for Canadian companies. The AcSB strategic plan outlines the
      convergence of Canadian GAAP with International Financial Reporting
      Standards (IFRS) over a five-year transitional period. In February 2008
      the AcSB announced that 2011 is the changeover date for
      publicly-accountable enterprises to use IFRS, replacing Canada's own GAAP.
      The date is for interim and annual financial statements relating to fiscal
      years beginning on or after January 1, 2011. The transition date of
      January 1, 2011 will require the restatement for comparative purposes of
      amounts reported by the Company for the year ended December 31, 2010.
      While the Company has begun assessing the adoption of IFRS for 2011, the
      financial reporting impact of the transition to IFRS cannot be reasonably
      estimated at this time.

|5. | EQUIPMENT
|-- | ---------

December 31, 2008
      
      
      December 31, 2007Accumulated
      
      
      Net
      
      
      
      
      
      Accumulated
      
      
      NetCost
      
      
      Amortization
      
      
      Book Value
      
      
      Cost
      
      
      Amortization
      
      
      Book ValueComputer equipment
      $
      7,610
      
      $
      5,816
      
      $
      1,794
      
      $
      7,610
      
      $
      4,181
      
      $
      3,429Computer software
      
      1,345
      
      
      1,345
      
      
      -
      
      
      1,345
      
      
      1,345
      
      
      -Mining equipment
      
      11,804
      
      
      3,431
      
      
      8,373
      
      
      -
      
      
      -
      
      
      -Office equipment
      
      4,225
      
      
      2,713
      
      
      1,512
      
      
      4,225
      
      
      1,868
      
      
      2,357Vehicle
      
      -
      
      
      -
      
      
      -
      
      
      23,597
      
      
      1,781
      
      
      21,816$
      24,984
      
      $
      13,305
      
      $
      11,679
      
      $
      36,777
      
      $
      9,175
      
      $
      27,602


11

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|6. | MINERAL PROPERTY INTERESTS
|-- | --------------------------

The Companys mineral property
  interests are comprised of properties located in the United States and in
  Mexico.

During the year ended December 31,
  2008, the Company incurred exploration expenditures as follows:

| |                                           |   |               |   |   |        |   |   |                  |  |   |               | 
| | ----------------------------------------- | - | ------------- | - | - | ------ | - | - | ---------------- |  | - | ------------- | 
| |                                           |   | United States |   |   | Mexico |  
| |                                           |   | Hannah        |   |   | JDS    |   |   | Pine
      Grove |  |   | La
      Bufa | 
| | Exploration and related expenditures      |   |               |   |   |        |   |   |                  |  |   |               | 
| | Option, lease and advance                 |   |               |   |   |        |   |   |                  |  |   |               | 
| | royalty payments                          | $ | 11,030        |   | $ | -      |   | $ | 58,250           |  | $ | 31,000        | 
| | Geochemistry                              |   | -             |   |   | -      |   |   | -                |  |   | 476           | 
| | Contractors                               |   | 1,047         |   |   | 996    |   |   | 64,479           |  |   | 92,223        | 
| | Drilling and metallurgical                |   | -             |   |   | -      |   |   | 269,895          |  |   | 1,259,242     | 
| | General administration                    |   | -             |   |   | -      |   |   | 8,660            |  |   | 35,867        | 
| | Geologic mapping and imagery              |   | -             |   |   | -      |   |   | 409              |  |   | 236           | 
| | Maintenance                               |   | 3,370         |   |   | (1,080 | ) |   | 67,898           |  |   | 5,975         | 
| | Field supplies                            |   | -             |   |   | -      |   |   | 2,220            |  |   | 12,903        | 
| | Resource estimation                       |   | -             |   |   | -      |   |   | 26,439           |  |   | -             | 
| | Reclamation                               |   | (1,383        | ) |   | -      |   |   | -                |  |   | -             | 
| | Shipping                                  |   | -             |   |   | -      |   |   | -                |  |   | 401           | 
| | Travel and accommodation                  |   | 263           |   |   | 104    |   |   | 11,083           |  |   | 63,583        | 
| |                                           |   |               |   |   |        |   |   |                  |  |   |               | 
| | Total mineral
      property expenditures | $ | 14,327        |   | $ | 20     |   | $ | 509,333          |  | $ | 1,501,906     | 

During the year ended December 31,
  2007, the Company incurred exploration expenditures as follows:

| |                                           |   |               |  |   |        |  |   |                  |  |   |            |  |   |               | 
| | ----------------------------------------- | - | ------------- |  | - | ------ |  | - | ---------------- |  | - | ---------- |  | - | ------------- | 
| |                                           |   | United States |  |   | Mexico | 
| |                                           |   | Hannah        |  |   | JDS    |  |   | Jenny
      Hill |  |   | Pine Grove |  |   | La
      Bufa | 
| | Exploration and related expenditures      |   |               |  |   |        |  |   |                  |  |   |            |  |   |               | 
| | Option, lease and advance                 |   |               |  |   |        |  |   |                  |  |   |            |  |   |               | 
| | royalty payments                          | $ | 16,116        |  | $ | -      |  | $ | -                |  | $ | 34,381     |  | $ | 15,310        | 
| | Geochemistry                              |   | -             |  |   | -      |  |   | -                |  |   | -          |  |   | 8,632         | 
| | Contractors                               |   | 4,969         |  |   | 144    |  |   | 430              |  |   | 9,499      |  |   | 66,537        | 
| | General administration                    |   | 35            |  |   | -      |  |   | 13               |  |   | 6,926      |  |   | 29,054        | 
| | Geologic mapping and imagery              |   | -             |  |   | -      |  |   | -                |  |   | 50         |  |   | 21,660        | 
| | Maintenance                               |   | 3,304         |  |   | -      |  |   | -                |  |   | 47,853     |  |   | 15,160        | 
| | Field supplies                            |   | -             |  |   | -      |  |   | -                |  |   | 34         |  |   | 434           | 
| | Resource estimation                       |   | -             |  |   | -      |  |   | -                |  |   | 53,800     |  |   | -             | 
| | Shipping                                  |   | -             |  |   | -      |  |   | -                |  |   | 38         |  |   | -             | 
| | Travel and accommodation                  |   | 117           |  |   | -      |  |   | 159              |  |   | 1,564      |  |   | 6,918         | 
| |                                           |   |               |  |   |        |  |   |                  |  |   |            |  |   |               | 
| | Total mineral
      property expenditures | $ | 24,541        |  | $ | 144    |  | $ | 602              |  | $ | 154,145    |  | $ | 163,705       | 

12

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|6. | MINERAL PROPERTY INTERESTS (continued)
|-- | ---------------------------------------

During the year ended December 31,
  2006, the Company incurred exploration expenditures as follows:

| |                                      |   |              |  |   |        |  |   |                  |  |   |         |  |   |               | 
| | ------------------------------------ | - | ------------ |  | - | ------ |  | - | ---------------- |  | - | ------- |  | - | ------------- | 
| |                                      |   | United Sates |  |   | Mexico | 
| |                                      |   | Hannah       |  |   | JDS    |  |   | Pine
      Grove |  |   | General |  |   | La
      Bufa | 
| |                                      |   |              |  |   |        |  |   |                  |  |   |         |  |   |               | 
| | Exploration and related expenditures |   |              |  |   |        |  |   |                  |  |   |         |  |   |               | 
| | Option, lease and advance            |   |              |  |   |        |  |   |                  |  |   |         |  |   |               | 
| | royalty payments                     | $ | -            |  | $ | -      |  | $ | -                |  | $ | -       |  | $ | 22,238        | 
| | Geochemistry                         |   | -            |  |   | 4,953  |  |   | -                |  |   | -       |  |   | 31,595        | 
| | Contractors                          |   | 2,562        |  |   | 558    |  |   | 2,496            |  |   | 292     |  |   | 12,729        | 
| | General administration               |   | 36           |  |   | 47     |  |   | 58               |  |   | 73      |  |   | 140           | 
| | Geophysics                           |   | 1,135        |  |   | -      |  |   | -                |  |   | -       |  |   | -             | 
| | Maintenance                          |   | 14,838       |  |   | -      |  |   | -                |  |   | -       |  |   | 2,621         | 
| | Field supplies                       |   | 6            |  |   | -      |  |   | -                |  |   | -       |  |   | -             | 
| | Imagery                              |   | -            |  |   | -      |  |   | -                |  |   | -       |  |   | 17,484        | 
| | Travel and accommodation             |   | 474          |  |   | -      |  |   | 389              |  |   | -       |  |   | 1,040         | 
| |                                      |   |              |  |   |        |  |   |                  |  |   |         |  |   |               | 
| | Total mineral property expenditures  | $ | 19,051       |  | $ | 5,558  |  | $ | 2,943            |  | $ | 365     |  | $ | 87,847        | 

United States

| | (a) | Hannah Property
| | --- | ---------------

In December 2003, the Company entered
  into an option agreement to acquire a 100% interest in certain unpatented lode
  claims situated in Churchill County, Nevada, USA. The option agreement called
  for net smelter royalties of 1% to 4% upon production. Pursuant to the option
  agreement, the Company is required to make option payments totaling US$210,000
  as follows:

| |                                                                                                                                                                                      | US$5,000 upon signing the agreement (paid);
      US$5,000 on January 10, 2005 (paid);
      US$10,000 on January 10, 2006 (paid);
      US$15,000 on January 10, 2007 (paid; see below);
      US$25,000 on January 10thof each year from 2008 to 2012 (see
        below) and;
      US$50,000 on January 10, 2013.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In January 2007 the Company amended the
      Hannah agreement whereby the US$15,000 due on January 10, 2007 would be paid in
      equal quarterly installments of US$3,750 (paid).

In January 2008 the Company amended the
  Hannah agreement whereby the US$25,000 due on January 10, 2008 would be lowered
  to US$20,000 and be paid in equal quarterly installments throughout 2008. At
  December 31, 2008 US$10,000 was paid and the remaining US$10,000 paid subsequent
  to year-end.

13

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|6. | MINERAL PROPERTY INTERESTS (continued)
|-- | ---------------------------------------

| | (b) | Hannah Property (continued)
| | --- | ----------------------------

In February 2009 the Company amended
  the Hannah agreement whereby the US$25,000 due on January 10, 2009 would be
  lowered to US$16,000 and be paid US$1,000 on January 10, 2009 (paid), US$5,000
  on April 10, 2009 (paid), US$5,000 on July 10, 2009 and US$5,000 on October 10,
  2009. The last payment of US$50,000 due on January 10, 2013 will be increased by
  an amount such that the total payments made by the Company will total
  US$210,000.

In February 2009, the Company then
  entered into an option agreement with Enexco International Inc. (Enexco),
  whereby Enexco can earn a 60% interest in the Hannah property by completing the
  following within a year:

| |                                                                                                                                       | Pay the Company US$15,000 (received) upon signing the agreement
      Pay the underlying option payments, not to exceed US$25,000 for the year
      Make necessary claim maintenance fees and certain drilling requirements
| | ------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If Enexco completes all the above
      items, they will have exercised their option and earned a 60% interest in the
      property.

| | (c) | JDS Property
| | --- | ------------

In fiscal 2004, the Company acquired,
  by staking, a 100% interest in certain mineral claims in Eureka County, Nevada,
  USA.

In August 2008 the Company entered into
  an agreement with Carlin Gold US Inc. (Carlin) whereby they sold the property
  to Carlin in return for a 2% net smelter royalty. Carlin has the option to
  purchase 1% of the royalty for US$500,000 for each 1⁄2 of 1% of the net smelter
  return.

| | (d) | Jenny Hill Property
| | --- | -------------------

In September 2004, the Company entered
  into a mining lease and option to purchase agreement comprising certain mineral
  claims situated in Mineral and Nye Counties, Nevada for a term of seven years.
  The agreement called for the Company to make option payments $1,500,000 ($45,000
  paid) over a seven year period and 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 was completed. The agreement was subject to a net
  smelter return of 2%.

During fiscal 2007, the Company decided
  not to pursue exploration on this property and terminated the option
  agreement.

| | (e) | Pine Grove Property
| | --- | -------------------

During fiscal 2007 the Company entered
  into three separate agreements with Wheeler Mining Company (Wheeler), Lyon
  Grove, LLC (Lyon Grove) and Harold Votipka (Votipka) which collectively
  comprise the Pine Grove Property.

| | i) | In July 2007 the Company entered into an agreement with
      Wheeler to lease Wheelers 100% owned mining claims in Lyon County, Nevada
      from July 13, 2007 to December 31, 2022 with an exclusive option to renew
      the lease by written notice to December 31, 2023. If the property is and
      remains in commercial production by November 1 of each year after 2022,
      the Company may renew the lease for a period of one year by delivering
      written notice to the owner prior to November 15 of that
      year.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|6. | MINERAL PROPERTY INTERESTS (continued)
|-- | ---------------------------------------

| | **(d)** | Pine Grove Property (continued)
| | ------- | --------------------------------

The Company must produce a bankable
  feasibility study on the properties by July 1, 2009 (extended to December 31,
  2010) and obtain all necessary funding to place the properties into commercial
  production. The Company must pay a net smelter royalty of 3% - 7% upon
  commencement of commercial mining production based on gold prices and the
  Company must pay a 5% net smelter royalty on metals or minerals other than gold
  produced and sold from the properties.

The following non-refundable advance
  net smelter royalty payments must be made by the Company:

| |  | US$10,000 upon signing the agreement (paid); and
      US$30,000 prior to each one year anniversary of the lease (paid November
        2008).
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------
| | 

| | ii)  | In July 2007 the Company entered into an agreement with
      Votipka to acquire three claims located within the Pine Grove Mining
      District in Lyon County, Nevada in return for a payment of US$12,000 (paid
      in 2007). Upon commencement of commercial production, the Company will pay
      a 5% net smelter royalty to Votipka.                                                                                                                                         
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | iii) | In August 2007 the Company entered into an agreement with
      Lyon Grove to lease the Wilson Mining Claim Group located in Lyon County,
      Nevada from August 1, 2007 to July 31, 2022, with an option to purchase.
      The Company can extend the term of the lease for up to ten additional one
      year terms providing the Company is conducting exploration mining
      activities at the expiration of the term immediately preceding the
      proposed extension term.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The following lease payments must be made by the
      Company:                                                                                                                                                                                                                                                                                                                                                                                                                         

| |  | US$10,000 upon signing the agreement (paid) and
      US$25,000 prior to each one year anniversary of the lease (paid November
        2008).                                                      
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Company advanced US$5,000 bearing
      an interest rate of 5% per annum to be repaid by July 31, 2008. The loan and
      interest was offset against the lease payment due on August 1, 2008.

The lease payment made for any one
  calendar year may be credited against any net smelter royalty due and payable
  during the same calendar year.

The following work commitments must be
  made by the Company:

| |                                                                                                                   | US$25,000 by August 1, 2008; (incurred)
      US$25,000 by August 1, 2009;
      US$50,000 by August 1, 2010;
      US$50,000 by August 1, 2011
      US$25,000 by August 1, 2012 and each subsequent lease year
| | ----------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Upon commencement of production the
      Company must pay a net smelter royalty of 3% - 7% based on gold prices.

Lyon Grove retains the right to require
  the Company to purchase the property any time after the Company has made
  application to permit and develop a mine on the property, subject to the
  Companys continued obligation to pay the royalties, for US$1,000.

Pursuant to a loan agreement (Note 7a),
  the Company has pledged certain Pine Grove properties as collateral for a loan
  that is currently in default.

15

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|6. | MINERAL PROPERTY INTERESTS (continued)
|-- | ---------------------------------------

Mexico

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 US$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 value of US$10,000 on March 15, 2006).
  The Company issued 60,000 shares, valued at US$9,600 on April 16, 2007.

On April 12, 2007, the Company entered
  into an option agreement with Almaden to acquire a 60% interest in the La Bufa
  property located in Chihuahua, Mexico. This agreement replaces the prior Letter
  of Intent. The agreement calls for the Company to undertake a work program on
  the property aggregating US$3,500,000 and issuing an aggregate of 1,550,000
  shares as follows:

Work Program:•
      By April 12, 2008
      US$ 500,000 (incurred)•
      By April 12, 2009
      US$ 750,000 (incurred)•
      By April 12, 2010
      US$1,000,000•
      By April 12, 2011
      US$1,250,000Share issuances:•
      By April 19, 2007
      150,000 shares (issued April
        16, 2007)•
      By April 12, 2008
      200,000 shares (issued April 8, 2008)•
      By April 12, 2009
      200,000 shares (issued May 4,
        2009)•
      By April 12, 2011
      1,000,000 shares


|7. | NOTES PAYABLE
|-- | -------------

| | a) | Loan payable
| | -- | ------------

In November 2008, the Company received
  loan proceeds of US$50,000 bearing an interest rate of 10% per annum, calculated
  and compounded monthly and must be repaid on the earlier of the closing of a
  financing, or the closing of the LPT transaction (Note 1), or April 15, 2009.
  The Company is currently in default on this loan. The Company pledged certain of
  the Pine Grove mineral property claims as collateral. The Company issued 100,000
  common shares pursuant to this agreement as a financing cost, valued at $2,000.
  These shares must be equal to post consolidated shares after the LPT transaction
  so additional shares will need to be issued.

| | b) | Convertible loan
| | -- | ----------------

On March 3, 2008, the Company borrowed
  convertible loan proceeds of $75,000. The Company also entered into a general
  security agreement (GSA) whereby the loan is secured by way of general charge
  over the Companys assets. The Company agreed to repay the principal and
  interest upon completing a financing of more than $500,000.

16

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|7. | NOTES PAYABLE (continued)
|-- | --------------------------

The principal amount bears interest at
  8% per annum, compounded weekly for the first two weeks, and thereafter at the
  rate of 24% per annum compounded weekly, payable following the repayment of the
  principal. At any time that the principal and interest shall remain outstanding,
  the lender has the right to convert such principal and interest to shares of
  common stock of the Company at a rate of $0.20 per share. The Company issued
  37,500 share purchase warrants in relation to this convertible loan, with each
  warrant entitling the lender to purchase one common share of the Company at
  $0.25 per share for a period of two years. The fair value of the warrants was
  estimated to be $2,479 and has been treated as a transaction cost.

The fair value of the warrants of
  $2,479 was estimated using the Black Scholes option pricing model with the
  following assumptions: i) expected volatility of 93.5%; risk free interest rate
  of 2.6%; iii) expected weighted average life of 6 months; and iv) no dividend
  yield. The Company determined that the equity component of the convertible loan
  was not significant.

On December 18, 2008 a director of the
  Company paid out the convertible loan indebtedness of $75,000 plus accrued
  interest of $20,047 totalling $95,047 in return for the assignment of that debt.
  As part of such payout the third partys general security agreement over the
  Companys assets was discharged. The $95,047 debt is unsecured and accrues
  interest at a rate of 5% per annum. This amount is included in the convertible
  loans from related parties on the balance sheet.

c)Convertible loans from related parties

During the year ended December 31,
  2008, the Company received convertible loan proceeds of $181,000 from the CEO.
  The principal amount bears interest at 5% per annum, and has no specific term of
  repayment. At any time that the principal and interest shall remain outstanding,
  the lender has the right to convert such principal and interest to shares of
  common stock of the Company at a rate equal to the average trading price of the
  stock over the last five days prior to conversion. The Company determined that
  the equity component of the convertible loan was not significant.

The Company signed an agreement whereby
  the $181,000 loan would be settled as $10,000 cash and the issuance of 3,420,000
  shares of the Company contingent on the completion of the transaction with LPT
  but no later than June 30, 2009 (see Note 17).

During the year ended December 31,
  2008, the Company received further convertible loan proceeds of $154,047 from a
  director of the Company of which $95,047 relates to the assumption of
  convertible loan indebtedness noted above in 7b). The principal amount of
  $25,000 bears interest at 5% per annum until December 31, 2008, and at 10% per
  annum subsequent to December 31, 2008. The remaining principal amount of
  $129,047 bears interest at 5% per annum until December 31, 2009, and at 10% per
  annum subsequent to December 31, 2009. At any time that the principal and
  interest shall remain outstanding, the lender has the right to convert such
  principal and interest to shares of common stock of the Company at a rate equal
  to the average trading price of the stock over the last five days prior to
  conversion. The Company determined that the equity component of the convertible
  loan was not significant

The Company signed an agreement whereby
  $59,000 of the loan would be settled with the issuance of 1,180,000 shares of
  the Company contingent on the completion of the transaction with LPT but no
  later than June 30, 2009 (see Note 17).

17

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|7. | NOTES PAYABLE (continued)
|-- | --------------------------

| | d) | Notes payable
| | -- | -------------

On January 28, 2004, the Company issued
  a US$200,000 convertible note. The note carried an interest rate of 10%
  compounded monthly and was due on January 28, 2006.

On September 15, 2005 the Company
  completed an agreement whereby the Company repaid US$100,000 of the convertible
  note along with US$35,000 accrued interest and agreed to repay the remaining
  US$100,000 within sixty days. With the completion of the first payment the
  conversion feature was cancelled. The note is currently in default and $46,034
  of accrued interest is included in the note payable.

The Company signed an agreement whereby
  the US$100,000 loan would be settled for a cash payment of US$50,000 and the
  issuance of 1,000,000 shares of the Company contingent on the completion of the
  transaction with LPT but no later than June 30, 2009 (see Note 17).

On June 16, 2008 the Company issued a
  promissory note in return for $300,000. The note bears interest at a rate of 10%
  per year. The principal and interest are payable at the earliest of June 16,
  2009 or when the Company completes a financing of $1,500,000 or greater. In
  consideration for this loan the Company agreed to issue 450,000 shares to the
  lender. These shares were issued and were valued at $42,750.

The Company signed an agreement whereby
  the $300,000 loan would be settled for the issuance of 6,000,000 shares of the
  Company contingent on the completion of the transaction with LPT but no later
  than June 30, 2009 (see Note 17).

On August 20, 2008, the Company issued
  a promissory note in the amount of $800,000 in return for drilling services
  accrued in accounts payable. The note is due on demand, any time after February
  15, 2009, and accrues interest at 1.5% per month. After demand, the note shall
  accrue interest at a rate of 2% per month.

The Company signed an agreement whereby
  the $800,000 loan would be settled for the cash payment of $500,000 and the
  issuance of 6,000,000 shares of the Company contingent on the completion of the
  transaction with LPT by February 28, 2009 but no later than June 30, 2009 (see
  Note 17).

18

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|8. | SHARE CAPITAL AND CONTRIBUTED SURPLUS
|-- | -------------------------------------

| |                                                       |  |                 |  |   |           |   |   |             | 
| | ----------------------------------------------------- |  | --------------- |  | - | --------- | - | - | ----------- | 
| |                                                       |  | Number          |  |   | Share     |   |   | Contributed | 
| |                                                       |  | of
      Shares |  |   | Capital   |   |   | Surplus     | 
| |                                                       |  |                 |  |   |           |   |   |             | 
| | Balance, December 31, 2005                            |  | 41,865,000      |  | $ | 2,593,106 |   | $ | 1,405,132   | 
| | Shares issued for mineral
      property              |  | 50,000          |  |   | 11,279    |   |   | -           | 
| | Private
      placement                               |  | 1,075,000       |  |   | 245,054   |   |   | -           | 
| | Share issue costs                                     |  | -               |  |   | (24,505   | ) |   | -           | 
| |                                                       |  |                 |  |   |           |   |   |             | 
| | Balance, December 31, 2006                            |  | 42,990,000      |  |   | 2,824,934 |   |   | 1,405,132   | 
| | Shares
      issued for obligation                    |  | 666,666         |  |   | 85,434    |   |   | -           | 
| | Shares issued for mineral
      property              |  | 210,000         |  |   | 27,150    |   |   | -           | 
| | Private
      placement                               |  | 7,525,000       |  |   | 812,986   |   |   | -           | 
| | Share issue costs                                     |  | -               |  |   | (47,818   | ) |   | -           | 
| | Stock-based compensation                              |  | -               |  |   | -         |   |   | 262,480     | 
| |                                                       |  |                 |  |   |           |   |   |             | 
| | Balance, December 31, 2007                            |  | 51,391,666      |  |   | 3,702,686 |   |   | 1,667,612   | 
| | Warrants issued for
      financing costs             |  | -               |  |   | -         |   |   | 2,479       | 
| | Private
      placement                               |  | 2,067,000       |  |   | 413,400   |   |   | -           | 
| | Share issue costs                                     |  | -               |  |   | (35,375   | ) |   | -           | 
| | Shares
      issued for mineral property expenditures |  | 200,000         |  |   | 31,000    |   |   | -           | 
| | Private placements                                    |  | 600,000         |  |   | 110,000   |   |   | -           | 
| | Share
      issue costs                               |  | -               |  |   | (30,652   | ) |   | -           | 
| | Shares issued for
      financing cost                |  | 550,000         |  |   | 44,750    |   |   | -           | 
| | Shares
      issued for debt settlement               |  | 583,334         |  |   | 40,833    |   |   | -           | 
| |                                                       |  |                 |  |   |           |   |   |             | 
| | Balance, December 31, 2008                            |  | 55,392,000      |  | $ | 4,276,642 |   | $ | 1,670,091   | 

Share issuances

In December 2008, in consideration for
  a loan of US$50,000, the Company issued to the lender 100,000 shares at a value
  of $2,000.

In August 2008, the Company issued
  583,334 shares at a value of $40,833 to settle a US$87,500 liability owing to a
  former consultant of the Company resulting in a gain of $46,667.

In June 2008 the Company issued a
  promissory note in the amount of $300,000. In consideration for this loan, the
  Company issued 450,000 shares valued at $42,750 to the lender.

In May 2008, the Company completed a
  private placement of 200,000 units at a price of $0.15 per unit for proceeds of
  $30,000. Each unit consisted of one common share and one-half share purchase
  warrant, where each whole warrant entitles the holder to purchase one additional
  common share at a price of $0.20 for a period of two years.

In May 2008, the Company completed a
  private placement of 400,000 units at a price of $0.20 per unit for proceeds of
  $80,000. Each unit consisted of one common share and one-half share purchase
  warrant, where each whole warrant entitles the holder to purchase one additional
  common share at a price of $0.25 for a period of two years. The Company paid
  finders fees of $30,563 in relation to these two private placements in May
  2008.

19

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|8. | SHARE CAPITAL AND CONTRIBUTED SURPLUS
      (continued)
|-- | --------------------------------------------------------

In January 2008, the Company completed
  a private placement of 2,067,000 units at a price of $0.20 per unit for proceeds
  of $413,400. Each unit consisted of one common share and one-half share purchase
  warrant, where each whole warrant entitles the holder to purchase one additional
  common share at a price of $0.25 for a period of two years. The Company paid
  finders fees of $35,375 in relation to this private placement. As at December
  31, 2007, the Company had received $197,482 of subscriptions towards this
  private placement and incurred $19,900 of deferred financing fees.

In August, 2007 the Company completed a
  private placement and issued 4,250,000 units at US$0.10 per unit for gross
  proceeds of US$425,000. Each unit consisted of one common share and one share
  purchase warrant with each warrant exercisable to acquire one common share at
  US$0.15 per share for a term of two years. The Company incurred share issuance
  costs of US$15,000 in connection with this private placement

In May 2007 the Company completed a
  private placement and issued 3,275,000 units at US$0.10 per unit for proceeds of
  US$327,500. Each unit consisted of one common share and one share purchase
  warrant with each warrant exercisable to acquire one common share at US$0.15 per
  share for a term of two years. The Company incurred share issuance costs of
  US$19,425 in connection with this private placement.

In April, 2007 the Company issued
  210,000 shares of common stock at a value of US$23,850 pursuant to a mineral
  option agreement of which 60,000 shares with a value of US$9,600 relate to a
  mineral property payable recorded at December 31, 2006.

In February 2007, the Company issued
  666,666 shares to settle a share issuance obligation.

In July 2006, the Company completed the
  first tranche of a private placement and issued 1,075,000 units at US$0.20 per
  unit for net cash proceeds of US$193,500, net of share issuance costs of
  US$21,500. Each unit consists of one common share and one-half of one Series A
  warrant and one whole Series B warrant. Each whole Series A warrant will be
  exercisable to acquire one common share at US$0.35 per share for a term of one
  year from the issuance date. Each whole Series B warrant will be exercisable to
  acquire one common share at US$1.35 per share for a term of four years from the
  issuance date. During the 2007 fiscal year, the expiry date of these warrants
  was extended from July 27, 2007 to January 28, 2008. These warrants have since
  expired unexercised.

In March 2006, the Company issued
  50,000 shares at a value of US$10,000 pursuant to a mineral property option
  agreement.

|9. | 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

20

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

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.

21

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|9. | STOCK OPTIONS (continued)
|-- | --------------------------

On September 25, 2007 the Company
  amended the 2005 Stock Option Plan adjusting the maximum number of shares
  available to be granted from 2,000,000 to 2,500,000.

The change in stock options outstanding
  is as follows:

| |                      |  |                   |  |  |                   |  |  |                   |  
| | -------------------- |  | ----------------- |  |  | ----------------- |  |  | ----------------- | -
| |                      |  | December 31, 2008 |  |  | December 31, 2007 |  |  | December 31, 2006 |  
| |                      |  |                   |  |  | Weighted          |  |  |                   |  
| |                      |  |                   |  |  | Average           |  |  |                   |  
| |                      |  | Number            |  |  | Exercise          |  |  | Number            |  
| |                      |  | Of Options        |  |  | Price             |  |  | Of Options        |  
| |                      |  |                   |  |  |                   |  |  |                   |  
| | At January 1         |  | 2,450,000         |  |  | US$ 0.25          |  |  | 2,390,000         |  
| | Granted              |  | -                 |  |  | -                 |  |  | 2,450,000         |  
| | Exercised            |  | -                 |  |  | -                 |  |  | -                 |  
| | Expired or forfeited |  | -                 |  |  | -                 |  |  | (2,390,000        | )
| |                      |  |                   |  |  |                   |  |  |                   |  
| | At December 31       |  | 2,450,000         |  |  | US$ 0.25          |  |  | 2,450,000         |  

As at December 31, 2008 the following
  options are outstanding:

| |            |  |           |  |  |                    | 
| | ---------- |  | --------- |  |  | ------------------ | 
| | Number     |  | Exercise  |  |  |                    | 
| | Of Options |  | Price     |  |  | Expiry
      Date  | 
| |            |  |           |  |  |                    | 
| | 2,450,000  |  | US $ 0.25 |  |  | September 25, 2010 | 

Stock-based compensation

During 2007, the Company granted
  2,450,000 fully vested stock options, 2,000,000 to officers and directors and
  450,000 to contractors, with a fair value of $262,480 that has been recorded as
  contributed surplus and stock-based compensation in the results or operations.
  The fair value of the stock options granted was estimated using the
  Black-Scholes option pricing model assuming a dividend yield of 0%, expected
  volatility of 97%, risk free interest rate of 3.99% and weighted average
  expected life of 3 years. The weighted average grant date fair vale of the stock
  options granted was $0.10 per option.

22

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|10. | WARRANTS
|--- | --------

As at December 31, 2008 the following
  warrants are outstanding:

| |             |  |    |  |   |          |  |  |                       
| | ----------- |  | -- |  | - | -------- |  |  | ----------------------
| | Number      |  |    |  |   | Exercise |  |  |                       
| | Of Warrants |  |    |  |   | Price    |  |  | Expiry
      Date     
| |             |  |    |  |   |          |  |  |                       
| | 1,075,000   |  | US |  | $ | 1.35     |  |  | July 27, 2010         
| | 3,275,000   |  | US |  | $ | 0.15     |  |  | May 14, 2009 (expired)
| | 4,250,000   |  | US |  | $ | 0.15     |  |  | August 23, 2009       
| | 1,033,500   |  |    |  | $ | 0.25     |  |  | January 21, 2010      
| | 37,500      |  |    |  | $ | 0.25     |  |  | March 3, 2010         
| | 200,000     |  |    |  | $ | 0.25     |  |  | April 14, 2010        
| | 100,000     |  |    |  | $ | 0.20     |  |  | May 15, 2010          
| |             |  |    |  |   |          |  |  |                       
| | 9,971,000   |  |    |  |   |          |  |  |                       

Share purchase warrant transactions are
  summarized as follows:

| |                            |  |                 |   |   |          | 
| | -------------------------- |  | --------------- | - | - | -------- | 
| |                            |  |                 |   |   | Weighted | 
| |                            |  |                 |   |   | Average  | 
| |                            |  | Number          |   |   | Exercise | 
| |                            |  | Of
      Shares |   |   | Price    | 
| |                            |  |                 |   |   |          | 
| | Balance, December 31, 2005 |  | 5,445,000       |   | $ | 0.46     | 
| | Issued                     |  | 1,612,500       |   | $ | 1.06     | 
| | Expired                    |  | (2,300,000      | ) | $ | 0.50     | 
| |                            |  |                 |   |   |          | 
| | Balance, December 31, 2006 |  | 4,757,500       |   | $ | 0.71     | 
| | Issued                     |  | 7,525,000       |   | $ | 0.16     | 
| | Expired                    |  | (3,145,000      | ) | $ | 0.52     | 
| |                            |  |                 |   |   |          | 
| | Balance, December 31, 2007 |  | 9,137,500       |   | $ | 0.31     | 
| | Issued                     |  | 1,371,000       |   | $ | 0.25     | 
| | Expired                    |  | (537,500        | ) | $ | 0.36     | 
| |                            |  |                 |   |   |          | 
| | Balance, December 31, 2008 |  | 9,971,000       |   | $ | 0.31     | 

|11. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

During the year ended December 31,
  2008, the Company paid management fees and consulting fees of $40,941 (2007 
  $14,827, 2006 - $47,937) and rent, included in office, of $2,583 (2007 - $2,901,
  2006 -$3,744) to the Vice President of the Company, management fees of $10,488
  (2007 - $24,174, 2006 -$23,310) to company owned by the President of the Company
  and consulting fees of $18,638 (2007 -$nil, 2006 - $nil) to a company owned by
  the CFO of the Company. In December 2008, the President forgave $39,853 of
  management fees which is reversed against management fees.

23

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|11. | RELATED PARTY TRANSACTIONS (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | As at December 31, 2008, the Company owed $53,217 (2007 -
      $1,155) to various directors and officers of the Company which is included
      in accounts payable. In October 2008, amended subsequent to year- end, the
      Company signed an agreement whereby $32,020 of the amounts due to
      directors and officers would be settled through a cash payment of $7,520
      and the issuance of 490,000 shares of the Company (see Note 17). At
      December 31, 2008, the Company owed $43,281 (2007 - $nil) for rent and
      administrative expenses to a Company which shares a director in
      common
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | These transactions are in the normal course of operations
      and are measured at the exchange amount, which is the amount of
      consideration established and agreed to by the related parties.                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|12. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The income tax provision (recovery) shown on the
      statements of operations differs from the amounts obtained by applying
      combined federal and provincial statutory rates to the net loss before
      taxes as follows:                                                                                                                                                                                                                                                                                                                                                                                          

| |                               |   | 2008       |   |   | 2007       |   |   | 2006     |  
| | ----------------------------- | - | ---------- | - | - | ---------- | - | - | -------- | -
| |                               |   |            |   |   |            |   |   |          |  
| | Loss before income taxes      | $ | (2,683,240 | ) | $ | (1,158,990 | ) | $ | (469,208 | )
| |                               |   |            |   |   |            |   |   |          |  
| | Effective tax rate            |   | 31.0%      |   |   | 34.4%      |   |   | 35.0%    |  
| |                               |   |            |   |   |            |   |   |          |  
| | Expected tax recovery         | $ | (831,805   | ) | $ | (398,602   | ) | $ | (164,518 | )
| | Deductible items              |   | (6,868     | ) |   | (46,199    | ) |   | (44,250  | )
| | Non-deductible items          |   | 1,003,281  |   |   | 191,243    |   |   | 38,577   |  
| | Differences in tax rates      |   | (11,989    | ) |   | -          |   |   | -        |  
| | Change in valuation allowance |   | (152,619   | ) |   | 253,558    |   |   | 170,191  |  
| |                               |   |            |   |   |            |   |   |          |  
| |                               | $ | -          |   | $ | -          |   | $ | -        |  

Future income tax assets are calculated
  as follows:

| |                                                 |   | 2008     |   |   | 2007     |  
| | ----------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                 |   |          |   |   |          |  
| | Future income tax assets relate to:             |   |          |   |   |          |  
| | Loss carryforwards                              | $ | 197,000  |   | $ | 58,000   |  
| | Accumulated mineral property
      expenditures |   | 759,000  |   |   | 227,000  |  
| | Capital assets and other                        |   | 10,000   |   |   | -        |  
| | Financing costs                                 |   | 22,000   |   |   | -        |  
| |                                                 |   |          |   |   |          |  
| |                                                 |   | 988,000  |   |   | 285,000  |  
| | Valuation allowance                             |   | (988,000 | ) |   | (285,000 | )
| |                                                 |   |          |   |   |          |  
| |                                                 | $ | -        |   | $ | -        |  

24

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|12. | INCOME TAXES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | As at December 31, 2008, the Company has non-capital loss
      carry forwards of $740,000 (2007: $170,000) available to reduce income
      otherwise taxable in future years expiring through to 2027.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The potential tax benefits related to the loss carry
      forwards and other temporary differences, the application of which may be
      restricted, have not been recognized in these consolidated financial
      statements as management does not consider it likely that such assets will
      be realized in the carry forward period. Also, the availability of the
      above deductions for income tax purposes may be restricted if there are
      future changes in control.                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|13. | CAPITAL MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Company defines its capital as shareholders equity.
      The Company manages its capital structure and makes adjustments to it,
      based on the funds available to the Company, in order to support the
      acquisition, exploration and development of mineral properties. The Board
      of Directors does not establish quantitative return on capital criteria
      for management, but rather relies on the expertise of the Companys
      management to sustain future development of the business.                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The properties in which the Company currently has an
      interest are in the exploration stage; as such the Company has
      historically relied on the equity markets to fund its activities. In
      addition, the Company is dependent upon external financings to fund
      activities. In order to carry out planned exploration and pay for
      administrative costs, the Company will need to raise additional funds. The
      Company will continue to assess new properties and seek to acquire an
      interest in additional properties if it feels there is sufficient geologic
      or economic potential and if it has adequate financial resources to do
      so.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Management reviews its capital management approach on an
      ongoing basis and believes that this approach, given the relative size of
      the Company, is reasonable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|14. | FINANCIAL INSTRUMENTS AND RISK
      MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The fair value of cash, receivables, advances, and
      accounts payable and accrued liabilities approximates their carrying value
      due to the short term nature of the instruments. The fair value of the
      convertible loans and notes payable have not been determined as no
      relevant information is available for these types of financial instruments
      and it is not practicable to do so. The terms and conditions of the loans
      are detailed in Note 7.                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Companys operations in the United States and Mexico
      expose the Company to foreign exchange risk. The Company is subject to
      currency risk due to the fluctuations of exchange rates between the
      Canadian and US dollars, as well as the Canadian dollar and Mexican
      pesos.                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | At December 31, 2008, approximately 28% of the Companys
      accounts payable and accrued liabilities and approximately 12.75% of the
      Companys loan and notes payable are denominated in US dollars and/or
      Mexican pesos. For each 10% change in the Canadian dollar against the
      Mexican peso, a $87,000 gain/loss would arise, and for each 10% change in
      the Canadian dollar against the US dollar, a                                                                                                                                                                                                                                                         

25

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|    | $37,650 gain/loss would arise. The Company does not enter
      into derivative financial instruments to mitigate this risk.                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|14. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Companys cash is held in large Canadian financial
      institutions. The Company does not have any asset-backed commercial paper.
      The Companys receivables consist of GST receivable due from the Federal
      Government of Canada. The Company maintains cash deposits with Schedule A
      financial institutions, which from time to time may exceed federally
      insured limits. The Company has not experienced any significant credit
      losses and believes it is not exposed to any significant credit
      risk.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Interest rate risk is the risk the fair value or future
      cash flows of a financial instrument will fluctuate because of changes in
      market interest rates. Financial assets and liabilities with variable
      interest rates expose the Company to cash flow interest rate risk. The
      Company does not hold any financial assets or liabilities with variable
      interest rates.                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Companys ability to continue as a going concern is
      dependent on managements ability to raise required funding through future
      equity issuances and through short-term borrowing. The Company manages its
      liquidity risk by forecasting cash flows from operations and anticipating
      any investing and financing activities. Management and the Board of
      Directors are actively involved in the review, planning and approval of
      significant expenditures and commitments.                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Companys plan to deal with its current capital
      deficiency is to settle debt with issuance of shares and to complete the
      agreement with LPT (see Note 17).                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The ability of the Company to explore its mineral
      properties and the future profitability of the Company are directly
      related to the market price of precious metals. The Company monitors
      precious metals prices to determine the appropriate course of action to be
      taken by the Company.                                                                                                                                                                                                                             

26

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|15. | SUPPLEMENTARY DISCLOSURE WITH RESPECT TO
      CASH FLOW
|--- | --------------------------------------------------------

Significant non-cash transactions for
  the year ended December 31, 2008 included:

| | (a) | The Company settled debt of US$87,500 through the
      issuance of 583,334 common shares with a fair value of $40,833 and
      recorded a gain on settlement of debt of $46,667.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                   
| | (b) | The Company applied $19,900 of deferred financing fees to
      share issue costs and incurred additional costs of $154,600 through
      accounts payable at year-end.           
| |     |                                                                                                                                                                                   
| | (c) | The Company issued 987,410 units for share subscriptions
      of $197,482 received on December 31, 2007                                                                          

Significant non-cash transactions for
  the year ended December 31, 2007 included:

| | (a) | The Company issued 60,000 common shares with a fair value
      of $10,928 to settle accounts payable. 
| | --- | -------------------------------------------------------------------------------------------------------
| |     |                                                                                                        
| | (b) | The Company issued 666,666 common shares to settle share
      issuance obligation of $85,434.         
| |     |                                                                                                        
| | (c) | The Company issued 150,000 common shares with a fair
      value of $16,222 for mineral property costs.

There were no significant non-cash
  transactions for the year ended December 31, 2006.

|16. | SEGMENTED INFORMATION
|--- | ---------------------

The Company has one reportable
  operating segment, being the acquisition and exploration of mineral properties.
  Geographical information is as follows:

| |                 |   |              |  |   |              | 
| | --------------- | - | ------------ |  | - | ------------ | 
| |                 |   | December 31, |  |   | December 31, | 
| |                 |   | 2008         |  |   | 2007         | 
| |                 |   |              |  |   |              | 
| | Capital assets: |   |              |  |   |              | 
| | Mexico          | $ | 8,373        |  | $ | 21,816       | 
| | Canada          |   | 3,306        |  |   | 5,786        | 
| |                 |   |              |  |   |              | 
| |                 | $ | 11,679       |  | $ | 27,602       | 

|17. | SUBSEQUENT EVENTS
|--- | -----------------

(a)          
  LPT Capital  Arrangement agreement

On January 15, 2009 the Company entered
  into an agreement with LPT Capital Ltd. (LPT) whereby 0843037 BC Ltd., a
  subsidiary of LPT, will acquire 100% of the issued common shares of the Company
  and in return issue to the Companys shareholders 23,000,000 LPT shares. The
  outstanding warrants of the Company will be converted into warrants of LPT based
  on a share exchange ratio. All outstanding options of LPT and the Company will
  be cancelled with the exception of LPTs agent options.

27

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|17. | SUBSEQUENT EVENTS (continued)
|--- | ------------------------------

On February 18, 2009, the Companys
  shareholders approved and completed the continuation of the Company from federal
  jurisdiction to British Columbia and also approved the qualifying transaction
  with LPT. On February 20, 2009 the Supreme Court of British Columbia entered its
  final order approving the plan of arrangement. The completion of the transaction
  will occur in conjunction with LPT completing an equity financing by way of a
  public offering to raise up to $3,380,000

LPT has advanced the Company a total of
  $66,500 which is comprised of an advance of $25,000 and payments of $41,500 on
  behalf of the Company to settle a portion of its accounts payables.

The Company, as at December 31, 2008,
  has incurred $177,600 of deferred financing costs in relation to this
  transaction

(b)          
  Shares for debt

In October 2008, subject to the
  completion of the LPT agreement by February 28, 2009 further amended in January
  2009 to by April 30, 2009 further amended in April 2009 to by June 30, 2009, the
  Company arranged to settle $1,614,036 of debt for the cash payment of $651,580
  and the issuance of 19,259,900 shares of the Company as follows:

| |                                        |   | Debt      |  |  | Shares     |  |   | Cash    |  |  |            |  
| | -------------------------------------- | - | --------- |  |  | ---------- |  | - | ------- |  |  | ---------- | -
| |                                        |   |           |  |  |            |  |   |         |  |  |            |  
| | Convertible loans from related parties | $ | 240,000   |  |  | 4,600,000  |  | $ | 10,000  |  |  |            |  
| | Notes payable                          |   | 400,000   |  |  | 7,000,000  |  |   | 61,137  |  |  | (US$50,000 | )
| | Promissory note                        |   | 800,000   |  |  | 6,000,000  |  |   | 500,000 |  |  |            |  
| | Accounts payable - related parties     |   | 32,020    |  |  | 490,000    |  |   | 7,520   |  |  |            |  
| | Accounts payable                       |   | 142,016   |  |  | 1,169,900  |  |   | 72,923  |  |  |            |  
| |                                        |   |           |  |  |            |  |   |         |  |  |            |  
| |                                        | $ | 1,614,036 |  |  | 19,259,900 |  | $ | 651,580 |  |  |            |  

If the proposed LPT agreement does not
  complete by June 30, 2009, the settlement agreements become null and void.
  Certain of these agreements with debts totaling $1,162,689 were amended to
  extend the completion date to August 31, 2009.

|18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
|--- | ---------------------------------------------------------------------------------------

These consolidated financial statements
  have been prepared in accordance with generally accepted accounting principles
  in Canada (Canadian GAAP). There are no material variations in the accounting
  principles, practices and methods used in preparing these consolidated financial
  statements from principles, practices and methods accepted in the United States
  (U.S. GAAP).

28

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|18. | DIFFERENCES BETWEEN
      CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ----------------------------------------------------------------------------------------------------------

Adoption of new accounting
  policies

Effective January 1, 2008, the Company
  adopted the following accounting pronouncements:

SFAS No. 157, Fair Value Measurements
  which, among other requirements, defines fair value and establishes a framework
  for measuring fair value and also expands disclosure about the use of fair value
  to measure assets and liabilities. This pronouncement only applies to fair value
  measurements that are already required. There is no difference between Canadian
  and US GAAP to the Companys December 31, 2008 consolidated financial statements
  resulting from the adoption of SFAS 157.

SFAS No. 159, The Fair Value Option
  for Financial Assets and Financial Liabilities, including an amendment of FASB
  Statement No. 115 permits entities to choose to measure eligible financial
  instruments at fair value as of specified dates. Such election, which may be
  applied on an instrument by instrument basis, is typically irrevocable once
  elected. As the Company did not elect to adapt the fair value option under this
  statement, there is no effect on the Companys financial position or results of
  operations.

Recent accounting
  pronouncements

In December 2007, the FASB issued SFAS
  No. 141R, Business Combinations which changes how business acquisitions are
  accounted. SFAS 141R requires the acquiring entity in a business combination to
  recognize all (and only) the assets acquired and liabilities assumed in the
  transaction and establishes the acquisition-date fair value as the measurement
  objective for all assets acquired and liabilities assumed in a business
  combination. Certain provisions of this standard will, among other things,
  impact the determination of acquisition-date fair value of consideration paid in
  a business combination (including contingent considerations); exclude
  transaction costs from acquisition accounting; and change accounting practices
  for acquired contingencies, acquisition-related restructuring costs, in-process
  research and development, indemnification assets and tax benefits. SFAS No. 141R
  is effective for business combinations and adjustments to an acquired entitys
  deferred tax asset and liability balances occurring after December 31, 2008.

In December 2007, the FASB issued SFAS
  No. 160, Noncontrolling Interests in Consolidated Financial Statement, an
  amendment of ARB No. 51, which establishes new standards governing the
  accounting for and reporting of noncontrolling interests (NCI) in partially
  owned consolidated subsidiaries and the loss of control of subsidiaries. Certain
  provisions of this standard indicate, among other things, that NCIs (previously
  referred to as minority interests) be treated as a separate component of equity,
  not as a liability; that increases and decreases in the parents ownership
  interest that leave control intact be treated as equity transactions, rather
  than as step acquisitions or dilution gains or losses; and that losses of a
  partially owned consolidated subsidiary be allocated to the NCI even when such
  allocation might result in a deficit balance. This standard also requires
  changes to certain presentation and disclosure requirements. SFAS No. 160 is
  effective beginning January 1, 2009. The provisions of the standard are to be
  applied to all NCIs prospectively, except for the presentation and disclosure
  requirements, which are to be applied retrospectively to all periods presented.

29

---

|LINCOLN GOLD CORPORATION                                
|--------------------------------------------------------
|(An Exploration Stage Company)                          
|Notes to the Consolidated Financial Statements          
|(Expressed in Canadian dollars, unless otherwise stated)
|                                                        

|18. | DIFFERENCES BETWEEN
      CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ----------------------------------------------------------------------------------------------------------

In June 2008, the EITF reached a
  consensus on EITF Issue No. 07-5, Determining Whether an Instrument (or
  Embedded Feature) Is Indexed to an Entitys Own Stock (EITF 07-5). EITF 07-5
  addresses the determination of whether an equity linked financial instrument (or
  embedded feature) that has all of the characteristics of a derivative under
  other authoritative U.S. GAAP accounting literature is indexed to an entitys
  own stock and would therefore meet the first part of a scope exception from
  classification and recognition as a derivative instrument. The Company plans to
  adopt the provisions of EITF 07-05 on January 1, 2009, for US GAAP accounting
  purposes. The Company is currently assessing the effect of the adoption of EITF
  07-5 on its consolidated financial statements.

The adoption of these new
  pronouncements is not expected to have a material effect on the Companys
  financial position or results of operations.

30

---

ITEM
19           EXHIBITS

Exhibit Number
      Description of Exhibit1.01
      Certificate of Continuation, a British Columbia corporation (6)1.02
      Notice of Articles of Lincoln Gold Corporation, a British Columbia corporation (6)1.03
      Articles of Lincoln Gold Corporation, a British Columbia corporation (6)2.01
      Shareholder Rights Plan (4)4.01
      2005 Stock Option Plan, as amended (5)4.02
      Option Agreement between the Corporation and Almaden dated April 12, 2007 (1)4.03
      Form of Regulation S Subscription Agreement for May 2007 Unit Offering (2)4.04
      Lease agreement dated July 13, 2007 between Lincoln Gold Corporation and Wheeler Mining Company (5)4.05
      Lease agreement dated August 1, 2007 between Lincoln Gold Corporation and Lyon Grove, PLC (5)4.06
      Form of Regulation D Subscription Agreement for August 2007 Unit Offering (3)4.07
      Form of Regulation S Subscription Agreement for August 2007 Unit Offering (3)4.08
      Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated January 5, 2009 (6)4.09
      First Amendment to Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated February 16, 2009 (6)4.10
      Second Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated April 30, 2009 (6)4.11
      Third Arrangement Agreement among LPT Capital Ltd., Lincoln Gold Corporation and 0843037 B.C. Ltd., dated June 30, 2009 (6)11.01
      Code of Ethics (5)12.1
      Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (6)12.2
      Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (6)13.1
      Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)13.2
      Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)


- 87 -

---



|(1) | Previously filed as an exhibit to our Current Report on Form 8-K filed on April 18, 2007. 
|--- | ------------------------------------------------------------------------------------------
|    |                                                                                           
|(2) | Previously filed as an exhibit to our Current Report on Form 8-K filed on May 18, 2007.   
|    |                                                                                           
|(3) | Previously filed as an exhibit to our Current Report on Form 8-K filed on August 28, 2007.
|    |                                                                                           
|(4) | Previously filed as an exhibit to our Current report on Form 6-K filed on July 9, 2008.   
|    |                                                                                           
|(5) | Previously filed as an exhibit to our Annual Report on Form 20-F  filed on July 15, 2008. 
|    |                                                                                           
|(6) | Filed as an Exhibit to this Annual Report on Form 20-F                                    

__________

- 88 -

---

SIGNATURES

The Registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign on its behalf.



**LINCOLN GOLD CORP.**

Per:         
 /s/ Paul Saxton
                
_____________________________________________Name:     
Paul Saxton Title:        President
and Chief Executive Officer



Date:        July 14, 2009

---