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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

x Annual Report Pursuant
  To Section 13 Or 15(D) Of The Securities Exchange Act Of 1934

For the fiscal year ended December 31, 2005

 ̈ Transition Report
  Under Section 13 Or 15(D) Of The Securities Exchange Act Of 1934

For the transition period from **__________**to
**__________**

COMMISSION FILE NUMBER: 0-25827

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

|Nevada                                                         | 88-0419475                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|Suite 350  885 Dunsmuir Street                                |                                     
|Vancouver, British Columbia, Canada                            | V6C 1N5                             
|(Address of principal executive offices)                       | (Zip Code)                          
|                                                               |                                     
|(604) 688-7377                                                
|Issuers telephone number                                     

Securities registered under Section 12(b) of the Exchange Act:
None.

Securities registered under Section 12(g) of the Exchange
Act:Common Stock, $0.001 per share

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

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

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

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

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked price of such
common equity, as of a specified date within the past 60 days. (See definition
of affiliate in Rule 12b-2of the Exchange Act.) $5,879,700 as of
March 30, 2006

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. 41,915,000
shares of common stock as of March 30, 2006

Transitional Small Business Disclosure Format (check one): Yes
   ̈ No x

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PART I

ITEM
1.               
DESCRIPTION OF BUSINESS.

FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-KSB contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements involve risks and uncertainties,
including statements regarding our capital needs, business plans and
expectations. Such forward-looking statements involve risks and uncertainties
regarding the market price of gold, availability of funds, government
regulations, common share prices, operating costs, capital costs, outcomes of
ore reserve development and other factors. Forward-looking statements are made,
without limitation, in relation to operating plans, property exploration and
development, availability of funds, environmental reclamation, operating costs
and permit acquisition. Any statements contained herein that are not statements
of historical facts may be deemed to be forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as may,
will, should, expect, plan, intend, anticipate, believe,
estimate, predict, potential or continue, the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks outlined below, and, from time to time, in other reports we file with the
SEC. These factors may cause our actual results to differ materially from any
forward-looking statement. We disclaim any obligation to publicly update these
statements, or disclose any difference between our actual results and those
reflected in these statements. The information constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.

CORPORATE ORGANIZATION

Incorporation

We were incorporated under the laws of the State of Nevada as
Braden Technologies, Inc. on February 17, 1999. We have been engaged in the
acquisition, exploration and development of mineral properties since our
inception.

Share Split

We completed a four-for-one split of our common stock effective
March 10, 2004. As a result of this stock-split, our authorized capital
increased from 25,000,000 shares to 100,000,000 shares of common stock.
Concurrent with our stock split, the number of our issued and outstanding shares
increased from 2,850,000 shares to 11,400,000 shares.

Acquisition of Lincoln Gold

We completed the acquisition of Lincoln Gold Corp., (Lincoln
Gold) a Nevada corporation effective March 26, 2004. This acquisition was
completed by our acquisition of all of the issued and outstanding shares of
Lincoln Gold from the former shareholders of Lincoln Gold. On closing of the
acquisition, we issued 24,000,000 shares of our common stock to the shareholders
of Lincoln Gold. As a result of this issuance, the number of our 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.

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Merger with Lincoln Gold

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

OVERVIEW

We are engaged in the acquisition and exploration of mineral
properties in the State of Nevada. Our plan of operations for the next twelve
months is to conduct exploration of our mineral properties in the State of
Nevada.

We are an exploration stage company. All of our projects are at
the exploration stage and there is no assurance that any of our mining claims
contain a commercially viable ore body. We plan to undertake further exploration
of our properties. We anticipate that we will require additional financing in
order to pursue full exploration of these claims. We do not have sufficient
financing to undertake full exploration of our mineral claims at present and
there is no assurance that we will be able to obtain the necessary
financing.

There is no assurance that a commercially viable mineral
deposit exists on any of our mineral properties. Further exploration beyond the
scope of our planned exploration activities will be required before a final
evaluation as to the economic and legal feasibility of mining of any of our
properties is determined. There is no assurance that further exploration will
result in a final evaluation that a commercially viable mineral deposit exists
on any of our mineral properties.

MINERAL PROPERTIES AND PLAN OF OPERATIONS

We hold interests in five groups of mineral properties, with
four properties located in Nevada and one property located in Mexico, as
described below:

Name of Property
    LocationBuffalo Valley Property
    Humboldt, Lander & Pershing Counties,
      NevadaHannah Property
    Churchill County, NevadaJDS Property
    Eureka County, NevadaJenny Hill Property
    Mineral & NYE Counties, NevadaLa Bufa
    Mexico


Our plan of operations is to carry out exploration of our
mineral properties. Our specific exploration plan for each 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 in the section of this Annual Report on Form 10-KSB entitled
Description of Properties. All of our exploration programs are preliminary in
nature in that their completion will not result in a determination that any of
our properties contains commercially exploitable quantities of
mineralization.

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 in the section of this Annual Report on Form 10-KSB entitled
Description of Properties. We plan to solicit bids from drilling companies
prior to selecting any drilling company to complete a drilling program. We
anticipate paying normal industry rates for reverse-circulation drilling.

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We plan to complete our exploration programs within the periods
specified in the section of this Annual Report on Form 10-KSB entitled
Description of Properties. Key factors that could delay completion of our
exploration programs beyond the projected timeframes include the following.

|(a) | Poor availability of drill rigs due to high demand in
      Nevada and Mexico;                                                                                                                        
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Delays caused by permitting and bonding with the US
      Bureau of Land Management with respect to drilling programs;                                                                                
|(c) | Our inability to identify a joint venture partner and
      conclude a joint venture agreement where we anticipate a joint venture
      will be required due to the high costs of a drilling program;
|(d) | Adverse weather, including heavy snow; and                                                                                                                                                            
|(e) | Our inability to obtain sufficient
  funding.                                                                                                                                                         

Key factors that could cause our exploration costs to be
greater than anticipated include the following:

|(a) | adverse drilling conditions, including caving ground,
      lost circulation, the presence of artesian water, stuck drill steel and
      adverse weather precluding drill site access;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | increased costs for contract geologists and geochemical
      sampling crews due to increased in demand in Nevada; and                                                                 
|(c) | increased drill rig and crew rental costs due to high
      demand in Nevada and Mexico.                                                                                               

Our board of directors will make determinations as whether to
proceed with the additional exploration of our Nevada and Mexico mineral
properties based on the results of the preliminary exploration that we
undertake. In completing these determinations, we will make an assessment as to
whether the results of the preliminary exploration are sufficiently positive to
enable us to achieve the financing that would be necessary for us to proceed
with more advanced exploration.

We may consider entering into joint venture arrangements on
several of our mineral properties, as noted in the section of this Annual Report
on Form 10-KSB entitled Description of Properties, to provide the required
funding to pursue drilling and advanced 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.
The assignment of the interest would be conditional upon contribution by the
joint venture partner of capital to enable the advanced exploration on the
mineral properties to proceed. We are presently in the process of attempting to
locate a joint venture partner for our mineral claims, but we have not concluded
any joint venture agreements to date. 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.

We plan to continue exploration of our mineral claims for so
long as the results of the geological exploration that we complete indicate the
further exploration of our mineral claims is recommended and we are able to
obtain the additional financing necessary to enable us to continue exploration.
We have renewed all of our Nevada mineral claims by making the required filings
with the Bureau of Land Management by September 1, 2005. We further plan to
renew all of our mineral claims by making the required filings with the Bureau
of Land Management by September 1, 2006 except where we determine to abandon
exploration of any mineral claim prior to September 1, 2006. All exploration
activities on our mineral claims are presently preliminary exploration
activities. Advanced exploration activities, including the completion of
comprehensive drilling programs, will be necessary before we are able to
complete any feasibility studies on any of our mineral properties. If our
exploration activities result in an indication that our mineral claims contain
potentially commercial exploitable quantities of gold, then we would attempt to
complete feasibility studies on our property to assess whether commercial
exploitation of the property would be commercially feasible. There is no
assurance that commercial exploitation of our mineral claims would be
commercially feasible even if our initial exploration programs show evidence of
gold mineralization.

If we determine not to proceed with further exploration of any
of our mineral claims due to results from geological exploration that indicate
that further exploration is not recommended or due to our lack of financing, we
will attempt to acquire additional interests in new mineral resource properties.
Due to our limited finances, there is no assurance that we would be able to
acquire an interest in a new property that merits further exploration. If we
were to acquire an interest in a new property, then our plan would be to conduct
resource exploration of the new property. In any event, we anticipate that our
acquisition of a

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new property and any exploration activities that we would
undertake will be subject to our achieving additional financing, of which there
is no assurance.

PRIOR EXPLORATION ACTIVITIES

A summary of our exploration activities on properties that have
been discontinued prior to January 1, 2005 is included in our Annual Report on
Form 10-KSB for the year ended December 31, 2004.

Lincoln Flat Property

We previously held option to acquire a 100% interest in the
claims comprising the Lincoln Flat project, subject to a net smelter royalty,
pursuant an option agreement dated December 24, 2003 between us and Larry and
Susan McIntosh of Gardnerville, Nevada, as optionors. The Lincoln Flat property
is comprised of twenty-seven (27) unpatented lode claims covering approximately
540 acres (0.84 sq miles) in Lyon and Douglas Counties Nevada. We had the option
to acquire a 100% interest in the Lincoln Flat property by making aggregate
payments to the optionors in the amount of $210,000.

We commenced field exploration work on the Lincoln Flat
property during the first quarter of 2005 with the objective of further
exploring a gold-hematite breccia target and a fracture-controlled gold porphyry
target. This field work included a soil sampling and rock-chip sampling
program.

We submitted a Notice of Intent to Operate and Reclamation Bond
to the U.S. Bureau of Land Management with the objective of drill testing the
two target areas in June 2005. Permitting was approved by the U.S. Bureau of
Reclamation. We drilled nine reverse-circulation drill holes during the summer
of 2005 for a total footage of 5,145 ft. Drilling was conducted to test various
gold soil anomalies and geologic targets. While scattered intercepts of gold
were encountered, the results did not meet our expectations. As a result, we
terminated the option agreement and the property has been returned to the owner.
We have no further liabilities or obligations with respect to either the Lincoln
Flat Project or the option agreement other than to complete approximately
$15,000 of reclamation work relating to the drilling that we completed. This
reclamation work is required under our drilling permit.

New Opportunities

During 2005, we continued to review new prospective gold
exploration opportunities in Nevada, Utah, Arizona, California, and Mexico. We
plan to continue to review new opportunities on a case-by-case basis.

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.

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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.

GOVERNMENT REGULATIONS

We will be required to obtain work permits from the United
States Bureau of Land Management (BLM) 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, 2006.
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 tem of its exploration concession. An annual fee of $1.25
pesos per hectare is due to the Mexican federal government. The net area of the
La Bufa exploration concession is 1040.75 hectares, thereby requiring an annual
payment of $1300.94 pesos.

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 Annual Report on Form 10-KSB
entitled Description of Properties.

EMPLOYEES

We have two employees, namely Paul Saxton, our chief executive
officer and chief financial officer, and Jeffrey Wilson, our vice-president of
exploration. We carry out our exploration programs through contracts with third
parties, including geologists, engineers, drilling companies.

SUBSIDIARIES

We do not have any subsidiaries.

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ITEM
2.               
DESCRIPTION OF PROPERTIES.

DESCRIPTION OF PROPERTIES

We maintain our head office located at Suite 350  885 Dunsmuir
Street, Vancouver, B.C., V6C 1N5. These premises are located at the business
premises of our president, Mr. Paul Saxton. We pay a proportionate share of rent
and administrative expenses associated with these premises.

Our operations office is located at 325 Tahoe Drive, Carson
City, Nevada, 89703. Our operations office is located in the home of Mr. Jeff
Wilson, our vice-president of exploration. These premises are provided by Mr.
Wilson at no cost to us.

Our current four groups of mineral properties located in the
State of Nevada are described below:

BUFFALO VALLEY PROPERTY

1.          
Location and Access

The Buffalo Valley property is located in north-central Nevada,
approximately 25 miles west of the small town of Battle Mountain, Nevada in
Humboldt, Lander, and Pershing Counties. Access is good via US Interstate 80 to
the north and numerous dirt and gravel ranch and mine roads. A map showing the
location of and access to the Buffalo Valley property is presented below:



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2.          
Ownership Interest

We have acquired a twenty year lease of the two hundred
sixty-eight (268) unpatented lode claims that comprise the Buffalo Valley
Property. We acquired our lease pursuant to a mining lease agreement dated July
9, 2004 between us and Nevada North Resources (U.S.A.), Inc., the underlying
owner of the property (Nevada North). We paid to $10,000 to Nevada North upon
execution of the lease agreement. We are obligated to make the following advance
minimum royalty payments to Nevada North in order to maintain our leasehold
interest in the Buffalo Valley Property:

Date of Payment
    Amount of Advance Minimum
      RoyaltyJuly 9, 2005 (payment made)
    $20,000July 9, 2006
    $20,000July 9, 2007
    $40,000July 9, 2008
    $40,000July 9, 2009
    $50,000July 9, 2010
    $50,000July 9, 2011
    $60,000July 9, 2012
    $60,000July 9, 2013
    $70,000July 9, 2014
    $70,000Each Subsequent Anniversary
    $80,000, subject to adjustment for
      inflation increases with the beginning index being the index
      published for April 2015


We have committed to a two year option on the claims made up of
the initial payment and the first year anniversary payment. Thereafter, Nevada
North will be entitled to terminate if we do not make any subsequent payment. We
will not be responsible or liable for advance royalty payments due subsequent to
termination or expiration of the lease agreement.

In addition, we are obligated to pay to Nevada North a net
smelter return (NSR) equal to a percentage of Net Revenue as defined and
calculated under the lease agreement as follows:

Price of Gold
    Amount of NSR, as a percentage
      of Net Revenue$375 or less per ounce
    3.0%More than $375 but less than $474 per ounce
    4.0%$474 or more per ounce
    5.0%


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The initial term of the lease is twenty years from July 9,
2004, subject to our making the required payments to Nevada North. The term of
the lease will remain in effect thereafter for so long as mining, processing,
construction of mine facilities, development or ore reserves or exploration
activities continue on the Buffalo Valley Property or adjacent properties that
we own or control.

The lease agreement entitles us to carry out mineral
exploration of the Buffalo Valley Property during the term of the lease. We are
obligated to pay for all Bureau of Land Management and county maintenance fees
required in order to maintain the claims comprising the Buffalo Valley Property
during the term of the lease. We do not have any minimum work or exploration
requirements under the lease.

We completed the $20,000 payment due pursuant to our lease
agreement for the Buffalo Valley property to Nevada North Resources (U.S.A.),
Inc. prior to the first anniversary, as required by the agreement. We have also
paid all current BLM and County fees in the amount of $35,866.50 that were
required by October 1, 2006. We are not obligated to complete any exploration
expenditures in order to maintain our lease interest in the Buffalo Valley
property.

3.          
History of Operations

The Buffalo Valley Property and adjacent areas have been
explored over the past 10 years by Uranerz, Cameco, Nevada North, Homestake,
Anglo Gold, and Newcrest. Geophysical work and some drilling were conducted by
Uranerz/Cameco and Anglo Gold and perhaps others. Under Homestakes control,
exploration of the property was advanced by assimilating the large data base and
defining three shear zone targets along the Buffalo Valley axial fault. The
targets were never drilled because Barrick bought out Homestake and the property
was returned to Nevada North.

The most comprehensive geological report in our possession is
an exploration drilling proposal prepared for Homestake which recommended the
drilling of 10 exploration holes with attending budget. The drilling program was
approved by Homestakes senior management but the holes were never drilled due
to the acquisition of Homestake Mining by Barrick.

We also have obtained several CD disks containing geological
and geophysical data, including important information from Anglo Gold. We are in
the process of organizing and evaluating this information.

4.          
Present Condition of the Property and Proposed Exploration Program

The Buffalo Valley 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 Buffalo Valley Property. The property consists of
barren land with no improvements.

We executed a letter to intent to joint venture the Buffalo
Valley Property with Agnico-Eagle (USA) Ltd., effective July 26, 2005. Under the
terms of the letter agreement, Agnico-Eagle is obligated to keep the property in
good standing with the BLM and local Counties and to make the underlying
payments to the Owner, Nevada North Resources (USA), Inc. Upon completing US$3.0
million in work expenditures on the Property, Agnico-Eagle will have earned a
60% interest in the property and a joint venture will be formed. Agnico-Eagle
will then have 180 days to elect to earn an additional 10% by preparing and
presenting to the Company a feasibility study for the development of a mine on
the property. On completion of the feasibility study, Agnico-Eagle will have
earned a 70% interest in the property. If the joint venture decides to develop a
mine, Agnico-Eagle may loan or help arrange financing for our portion of the
required capital in consideration of an additional 5% interest in the joint
venture. Exercise of this option would result in Agnico-Eagle holding 75% and us
holding 25% of the joint venture. If Agnico-Eagle elects to drop the Property
before June 1 in any given year, the lease payment obligations and government
claim holding costs shall revert back to us.

The current exploration plans for the Buffalo Valley Property
is set forth below. All work will be conducted by Agnico-Eagle and the Company
will have no involvement in any exploration contractual work. Our vice-president
of exploration will monitor all work completed by Agnico-Eagle.

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Stage of Exploration
    Anticipated Timetable for
      **Completion**
    Estimated Cost of CompletionPossible geophysical programs.
    First quarter of 2006 through the
      second quarter of 2006
    $1,500Phase one exploration drilling on structural
      intersections with magnetica lows and evaluation of exploration data
    First quarter of 2006 through the
      fourth quarter of 2006
    $250,000


It is possible that Agnico-Eagle will complete their phase one
drilling and data evaluation and return the property to us prior to June 1,
2006. If so, we would be obligated to make the annual claim maintenance payments
to the BLM and local Counties to keep the property in good standing.

Agnico-Eagle will be required to submit a Notice of Intent to
Operate plus post a Reclamation Bond (est. $25,000 cash bond) prior to
undertaking any drilling on the Buffalo Valley property.

5.          
Geology

The Buffalo Valley Property lies within the northern portion of
the Battle Mountain-Eureka Gold Trend in the broad, north-northeast-trending
Buffalo Valley. Although much of the bedrock in Buffalo Valley is concealed by
alluvium, past exploration drilling has revealed favourable stratigraphy for
Carlin-type, Cove-type and skarn deposits containing gold and silver
mineralization beneath valley fill. Potential host rocks above the Golconda
Thrust include the Triassic Star Peak Group (Cove host) and the Carboniferous
Havallah Sequence (partial Lone Tree host; Converse host). Host rocks beneath
the Golconda Thrust are the Penn-Permian Antler Sequence (Lone Tree &
Marigold hosts). District ore controls appear to be north-trending faults,
favourable stratigraphy, and +/- 41-39 million year old intrusive rocks.
Geophysical interpretations indicate that a swarm of north-trending faults are
present within the claims controlled by us. Gossanous alteration and elevated
pathfinder elements have been encountered on the property in past drilling.
Targets in covered areas are typically defined by intersecting structures and
magnetic lows.

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HANNAH PROPERTY, CHURCHILL COUNTY, NEVADA

1.          
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:



2.         
 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.

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 between us and Larry and Susan McIntosh
of Gardnerville, Nevada, as optionors. We have the option to acquire a 100%
interest in the Hannah property by making aggregate payments to the optionors in
the amount of $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. We are obligated to make the following option payments in order to
maintain our option agreement in good standing:

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Date of Payment
    Amount of Option PaymentDecember 24, 2003
    $5,000 (paid)January 10, 2005
    $5,000 (paid)January 10, 2006
    $10,000 (paid)January 10, 2007
    $15,000January 10, 2008
    $25,000January 10, 2009
    $25,000January 10, 2010
    $25,000January 10, 2011
    $25,000January 10, 2012
    $25,000January 10, 2013
    $50,000


We will be deemed to have exercised the option upon completion
of the above option payments at which time we 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 $400 per ounce, and 4% of net smelter returns if the price
of gold is greater than $400 per ounce. If we exercise the option, we will have
the right to reduce the net smelter royalty by 1%, up to a maximum of 2%, upon
the payment of $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 $500,000
      Net Smelter Royalty payable
      after second payment of $500,000Less than or equal to $400
    3%
    2%
    1%Greater than $400
    4%
    3%
    2%


If we complete 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, we 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.

We have the exclusive right to conduct exploration on the
Hannah property during the term of the option agreement, provided that we make
the required option payments. We are 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 we do not make any
required option payment, then the optionors will be entitled to terminate the
agreement and we will lose our interest in the property. However, we will not
have any obligation to make further option payments in the event of termination
due our inability to make any required option payment. We may surrender our
interest in the property and

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terminate the agreement at our election upon written notice to
the optionors. In this event, the optionors will retain all option payments paid
pursuant to the agreement.

We have paid $3,074.50 for BLM and County annual claim
maintenance fees that were required to be paid by October 1, 2005. We will be
required pay approximately $3,075 for BLM and County annual claim maintenance
fees by September 1, 2006. We are not obligated to complete any minimum
exploration expenditures or other work commitment in order to maintain our
option on the Hannah property.

3.         
 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.

4.          
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. Our current state of
exploration consists of geologic mapping and sampling.

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.

We have no formal geologic reports on the Hannah Property.
However, we do have all past soil and rock-chip sample results plus preliminary
maps from geologic mapping.

We commenced field exploration work on our Hannah property
during the first quarter of 2005. The field work included obtaining soil samples
as part of a soil sampling program. Results from 132 new soil samples were
combined with results from 50 previous samples to define a conspicuous soil gold
anomaly approximately 3000 feet in length and locally over 500 feet in width. We
believed that this identified anomaly warrants more advanced exploration. As a
result, we submitted a Notice of Intent to Operate and a Reclamation Bond for
drilling 10 exploration holes to the U.S. Bureau of Land Management (the BLM).
The BLM approved our submission and we commenced track-mounted,
reverse-circulation drilling on identified gold geochemical targets in May. This
drilling program was completed in early June. Eleven (11) holes were completed
for a total footage of 4,815 ft. Two holes, H-11 and H-1, encountered
encouraging gold-silver mineralization in the western portion of the target
area. Although strong alteration was encountered elsewhere to the east, the
remaining holes were barren.

We have determined that follow up drilling is warranted on the
Hannah Property based on the results of the initial eleven hole drilling program
that we completed on the Hannah Property, as described above.

Our plan of exploration for the Hannah Property is as
follows:

Description of Phase of
      Exploration
    Description of Exploration Work
      RequiredPediment Electromagnetic Survey
    Conduct geophysical survey in pediment covered area west
      of mineralized breccia to identify the trace of target zone.Phase 2 Exploration Drilling
    Drill ten shallow reverse-circulation drill holes to test
      the breccia zone and possible extensions under pediment gravels. Estimate
      4000 ft of drilling.


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Description of Phase of
      Exploration
    Description of Exploration Work RequiredBottle-Roll Metallurgical Tests
    Conduct several bottle-roll metallurgical tests
      conducted on as received drill cuttings from mineralized zones.Data Evaluation
    Evaluate drilling and metallurgical results.


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

Stage of Exploration
    Anticipated Timetable for
      Completion
    Estimated Cost of
      CompletionPediment Electromagnetic Survey
    3rdQtr
    $20,000Phase 2 Exploration Drilling
    3rdQtr
    $130,000Bottle-Roll Metallurgical Tests
    3rdQtr
    $1,500Data Evaluation
    4thQtr
    $7,500


All work will be conducted on our behalf by contractors who
will anticipate will include a project geologist, Zonge Geoscience for the
electro-magnetic survey, a local bulldozer operator for site preparation and
reclamation, and a drilling company. Cost estimate for a contract geologist is
$375 per day plus travel expenses. No contracts have been let. Normal industry
rates are expected for the geophysical survey, site preparation and reclamation,
and reverse-circulation drilling. The program will be supervised by our
vice-president of exploration.

In addition, we will continue our efforts to locate a joint
venture partner to share the costs of exploration of the Hannah Property.

5.          
Geology

The Hannah Property lies in exotic metamorphic terrain
comprised of Triassic metavolcanics and various Tertiary intrusive rocks and
lakebeds (no formation names). A highly oxidized, gold-bearing shear zone cuts
the metavolcanics and extends in an east-west direction across the southern
portion of the claim block. The trace of the fault zone is uncertain but it is
believed to dip to the north and may be up to 100 ft in thickness. The fault is
locally exposed as a conspicuous, iron-stained, bleached breccia zone that
extends to the west under pediment gravels.

JDS PROPERTY, EUREKA COUNTY, NEVADA

1.          
Location and Access

The JDS property is located in central Nevada, approximately 40
miles northwest of the small town of Eureka in Eureka County. The property is in
Denay Valley adjacent to the northern end of the Simpson Park Mountains. Access
is fair to good during good weather via the Tonkin Road (dirt/gravel) that
traverses through the property. A map showing the location of and access to the
JDS property is presented below:

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2.          
Ownership Interest

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). We staked and recorded the mineral claims. 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. We must pay approximately $12,500 in BLM
and Eureka County annual claim maintenance fees by September 1, 2006 in order to
maintain our interest in these properties.

3.          
History of Operations

There have been no previous operations of any type on the
property.

4.          
Present Condition of the Property and Current State of Exploration

No significant exploration has been conducted on the JDS
Property. The property is in early stage exploration and presently contains no
known gold resources.

There is no plant or equipment on the JDS Property. The
property consists of barren land with no improvements.

We have one geologic report on the JDS Property that was
written by Kenneth D. Cunningham, Wyoming Professional Geologist PG-1636, and
dated February 9, 2004. The report reviews the potential for Carlin-type gold
deposits on the JDS Property.

During the first quarter of 2005, we interpreted newly acquired
geophysical data that corroborated the presence of a possible large intrusive
body or dike swarm along the north-western perimeter of the claim block. We
believe that this is a favorable geologic environment for gold
mineralization.

During 2005, we conducted a mercury soil gas survey across the
northwest portion of the JDS Property. The survey consisted of 240 samples in
eight lines with 50-meter sample stations. A strong soil gas

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anomaly was identified. Subsequently, a detail gravity line was
surveyed across the soil gas anomaly area. The gravity data revealed a
conspicuous structural bedrock platform buried under gravels. Regional gravity
interpretations indicate intersecting faults in the subsurface platform.

Based on the results of this geological survey, we plan to
complete a drilling program on the JDS Property.

Our plan of exploration for the JDS Property is as follows:

Description of Phase of
      Exploration
    Description of Exploration Work RequiredPhase 1 Drilling
    Drill three reverse-circulation holes to test the mercury
      soil gas anomaly. Estimated total footage: 3,000 to 4,000 ftData Evaluation
    Evaluate drill data


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

Stage of Exploration
    Anticipated Timetable for
      **Completion**
    Estimated Cost of CompletionPhase 1 Drilling
    Second and third quarter of 2006
    $150,000Data Evaluation
    Third quarter of 2006
    $7,000


All work will be conducted on our behalf by contractors who
will include a project geologist and a drilling company. Cost estimate for a
contract geologist is $375 per day plus travel expenses. To date, no bids have
been solicited from drilling companies; normal industry rates are expected for
reverse-circulation drilling. The program will be supervised by our
vice-president of exploration.

We plan to seek a joint venture partner to help finance further
exploration of the property, including the contemplated drilling program
described above. There is no assurance that we will be able to locate a joint
venture partner to fund the contemplated drilling program on the JDS property.
If we are unable to enter into any joint venture arrangement, then we will
proceed with the drilling program provided we have sufficient funding.

5.          
Geology

The JDS Property lies within the Cortez Trend in the southern
portion of the Battle Mountain-Eureka Mineral Belt. Although covered by valley
fill, the geology of the JDS Property is believed to be an extension of
favourable lower plate rocks of the Roberts Mountains Thrust that are known to
host large Carlin-type gold deposits. Potential Devonian host rocks are exposed
in the nearby Simpson Park Mountains and are believed concealed under shallow
cover at JDS. Similar Devonian strata host very large gold deposits at Pipeline
and Cortez to the northwest of the JDS Property. Available gravity data at JDS
suggest shallow depth to bedrock and north-trending faults that converge in the
northwestern portion of the claim block. The combination of favourable lower
plate bedrock and converging faults indicate exploration potential for
Carlin-type gold deposit(s). A strong mercury soil gas anomaly has also been
identified in the northwest portion of the JDS Property.

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JENNY HILL PROPERTY, MINERAL & NYE COUNTIES,
NEVADA

1.          
Location and Access

The Jenny Hill Property is located in west-central Nevada
approximately 16 miles due west of the small town of Gabbs in the Black Hills
portion of the southern Monte Cristo Mountains. The claims are in Mineral and
Nye Counties. Access to the property is via paved State Highway 361 south of
Gabbs to the Rawhide Road (dirt) that extends westerly to the vicinity of the
southern tip of the Black Hills. A map showing the location of and access to the
Jenny Hill property is presented below:



2.          
Ownership Interest

The Jenny Hill project is comprised of ninety-seven (97)
unpatented lode claims covering approximately 1,940 acres (3.03 sq miles) in
Mineral and Nye Counties, Nevada. These mineral claims are held by us subject a
lease with option to purchase agreement dated September 15, 2004 between us and
Larry and Susan McIntosh of Gardnerville, Nevada. The Agreement is a binding
letter agreement that governs pending the execution of a definitive agreement.
We are presently negotiating a definitive mining lease with option to purchase
agreement with the owners, as contemplated in the letter agreement.

We have the option to acquire a 100% interest in the Jenny Hill
project, subject to a net smelter royalty, by making aggregate payments to the
owners in the amount of $1,500,000. We may exercise this option at any time
prior to the seven year anniversary of the effective date of the agreement,
being September 28, 2011. We are obligated to make the following required
advance royalty payments, each of which may be credited towards the exercise
price of the option, pending the exercise of option as lease payments:

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Date of Payment
    Amount of Advance Royalty PaymentSeptember 28, 2004
    $7,000 (paid)September 28, 2004
    $13,000 (paid)September 28, 2005
    $25,000 (paid)September 28, 2006
    $30,000September 28, 2007
    $60,000September 28, 2008
    $70,000September 28, 2009
    $80,000September 28, 2010
    $90,000September 28, 2011
    $1,125,000


We are obligated to complete exploration work on the property
in the minimum amount of $50,000 by September 28, 2005 and $100,000 in each
successive year of the term of the agreement. We have completed the initial
$50,000 of exploration work that was required to be completed by September 28,
2005. We are also obligated to make all federal and county claim maintenance
fees in a timely manner to keep the claims in good standing.

We have the exclusive right to conduct exploration on the Jenny
Hill property, provided that we make the required advance royalty payments and
complete the required exploration expenditures. In the event that we do not make
the required advance royalty payments or complete the required exploration
expenditures, then the owners will be entitled to terminate the agreement and we
will lose our interest in the property. However, we will not have any obligation
to make further advance royalty payments or payments in lieu of exploration
expenditures in the event of termination due our inability to make the required
advance royalty payments or complete the required exploration expenditures. We
may surrender our interest in the property and terminate the agreement at our
election upon written notice to the owners. In this event, the owners will
retain all payments and royalties paid pursuant to the agreement.

In the event that mineral production is commenced on the
property, we will be obligated to pay to the owners a 2% net smelter return
royalty. The definition of net smelter returns is to be agreed upon in the
definitive agreement. We have the right of first refusal to purchase any
interest in the property should the owners determine to sell any interest in the
property. The owners have also granted to us an area of interest of
approximately 1 mile surrounding the Jenny Hill claims. Under this right, any
additional mineral claims acquired by the owners that are contiguous or within
one mile of the Jenny Hill claims will be subject to our lease and option to
purchase agreement.

We are presently proceeding with the preparation of a final
definitive agreement between ourselves and the owners which will supersede the
September 28, 2005 letter agreement. We have agreed to pay 50% of attorney fees
for preparation of this final agreement. We anticipate that the agreement will
be completed during the second quarter of 2005.

We completed the payment of $12,983 for BLM and County annual
claim maintenance fees that were required to be paid by September 1, 2005. In
addition, we must pay $30,000 to the owners and complete at least $100,000 in
exploration work on the Property by September 28, 2006.

We executed a letter of intent to joint venture the Jenny Hill
property with Kinross Gold Corporation on December 9, 2005. Under the terms of
the letter agreement, Kinross is obligated to keep the property in good standing
with the BLM and local counties and will make the underlying payments to the
owner.

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Upon completing $3.0 million in work expenditures on the
property, Kinross will have earned a 60% interest in the property and a joint
venture will be formed between us and Kinross. At Kinross discretion, Kinross
may earn an additional 10% interest by producing a feasibility study on the
project. Upon the joint venture reaching a positive construction decision for a
mine, Kinross will have the option earn an additional 5% interest by arranging
financing instruments on our behalf. Kinross may earn a total interest of 75% in
the Property, in which event we would hold a 25% interest. If Kinross elects to
drop the property before July 1 in any given year, the lease payment obligations
and government claim holding costs shall revert back to us.

3.          
History of Operations

There are abundant old gold workings and prospect pits on the
Jenny Hill property and remnants of a small mill in the Black Hills dating back
to the 1880s. Minor gold production also came from the Black Hills by local
prospectors in the 1960s. Comaplex Minerals and NDT Ventures were independently
active on the southern portion of the claim block in 2000-2004. To date, 303
soil samples and 377 rock-chip samples have been collected and analyzed yielding
conspicuous gold. Comaplex Minerals completed 39.14 line miles of ground
magnetometer survey (contractor Zonge Geosciences, Inc.) on the southern portion
of the claim block. We acquired our interest in the Jenny Hill Property in
October 2004.

4.          
Present Condition of the Property and Current State of Exploration

The Jenny Hill Property is in the early stage of exploration
and presently contains no known gold or silver resources. Our current state of
exploration consists of geologic mapping and sampling.

There is no plant or equipment on the Jenny Hill Property other
than some scattered remnants of past prospecting and mining activities in the
Black Hills. The property consists of barren land with no improvements other
than a well-maintained county dirt road.

Jenny Hill is an early-stage exploration property. There are no
formal geologic reports available at this time. However, we do have copies of
all past soil and rock-chip sampling data including maps and results. Most
sample analyses were conducted by ALS Chemex. We also have access to the ground
magnetometer survey report by Zonge Geosciences, Inc. that was conducted on
behalf of Comaplex Minerals.

We staked eighty-five (85) new lode claims during the first
quarter of 2005 in order to expand the Jenny Hill property to cover additional
property that we believe is prospective for gold exploration. We now control 182
contiguous lode claims that cover approximately 3,640 acres. We initiated
limited field exploration work during our first quarter of 2005 which consisted
largely of reconnaissance sampling on the newly acquired ground and detail
geologic mapping and sampling in the northern portion of the claim block.

We initiated a large, GPS-based, ground magnetometer survey in
late April 2005. The survey was completed by a Reno-based geophysical contractor
in early May. The survey was conducted to help identify structures related to
mineralization and skarn. The magnetometer lines were combined with a previous
survey (same contractor) for a total of 68 lines on approximately 100 meter
spacing for a total of 105 line-kilometers of data acquisition. The entire claim
block is now covered by the magnetometer survey. Subsequent data was interpreted
by a certified, Reno-based geophysicist who produced maps showing structure,
geologic units, and mineral targets. These data will be used with newly acquired
soil geochemical data to help identify drill targets.

Six gravity meter lines and one tie line were also surveyed by
the same contractor on the northern portion of the claim block. The survey was
conducted to identify depth to bedrock in covered areas and also to help
identify concealed structures and rock types. Data interpretation remains in
progress. This portion of the claim block has potential for Carlin-type gold
hosted in Triassic sedimentary rocks.

We have completed our geophysical programs and are continuing
geologic mapping with the objective of identifying drill targets.

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Our for the Jenny Hill Property is to minor the explorationwork
to be conducted by Kinross Gold Corporation during 2006. We understand that
Kinross will undertake the following exploration activities during 2006, with a
minimum anticipated expenditure amount of $200,000:

Description of Phase of
      Exploration
    Description of Exploration Work
      RequiredGeologic Mapping & Sampling
    Continue mapping and sampling programTarget Identification
    Compile all data and identify high-priority
      gold targetsPhase 1 Drilling
    Drill targets  Specifics unknown at this timeData Evaluation
    Evaluate drill data


5.          
Geology

The Jenny Hill Property is located along the eastern margin of
the northwest-trending Walker Lane Mineral Belt. Bedrock consists of a mass of
Jurassic granitic rock resting on a thrust fault, Cretaceous (?) dikes and
sills, and sedimentary strata of Triassic Luning Formation. Potential for a
Carlin-type gold deposit(s) is present in the altered siltstones of the Luning
Formation at the northern end of the claim block. Outcrops yield a Carlin-type
geochemical signature with anomalous gold. Potential for gold-bearing skarn
exists on the southern portion of the claim block where Cretaceous dikes have
cut and altered the Luning Formation adjacent to a large thrust sheet of
Cretaceous granitic rock. Anomalous gold is present at the surface in skarn
exposures. The northern and southern areas of the property appear linked by a
major north-trending fault that may be related to gold mineralization. The
property has never been drilled.

LA BUFA PROPERTY

1.          
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 1040.75 hectares (approximately 2571 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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2.          
Ownership Interest

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
      Expired
      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 concessions were 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 can earn
a 51% interest in the property by undertaking exploration expenditures in the
minimum amount of US$2.0 million over 4 years. This letter of intent has not
been executed by Almaden to date, however we anticipate that this letter of
intent will be executed shortly subsequent to the filing of this Annual Report.
Under this letter of intent, we will be able to earn an additional 9% interest
by undertaking exploration expenditures in the minimum amount of an additional
US$1.0 million over a further 18 months. As consideration, we issued to Almaden
50,000

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shares of our common stock upon signing of the letter of intent
and have agreed to issue to Almaden 60,000 shares on the first anniversary,
70,000 shares on the second anniversary, 80,000 shares on the third anniversary,
90,000 shares on the fourth anniversary, and 100,000 shares upon our electing to
acquire the additional 9% interest. In all, we will be acquire a 60% interest in
the La Bufa property by undertaking $3.0 million in exploration work and issuing
450,000 shares of our common stock to Almaden, with Almaden retaining a 40%
interest.

3.          
History of Operations

Gold was discovered in the Guadalupe y Calvo district in 1835
with extended periods of production up to 1939. The discovered 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
concession. Although the vein system extends beyond the area of the old
workings, little exploration work has been conducted. Asarco drilled two core
holes in the 1970s on La Bufa ground but the drill hole locations and results
remain unknown.

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.

4.          
Present Condition of the Property and Proposed Exploration Program

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 property encompasses the town of Guadalupe y
Calvo. The area of potential gold-silver mineralization lies largely along the
eastern side of the town in low, forested and brushed covered hills.

In 2004, Grid Capital Corporation entered into a joint venture
with Almaden and drilled five angle core holes for 666.15 meters between the
Montecristo and Chipto workings. One hole was lost in historic workings. One
hole encountered gold and silver mineralization. Grid Capital turned the
property back to Almaden in 2005 for unknown reasons. The core remains stored on
the property.

The plan for exploration of the La Bufa Concession is as
follows:

Stage of Exploration
    Anticipated Timetable for
      **Completion**
    Estimated Cost of CompletionConstruct Base Map
    2ndQtr
    $25,000Property Acquisition
    2ndQtr
    $30,000Data Base Management
    2ndQtr
    $10,000Geologic Mapping
    2ndQtr
    $45,000Soil Survey
    2ndQtr
    $45,000Phase 1 Drilling
    3rdQtr
    $225,000Metallurgy
    4thQtr
    $5,000


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Data Evaluation
    4thQtr
    $15,000TOTAL: $ 400,000


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

|1) | Delay in the creation of a Mexican business entity under
      which work must be conducted.
|-- | --------------------------------------------------------------------------------------------
|   |                                                                                             
|2) | Delays in permit approval for drilling.                                                     
|   |                                                                                             
|3) | Limited availability of core rigs in Mexico.                                                
|   |                                                                                             
|4) | Lack of funding                                                                             

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

|1) | Caving ground                                                                   
|-- | --------------------------------------------------------------------------------
|   |                                                                                 
|2) | Lost Circulation                                                                
|   |                                                                                 
|3) | Artesian water                                                                  
|   |                                                                                 
|4) | Stuck drill steel                                                               
|   |                                                                                 
|5) | Drilling in near proximity to the town (special
      compensation, noise, etc.)

The exploration program will be managed on site by Richard
Bybee, P. Geol. State of Wyoming (PG-1505) with extensive experience in Latin
America. The Companys V.P. of Exploration, Jeffrey L. Wilson, P. Geol. State of
Utah, will oversee the project. Additional seasoned geologists will be used as
warranted. No contracts have been let. Potential drilling companies include
Layne, Major, and Dateline. ALS Chemex will likely be the analytical laboratory
utilized.

We will have to comply with the following government regulation
in undertaking exploration of the La Bufa property during 2006.

Description of Government Regulation to
      be Complied With
    Manner and Cost of
      ComplianceBiannual concession payments to the Mexican
      Government in January and July of each year
    Less than US$1,000; payments made
      through Almaden MineralsSet up Mexican Business Entity
    Estimate US$2,500Drill Permitting
    Estimate US$5,000Reclamation
    Estimate US$15,000


5.          
Geology

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

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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 southeastward 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.

GLOSSARY OF TECHNICAL TERMS

Mexico Property:

Term
    DefinitionEpithermal
    Said of a hydrothermal mineral
      deposit formed within 1 km of the surface at temperatures of 50°-200°C,
      occurring mainly as veins.Quartz 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 mined.gpt
    Grams per metric tonneVolcanics
    Generally finely crystalline or glassy igneous rocks
      ejected explosively or extruded at or near the Earths surface through
      volcanic actionDacite
    Fine-grained extrusive volcanic rock with the same
      composition as andesite but having less calcic plagioclase and more quartzAndesite
    A dark to grayish colored, fine-grained extrusive
      volcanic rock that may contain phenocrysts of sodic plagioclase.Angular Unconformity
    Contact between two groups of rocks where the underlying
      rocks dip in a different angle that the younger overlying rocksTuff
    A general term for consolidated volcanic ashArtesian Water
    Ground water under pressureCaving 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 cuttings.Lost Circulation
    The loss of drilling fluids through open faults,
      fractures, and/or permeable rock


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Nevada Properties:

Term
    DefinitionArtesian 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 cuttings.Cove-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 old.Devonian
    Geologic Period referring to rocks 360 to 408 million
      years old.Dikes and sills
    Generally narrow bodies of igneous rock implaced as magma
      along faults across bedding (dike) or along zones parallel to bedding
      (sill).Geochemical 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 features.Geophysical survey
    The systematic measurement of electrical, gravity,
      seismic, magnetic, or other properties as a tool to help identify rock
      type(s), faults, structures and minerals.Golconda thrust
    A major, flat-lying fault that has transposed older rocks
      over younger rocks.Gossanous
    Refers to 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.Gravimeter survey
    A survey using a sensitive instrument that can detect
      density differences in geologic formations.Hematite breccia
    Refers to a rock composed of angular rock fragments with
      conspicuous iron- oxide minerals in the matrix and fractures.Intrusive rock
    Refers to any igneous rock (e.g. granite) that was
      implaced as a magma.Jurassic
    Geologic Period referring to rocks 144 to 208
      million years old.


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**Term**
    DefinitionLost circulation
    The loss of drilling fluids through open faults,
      fractures, and/or permeable rock.Magnetometer survey
    A survey using a sensitive instrument that can detect the
      distortion of the Earths magnetic field by different geologic formations.Mercury 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 old.Permo-Triassic
    Geologic Periods referring to rocks ranging from 208 to
      286 million years old.Reverse-circulation drilling
    A drilling method that minimizes contamination of drill
      cuttings.Roberts Mountains Thrust
    A major, flat-lying fault that has transposed older rocks
      over younger rocks.Rock-chip sampling
    The process of chipping off rock samples from outcrops
      for chemical analysis.Schist
    A metamorphic rock that is highly foliated and readily
      splits into flakes or slabs commonly due to a high content of mica.Skarn deposit
    Mineralization formed at the flanks and in contact with
      intrusive rocks.Stratigraphy
    The sequence of stratified rocks.Subcrop
    Bedrock just below the surface and usually contributing
      weathered rock material to the surficial debris.Tertiary
    Geologic Period referring to rocks ranging in age from
      1.6 to 66.4 million years old.Thrust sheet
    A block of rock underlain by a flat-lying fault that
      originated from compressional forces.Triassic
    Geologic Period referring to rocks 208 to 245 million
      years oldTuff
    Volcanic ash that has been solidified into rock.


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ITEM
3.                LEGAL
PROCEEDINGS.

We currently are not a party to any material legal proceedings
and to our knowledge, no such proceedings are threatened or contemplated.

ITEM
4.                SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We did not submit any matters to our security holders to be
voted upon during our fiscal year ended December 31, 2005.

PART II

ITEM
5.                MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

Shares of our common stock are quoted on the OTC Bulletin Board
under the symbol LGCP. The following table indicates the high and low bid prices
of our common stock during the periods indicated:

QUARTER ENDED
    HIGH BID
    LOW BIDDecember 31, 2005
    $0.27
    $0.15September 30, 2005
    $0.54
    $0.23June 30, 2005
    $0.90
    $0.44December 31, 2004
    $0.51
    $0.31October 30, 2004
    $0.90
    $0.42June 30, 2004
    $0.90
    $0.28March 31, 2004
    $0. 28
    $0.21


The source of the high and low bid information is the NASD OTC
Bulletin Board. The market quotations provided reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not represent actual
transactions.

HOLDERS OF COMMON SHARES

As at February 6, 2006, we had eighty-nine registered holders
of our common stock.

DIVIDENDS

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

|1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                             
|2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      shareholders who have preferential rights superior to those receiving the
      distribution.

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We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

We have reported sales of securities without registration under
the Securities Act of 1933 during our fiscal year ended December 31, 2005 on the
following Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K that
we have filed with the Securities and Exchange Commission.

Report
      Date of Filing with SECQuarterly Report on Form 10-QSB
          for the nine months ended September 30, 2004
      November 21, 2005Current Report on Form 8-K
      March 16, 2005


We have not completed any sales of securities without registration
  pursuant to the Securities Act of 1933 during the fiscal year ended December
  31, 2005 that were not reported on the Quarterly Reports on Form 10-QSB and
  Current Reports on Form 8-K described above.

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ITEM
6.                MANAGEMENTS
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

PLAN OF OPERATIONS

Our plan of operations for the next twelve months is to
continue with the exploration of our Nevada and Mexican mineral properties. Our
planned geological exploration programs are described in detail in Item 2 of
this Annual Report on Form 10-KSB entitled Description of Properties.

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

Name of Property
    Planned Exploration
      Expenditures
    Amounts of Claims
      Maintenance Due
    Amount of Property
      Payment Due
    TotalExploration of Buffalo Valley Property, Nevada
    $Nil (1)
    $Nil (1)
    $Nil (1)
    $Nil (1)Exploration of Hannah Property, Nevada
    $159,000
    $3,075
    $15,000
    $177,075Exploration of JDS Property, Nevada
    $157,000
    $12,500
    $Nil
    $169,500Exploration of Jenny Hill Property, Nevada
    $Nil (2)
    $Nil (2)
    $Nil (2)
    $Nil (2)Exploration of La Bufa Property, Mexico
    $423,500
    (3)
    $Nil
    $423,500Administration -Nevada
    $195,000
    -
    -
    $195,000Administration -Vancouver
    $300,000
    -
    -
    $300,000Total
    $1,234,500
    $15,575
    $15,000
    $1,265,075


|(1) | We anticipate Agnico Eagle will undertake exploration
      expenditures in the amount of approximately $251,500 on the Buffalo Valley
      property. Further, Agnico Eagle will be required to pay $35,867 to the BLM
      and local counties and $20,000 to the property owner. These exploration
      expenditures are to be undertaken and paid for by Agnico Eagle pursuant to
      our letter of intent to our letter of intent to joint venture the property
      with Agnico Eagle. However, if Agnico Eagle determines to return the
      property to us prior to the time when the property payments and/ or
      maintenance payments are due, then we will be obligated to make the annual
      claim maintenance payments to the BLM and local counties and the property
      payments required to maintain the property in good standing.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(2) | We anticipate that Kinross will undertake exploration
      expenditures in the estimated minimum amount of $200,000 on the Jenny Hill
      property. Further, Kinross will be required to pay $12,983 to the BLM and
      local counties and $30,000 to the property owner. These exploration
      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|    | are to be undertaken and paid for by Kinross pursuant to
      our letter of intent to our letter of intent to joint venture the property
      with Kinross. However, if Kinross determines to return the property to us
      prior to the time when the property payments and/ or maintenance payments
      are due, then we will be obligated to make the annual claim maintenance
      payments to the BLM and local counties and the property payments required
      to maintain the property in good standing.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(3) | Included in Planned Exploration
  Expenditures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

The general and administrative expenses for the year will
consist primarily of professional fees for the audit and legal work relating to
our regulatory filings throughout the year, as well as transfer agent fees,
management fees, investor relations and general office expenses.

We had cash in the amount of $132,806 and working capital in
the amount of $3,457 as of December 31, 2005. Based on our planned expenditures,
we will require a minimum of approximately $1,275,000 to proceed with our plan
of operations over the next twelve months. 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 achieve less than the full amount of financing that we require, we
will scale back our exploration programs on our mineral properties and will
proceed with scaled back exploration plans based on our available financial
resources.

During the next twelve month period, we anticipate that we will
not generate any revenue. Accordingly, we will be required to obtain additional
financing in order to continue our plan of operations. We believe that debt
financing will not be an alternative for funding additional phases of
exploration as we do not have tangible assets to secure any debt financing. We
anticipate that additional funding will be in the form of equity financing from
the sale of our common stock. However, we do not have any financing arranged and
we cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock to fund our exploration
programs. In the absence of such financing, we will not be able to continue
exploration of our mineral claims. Even if we are successful in obtaining equity
financing to fund our exploration programs, there is no assurance that we will
obtain the funding necessary to pursue any advanced exploration of our mineral
claims following the completion of preliminary exploration. If we do not
continue to obtain additional financing, we will be forced to abandon our
properties and our plan of operations.

We may consider entering into a joint venture arrangement 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.

BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

We were incorporated as Braden Technologies Inc. Effective
March 26, 2004, we acquired 100% of the issued and outstanding shares of Lincoln
Gold Corp. by issuing 24,000,000 shares of our common stock. We subsequently
merged with Lincoln Gold Corp. and changed our name to Lincoln Gold Corporation.
Since the acquisition transaction resulted in the former shareholders of Lincoln
Gold Corp. owning the majority of our issued and outstanding shares, the
transaction, which is referred to as a reverse take-over, has been treated for
accounting purposes as an acquisition by Lincoln Gold Corp. of the net assets
and liabilities of Braden Technologies Inc. Under this purchase method of
accounting, the results of operations of Braden Technologies Inc. are included
in these consolidated financial statements from March 26, 2004. Our date of
inception is the date of inception of Lincoln Gold Corp., being September 25,
2003 and our financial statements are presented with reference to the date of
inception of Lincoln Gold Corp.

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RESULTS OF OPERATIONS

Our results of operations for the year ended December 31, 2005
are summarized below:

|                                   |  | Accumulated         |   |  |              |   |  |              |  
|---------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                   |  | For the Period      |   |  |              |   |  |              |  
|                                   |  | September 25,       |   |  |              |   |  |              |  
|                                   |  | 2003                |   |  |              |   |  |              |  
|                                   |  | (Date of Inception) |   |  | Year Ended   |   |  | Year Ended   |  
|                                   |  | To December 31,     |   |  | December 31, |   |  | December 31, |  
|                                   |  | 2005                |   |  | 2005         |   |  | 2004         |  
|                                   |  | $                   |   |  | $            |   |  | $            |  
|Revenue                            |  | -                   |   |  | -            |   |  | -            |  
|Expenses                           |  |                     |   |  |              |   |  |              |  
|Depreciation                       |  | 1,978               |   |  | 1,978        |   |  | -            |  
|Foreign
      exchange loss        |  | 3,790               |   |  | 2,115        |   |  | 1,675        |  
|General and administrative (Note   |  |                     |   |  |              |   |  |              |  
|6(a))                              |  | 2,142,746           |   |  | 730,433      |   |  | 1,407,503    |  
|Impairment loss on mineral         |  |                     |   |  |              |   |  |              |  
|acquisition
      costs            |  |                     |   |  |              |   |  |              |  
|Mineral exploration                |  | 858,652             |   |  | 584,017      |   |  | 263,126      |  
|Total Expenses                     |  | 3,007,166           |   |  | 1,318,543    |   |  | 1,672,304    |  
|Net Loss From Operations           |  | (3,007,166          | ) |  | (1,318,543   | ) |  | (1,672,304   | )
|                                   |  |                     |   |  |              |   |  |              |  
|Other Income (Expense)             |  |                     |   |  |              |   |  |              |  
|Accounts
      payable written off |  | 33,564              |   |  | 33,564       |   |  | -            |  
|Interest income                    |  | 8,414               |   |  | 8,414        |   |  | -            |  
|Interest expense                   |  | (37,028             | ) |  | (17,981      | ) |  | (19,047      | )
|Net Loss                           |  | (3,002,216          | ) |  | (1,294,546   | ) |  | (1,691,351   | )

Both our net loss and exploration expenditures increased
substantially for fiscal 2005 compared to fiscal 2004. These increases are
attributable largely to our increased exploration activities during fiscal 2005,
as described in detail in Item 2 of this Annual Report on Form 10-KSB entitled
Description of Properties. We anticipate that our expenses and net loss will
continue to increase throughout the current fiscal year in comparison with 2005
as a result of our planned exploration activities and as a result of payments
required to maintain our interests in our mineral properties. In addition, we
anticipate continued increased professional fees as we comply with our
obligations as a reporting company under the Securities Exchange Act of 1934. We
anticipate that we will not earn any revenues during the current fiscal year or
in the foreseeable future as we are presently engaged in the exploration of our
mineral properties.

LIQUIDITY AND CAPITAL RESOURCES

Our cash position at December 31, 2005 was $132,806 compared to
$127,785 as of December 31, 2004. We had working capital of $3,457 as of
December 31, 2005 compared to a working capital deficit of $243,959 as of
December 31, 2004.

March 2005 Private Placement Financing

We completed a private placement financing in March 2005 for
net proceeds of $901,240. The private placement financing was comprised of the
issue of an aggregate of 3,145,000 units (each a Unit) at a price of $0.30 per
Unit to an aggregate of 53 purchasers for total proceeds of $943,500. Each Unit
is comprised of one share of common stock and one share purchase warrant (a
Warrant). Each Warrant entitles the investor to purchase one additional share
of common stock for a two year period at a price of $0.40 per share during the
period from the date of issue to the date that is one year from the date of
issue and at a price of $0.50 per share during the period from the date that is
one year from the date of issue to

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the date that is two years from the date of issue. During our
second quarter, we completed the filing of a registration statement with the
Securities and Exchange Commission in order to register the resale by the
investors of the private placement shares and the shares issuable upon exercise
of the warrants.

Plan of Operations

We estimate that our total expenditures over the next twelve
months will therefore be approximately $1,500,000, as outlined above under the
heading Plan of Operations. We anticipate that we will need to raise a minimum
of approximately $1,275,000 in financing to proceed with our plan of operations
over the next twelve months. 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. Given our
plan to scale back our operations if we do not achieve additional financing, we
anticipate that our current cash and working capital will be sufficient to
enable us to sustain our operations and our interests in our mineral properties
for the next twelve months.

Outstanding Convertible Note

We arranged for a $200,000 convertible note during the fiscal
year ended December 31, 2004. On September 15, 2005 we completed an agreement
whereby we repaid $100,000 of the convertible note along with $35,000 accrued
interest and agreed to repay the remaining $100,000 within sixty days. With the
completion of the first payment the convertible note was deemed to be repaid in
full and the ability of the holder to convert the debt into common stock and
share purchase warrants was cancelled. The amount of $100,000 was outstanding as
of December 31, 2005 and remains outstanding.

Going Concern

We have not attained profitable operations and are dependent
upon obtaining financing to pursue any extensive exploration activities. For
these reasons our auditors stated in their report that they have substantial
doubt we will be able to continue as a going concern.

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 stock in order to raise the funds necessary to pursue our
plan of operations and to fund our working capital deficit. Issuances of
additional shares 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.

CRITICAL ACCOUNTING POLICIES

Mineral Property Acquisition Payments and Exploration
Costs

We have been in the exploration stage since our formation on
September 25, 2003 and we have not yet realized any revenues from our planned
operations. We are primarily engaged in the acquisition and exploration of
mining properties. Mineral property acquisition and exploration costs are
expensed as incurred. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property, are

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capitalized. Such costs will be amortized using the unitsof-
production method over the estimated life of the probable reserve. If mineral
properties are subsequently abandoned or impaired, any capitalized costs will be
charged to operations.

Stock Based Compensation

We have elected to apply intrinsic value method of accounting
in accordance with Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees(APB 25). Under the intrinsic value method of
accounting, compensation expense is recognized if the exercise price of our
employee stock options is less than the market price of the underlying common
stock on the date of grant. Stock-based compensation for employees is recognized
on the straight-line basis over the vesting period of the individual options.
Stock options granted to non-employees are accounted for under Statement of
Financial Accounting Standards No. 123 Accounting for Stock-Based
Compensation(SFAS 123), which establishes a fair value based method of
accounting for stock based awards, and recognizes compensation expense based on
the fair value of the stock award or fair value of the goods and services
received, whichever is more reliably measurable. Under the provisions of SFAS
123, companies that elect to account for stock-based awards in accordance with
the provisions of APB 25 are required to disclose pro forma net income (loss)
that would have resulted from the use of the fair value based method under SFAS
123.

Foreign Currency Translation

Our functional and reporting currency is the United States
dollar. Foreign currency transactions are primarily undertaken in Canadian
dollars and are translated into United States dollars using exchange rates at
the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are re-measured at each balance sheet date at the exchange
rate prevailing at the balance sheet date. Foreign currency exchange gains and
losses are charged to operations. We have not, to the date of our September 30,
2005 financial statements, entered into derivative instruments to offset the
impact of foreign currency fluctuations.

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ITEM
7.                FINANCIAL
STATEMENTS

Our audited financial statements, as set forth below, are
included with this Annual Report on Form 10-KSB:

|                                                                                                                                                                             | PAGE
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                                             |     
|Auditors Report -
      Manning Elliot                                                                                                                                      | F-1 
|                                                                                                                                                                             |     
|Auditors Report -
      Amisano Hanson                                                                                                                                      | F-2 
|                                                                                                                                                                             |     
|Consolidated Balance Sheets, December 31, 2005 and 2004                                                                                                                      | F-3 
|                                                                                                                                                                             |     
|Consolidated Statements of Operations for the years ended
      December 31, 2005 and 2004 and for the period from inception (September
      25, 2003) to December 31, 2005 | F-4 
|
|                                                                                                                                                                             |     
|Consolidated Statements of Cash Flows for the years ended
      December 31, 2005 and 2004and for the periods from inception (September
      25, 2003) to December 31, 2005 | F-5 
|
|                                                                                                                                                                             |     
|Consolidated Statements of Stockholders Equity for
      the period from inception (September 25, 2003) to December 31, 2005                                                | F-6 
|
|                                                                                                                                                                             |     
|Notes to Consolidated Financial Statements                                                                                                                                   | F-7 

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Report of Independent Registered Public Accounting Firm

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

We have audited the accompanying consolidated balance sheet
  of Lincoln Gold Corporation as of December 31, 2005, and the related consolidated
  statements of operations, cash flows and stockholders' equity for the year then
  ended. 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 audit. The accompanying balance sheet of Lincoln Gold Corporation as
  of December 31, 2004 and the related statements of operations, cash flows and
  stockholders' deficit for the year then ended and accumulated for the period
  from September 25, 2003 (Date of Inception) to December 31, 2004, were audited
  by other auditors in their report dated April 14, 2005. Those auditors expressed
  an unqualified opinion on those financial statements and included an explanatory
  paragraph describing the substantial doubt about the Company's ability to continue
  as a going concern.

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

In our opinion, the financial statements referred to above
  present fairly, in all material respects, the financial position of Lincoln
  Gold Corporation as of December 31, 2005, and the results of its operations
  and its cash flows for the year then ended in conformity with accounting principles
  generally accepted in the United States.

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

/s/ Manning Elliott LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

March 20, 2006

F-1

---

|**A PARTNERSHIP OF
      INCORPORATED PROFESSIONALS** | **AMISANO HANSONCHARTERED ACCOUNTANTS**
|----------------------------------------------------- | ---------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
  FIRM

To the Stockholders,
  Lincoln Gold Corporation 
  (formerly Braden Technologies Inc.)

We have audited the accompanying balance sheet of Lincoln Gold
  Corporation (formerly Braden Technologies Inc.) (An Exploration Stage Company)
  as of December 31, 2004 and the related statements of operations, stockholders'
  deficiency and cash flows for the year ended December 31, 2004. 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 audit.

We conducted our audit in accordance with the standards of
  the Public Company Accounting Oversight Board (United States of America). 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. We believe that our audit provides
  a reasonable basis for our opinion.

In our opinion, these financial statements referred to above
  present fairly, in all material respects, the financial position of Lincoln
  Gold Corporation as of December 31, 2004 and the results of its operations and
  its cash flows for the year ended December 31, 2004 in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements referred to above have
  been prepared assuming that the Company will continue as a going concern. As
  discussed in Note 1 to the financial statements, the Company is in the exploration
  stage and has no established source of revenue and is dependent on its ability
  to raise capital from shareholders or other sources to sustain operations. These
  factors, along with other matters as set forth in Note 1, raise substantial
  doubt that the Company will be able to continue as a going concern. The financial
  statements do not include any adjustments that might result from the outcome
  of this uncertainty.

|Vancouver, Canada
      April 14, 2005 | “Amisano Hanson”
      Chartered Accountants
|-------------------------------------- | --------------------------------------------



|750 WEST PENDER STREET, SUITE 604
      VANCOUVER CANADA
      V6C 2T7 | TELEPHONE: 604-689-0188
      FACSIMILE: 604-689-9773
      E-MAIL: amishan@telus.net
|---------------------------------------------------------------------- | -------------------------------------------------------------------------------------

F-2

---

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

|                                                                            |  | December 31, |  
|--------------------------------------------------------------------------- |  | ------------ | -
|                                                                            |  | 2005         |  
|                                                                            |  | $            |  
|ASSETS                                                                      |  |              |  
|                                                                            |  |              |  
|Current Assets                                                              |  |              |  
|Cash                                                                        |  | 132,806      |  
|Prepaid expenses and deposits                                               |  | 11,302       |  
|Total Current Assets                                                        |  | 144,108      |  
|Property and Equipment (Note 4)                                             |  | 7,328        |  
|Total Assets                                                                |  | 151,436      |  
|                                                                            |  |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                              |  |              |  
|                                                                            |  |              |  
|Current Liabilities                                                         |  |              |  
|Accounts
      payable                                                      |  | 20,474       |  
|Accrued liabilities                                                         |  | 12,097       |  
|Due to related
      parties (Note 6)                                       |  | 8,080        |  
|Loan payable (Note 7)                                                       |  | -            |  
|Note payable (Note 8)                                                       |  | 100,000      |  
|Total Current Liabilities                                                   |  | 140,651      |  
|Note Payable (Note 8)                                                       |  | -            |  
|Total Liabilities                                                           |  | 140,651      |  
|                                                                            |  |              |  
|Commitments and Contingencies (Note 1 and 5)                                |  |              |  
|                                                                            |  |              |  
|Stockholders Equity (Deficit)                                              |  |              |  
|Common Stock, 100,000,000 shares authorized,
      $0.001 par value,        |  |              |  
|41,865,000 and 38,400,000 shares issued and outstanding,
      respectively |  | 41,865       |  
|                                                                            |  |              |  
|Additional Paid-in Capital                                                  |  | 3,092,488    |  
|                                                                            |  |              |  
|Stock Subscriptions Receivable                                              |  | -            |  
|                                                                            |  |              |  
|Deficit Accumulated
      During the Exploration Stage                      |  | (3,123,568   | )
|Total Stockholders Equity (Deficit)                                        |  | 10,785       |  
|Total Liabilities
      and Stockholders Equity (Deficit)                  |  | 151,436      |  

F-3

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

---

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

|                                             |  | Accumulated         |   |  |              |   |  |              |  
|-------------------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                             |  | For the Period      |   |  |              |   |  |              |  
|                                             |  | September 25,       |   |  |              |   |  |              |  
|                                             |  | 2003                |   |  |              |   |  |              |  
|                                             |  | (Date of Inception) |   |  | Year Ended   |   |  | Year Ended   |  
|                                             |  | To December 31,     |   |  | December 31, |   |  | December 31, |  
|                                             |  | 2005                |   |  | 2005         |   |  | 2004         |  
|                                             |  | $                   |   |  | $            |   |  | $            |  
|Revenue                                      |  | -                   |   |  | -            |   |  | -            |  
|Expenses                                     |  |                     |   |  |              |   |  |              |  
|Depreciation                                 |  | 1,978               |   |  | 1,978        |   |  | -            |  
|Foreign exchange loss                        |  | 3,790               |   |  | 2,115        |   |  | 1,675        |  
|General and
      administrative (Note 6(a)) |  | 2,142,746           |   |  | 730,433      |   |  | 1,407,503    |  
|Impairment loss on mineral
      properties  |  |                     |   |  |              |   |  |              |  
|(Note
      2(h))                            |  | 55,000              |   |  | 55,000       |   |  | -            |  
|Mineral exploration                          |  | 803,652             |   |  | 529,017      |   |  | 263,126      |  
|Total Expenses                               |  | 3,007,166           |   |  | 1,318,543    |   |  | 1,672,304    |  
|                                             |  |                     |   |  |              |   |  |              |  
|Loss From Operations                         |  | (3,007,166          | ) |  | (1,318,543   | ) |  | (1,672,304   | )
|                                             |  |                     |   |  |              |   |  |              |  
|Other Income (Expense)                       |  |                     |   |  |              |   |  |              |  
|Accounts payable written
      off           |  | 33,564              |   |  | 33,564       |   |  | -            |  
|Interest
      income                        |  | 8,414               |   |  | 8,414        |   |  | -            |  
|Interest expense                             |  | (37,028             | ) |  | (17,981      | ) |  | (19,047      | )
|Net Loss                                     |  | (3,002,216          | ) |  | (1,294,546   | ) |  | (1,691,351   | )
|Net Loss Per Share
       Basic and Diluted |  |                     |   |  | (0.03        | ) |  | (0.06        | )
|Weighted Average Shares Outstanding          |  |                     |   |  | 41,079,000   |   |  | 30,228,000   |  

F-4

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

---

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

|                                                         |  | Accumulated         |   |  |              |   |  |              |  
|-------------------------------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                                         |  | For the Period From |   |  |              |   |  |              |  
|                                                         |  | September 25, 2003  |   |  |              |   |  |              |  
|                                                         |  | (Date of Inception) |   |  | Year Ended   |   |  | Year Ended   |  
|                                                         |  | To December 31,     |   |  | December 31, |   |  | December 31, |  
|                                                         |  | 2005                |   |  | 2005         |   |  | 2004         |  
|                                                         |  | $                   |   |  | $            |   |  | $            |  
|Operating Activities                                     |  |                     |   |  |              |   |  |              |  
|Net loss                                                 |  | (3,002,216          | ) |  | (1,294,546   | ) |  | (1,691,351   | )
|Adjustments to reconcile net loss to net
      cash used |  |                     |   |  |              |   |  |              |  
|in
      operating activities:                           |  |                     |   |  |              |   |  |              |  
|Accounts payable written
      off                       |  | (33,564             | ) |  | (33,564      | ) |  |              |  
|Depreciation                                             |  | 1,978               |   |  | 1,978        |   |  | -            |  
|Impairment loss on mineral
      properties              |  | 55,000              |   |  | 55,000       |   |  | -            |  
|Stock-based
      compensation                           |  | 1,145,663           |   |  | 108,000      |   |  | 1,037,663    |  
|Changes in operating assets and liabilities:             |  |                     |   |  |              |   |  |              |  
|Prepaid expenses
      and deposits                      |  | (11,302             | ) |  | (11,302      | ) |  | -            |  
|Account payable and accrued
      liabilities            |  | (36,235             | ) |  | (47,130      | ) |  | 3,820        |  
|Due to related parties                                   |  | 8,080               |   |  | (219         | ) |  | -            |  
|Net Cash Used in Operating
      Activities              |  | (1,872,596          | ) |  | (1,221,783   | ) |  | (649,868     | )
|                                                         |  |                     |   |  |              |   |  |              |  
|Investing Activities                                     |  |                     |   |  |              |   |  |              |  
|Cash acquired
      on acquisition of subsidiary         |  | 68                  |   |  | -            |   |  | 68           |  
|Mineral property acquisition
      costs                 |  | (55,000             | ) |  | (55,000      | ) |  | -            |  
|Purchase of property and
      equipment                 |  | (9,306              | ) |  | (9,306       | ) |  | -            |  
|Net Cash Flows Used
      in Investing Activities        |  | (64,238             | ) |  | (64,306      | ) |  | 68           |  
|                                                         |  |                     |   |  |              |   |  |              |  
|Financing Activities                                     |  |                     |   |  |              |   |  |              |  
|                                                         |  |                     |   |  |              |   |  |              |  
|Advances from related parties                            |  | 4,180               |   |  | -            |   |  | 4,180        |  
|Repayment
      of advances from related parties         |  | (4,180              | ) |  | (4,180       | ) |  |              |  
|Proceeds from loan payable                               |  | 46,000              |   |  | -            |   |  | 46,000       |  
|Repayment
      of loan payable                          |  | (46,000             | ) |  | (46,000      | ) |  | -            |  
|Issuance of note payable                                 |  | 200,000             |   |  | -            |   |  | 200,000      |  
|Repayment
      of note payable                          |  | (100,000            | ) |  | (100,000     | ) |  | -            |  
|Proceeds from issuance of
      common stock/stock       |  |                     |   |  |              |   |  |              |  
|subscriptions received                                   |  | 1,969,640           |   |  | 1,441,290    |   |  | 512,000      |  
|Net Cash Flows From
      Financing Activities           |  | 2,069,640           |   |  | 1,291,110    |   |  | 762,180      |  
|Increase in Cash                                         |  | 132,806             |   |  | 5,021        |   |  | 112,380      |  
|Cash  Beginning
      of Period                         |  | -                   |   |  | 127,785      |   |  | 15,405       |  
|Cash  End of Period                                     |  | 132,806             |   |  | 132,806      |   |  | 127,785      |  
|Non-cash Investing
      and Financing Activities        |  | -                   |   |  | -            |   |  | -            |  
|Supplemental Disclosures                                 |  |                     |   |  |              |   |  |              |  
|Interest paid                                            |  | 35,000              |   |  | 35,000       |   |  | -            |  
|Income tax paid                                          |  | -                   |   |  | -            |   |  | -            |  

F-5

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

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Consolidated Statements of Stockholders Equity (Deficit)
  For the period from September 25, 2003 (Date of Inception) to December 31, 2005
  
  (Expressed in U.S. dollars)

|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   | Deficit     |   |   |            |  
|--------------------------------- |  | ------------ | - | - | ------ | - | - | ------------- | - | - | ---------- | - | - | ----------- | - | - | ---------- | -
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   | Accumulated |   |   |            |  
|                                  |  | Common Stock |   |   | Stock  |   |   | Additional    |   |   | During the |   |   |             |  
|                                  |  | Number of    |   |   |        |   |   | Subscriptions |   |   | Paid-in    |   |   | Exploration |   |   |            |  
|                                  |  | Shares       |   |   | Amount |   |   | Receivable    |   |   | Capital    |   |   | Stage       |   |   | Total      |  
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Balance  September 25, 2003      |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|(Date of Inception)               |  | -            |   | $ | -      |   | $ | -             |   | $ | -          |   | $ | -           |   | $ | -          |  
|Shares issued for cash at $0.001  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|per share                         |  | 850,000      |   |   | 850    |   |   | -             |   |   | -          |   |   | -           |   |   | 850        |  
|Shares issued for cash at $0.01   |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|per share                         |  | 1,550,000    |   |   | 1,550  |   |   | -             |   |   | 13,950     |   |   | -           |   |   | 15,500     |  
|Net loss for the period           |  | -            |   |   | -      |   |   | -             |   |   | -          |   |   | (16,319     | ) |   | (16,319    | )
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2003        |  | 2,400,000    |   |   | 2,400  |   |   | -             |   |   | 13,950     |   |   | (16,319     | ) |   | 31         |  
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Adjustment to number of shares    |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|issued and outstanding as a       |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|result of the acquisition of      |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Lincoln Gold Corp.:               |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Remove shares of
      Lincoln    |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Gold Corp.                        |  | (2,400,000   | ) |   | (2,400 | ) |   | -             |   |   | 2,400      |   |   | -           |   |   | -          |  
|Add shares of Lincoln
      Gold  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Corporation (formerly             |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Braden
      Technologies Inc.)   |  | 11,400,000   |   |   | 11,400 |   |   | -             |   |   | (11,400    | ) |   | -           |   |   | -          |  
|Fair value of shares issued in    |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|connection
      with the         |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|acquisition of Lincoln
      Gold |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Corp.                             |  | 24,000,000   |   |   | 24,000 |   |   | -             |   |   | (4,950     | ) |   | (19,050     | ) |   | -          |  
|Net asset deficiency of legal     |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|parent
      at date of reverse   |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|take-over transaction             |  | -            |   |   | -      |   |   | -             |   |   | -          |   |   | (102,302    | ) |   | (102,302   | )
|Shares issued for cash at $0.50   |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|per share                         |  | 700,000      |   |   | 700    |   |   | -             |   |   | 349,300    |   |   | -           |   |   | 350,000    |  
|Shares issued for cash at $0.30   |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|per share                         |  | 2,300,000    |   |   | 2,300  |   |   | (528,000      | ) |   | 687,700    |   |   | -           |   |   | 162,000    |  
|Stock-based compensation          |  | -            |   |   | -      |   |   | -             |   |   | 1,037,663  |   |   | -           |   |   | 1,037,663  |  
|Net loss for the year             |  | -            |   |   | -      |   |   | -             |   |   | -          |   |   | (1,691,351  | ) |   | (1,691,351 | )
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2004        |  | 38,400,000   |   |   | 38,400 |   |   | (528,000      | ) |   | 2,074,663  |   |   | (1,829,022  | ) |   | (243,959   | )
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Proceeds from stock subscriptions |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|receivable                        |  | -            |   |   | -      |   |   | 528,000       |   |   | -          |   |   | -           |   |   | 528,000    |  
|Shares issued for cash at $0.30   |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|per share, net of issuance costs  |  | 3,145,000    |   |   | 3,145  |   |   | -             |   |   | 898,145    |   |   | -           |   |   | 901,290    |  
|Shares issued for cash at $0.60   |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|per share pursuant to the         |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|exercise of stock options         |  | 20,000       |   |   | 20     |   |   | -             |   |   | 11,980     |   |   | -           |   |   | 12,000     |  
|Shares issued for services at     |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|$0.36 per share                   |  | 300,000      |   |   | 300    |   |   | -             |   |   | 107,700    |   |   | -           |   |   | 108,000    |  
|Net loss for the year             |  | -            |   |   | -      |   |   | -             |   |   | -          |   |   | (1,294,546  | ) |   | (1,294,546 | )
|                                  |  |              |   |   |        |   |   |               |   |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2005        |  | 41,865,000   |   | $ | 41,865 |   | $ | -             |   | $ | 3,092,488  |   | $ | (3,123,568  | ) | $ | 10,785     |  

F-6

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

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|1. | Nature of Operations and Continuance of
        Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company was incorporated in the State
        of Nevada, USA, on February 17, 1999 under the name of Braden Technologies
        Inc. Effective March 26, 2004, the Company acquired 100% of the issued
        and outstanding shares of Lincoln Gold Corp., a private company incorporated
        in the State of Nevada, USA, on September 25, 2003. On April 6, 2004,
        the Company and its subsidiary, Lincoln Gold Corp., merged to form Lincoln
        Gold Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company is an Exploration Stage Company,
        as defined by Statement of Financial Accounting Standard (SFAS)
        No. 7 Accounting and Reporting by Development Stage Enterprises.
        The Companys principal business is the acquisition and exploration
        of mineral resources. The Company has not presently determined whether
        its properties contain mineral reserves that are economically recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These financial statements have been prepared
        on a going concern basis, which implies the Company will continue to realize
        its assets and discharge its liabilities in the normal course of business.
        The Company has never generated revenues since inception and has never
        paid any dividends and is unlikely to pay dividends or generate earnings
        in the immediate or foreseeable future. The continuation of the Company
        as a going concern is dependent upon the continued financial support from
        its shareholders, the ability of the Company to obtain necessary equity
        financing to continue operations and to determine the existence, discovery
        and successful exploitation of economically recoverable reserves in its
        resource properties, confirmation of the Companys interests in the
        underlying properties, and the attainment of profitable operations. As
        at December 31, 2005, the Company has never generated any revenues and
        has accumulated losses of $3,123,568 since inception. These financial
        statements do not include any adjustments to the recoverability and classification
        of recorded asset amounts and classification of liabilities that might
        be necessary should the Company be unable to continue as a going concern.
        These factors raise substantial doubt regarding the Companys ability
        to continue as a going concern.
      As at December 31, 2005, the Company has working capital
        of $3,457. Management plans to complete private placement sales of the
        Company’s shares in order to raise the funds necessary to pursue
        its plan of operation and fund working capital.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-7

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | d)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | e)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | f)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | g)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | h)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | i)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | j)                                                            
|   |                                                               
|   |                                                               

F-8

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

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

F-9

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | n)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | Acquisition of Lincoln Gold Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Effective March 26, 2004, the Company (formerly
        Braden Technologies Inc.) acquired 100% of the issued and outstanding
        shares of Lincoln Gold Corp. by issuing 24,000,000 common shares. Since
        the transaction resulted in the former shareholders of Lincoln Gold Corp.
        owning the majority of the issued shares of Braden Technologies Inc.,
        the transaction, which is referred to as a reverse acquisition,
        has been treated for accounting purposes as an acquisition by Lincoln
        Gold Corp. of the net assets and liabilities of Braden Technologies Inc.
        Under this purchase method of accounting, the results of operations of
        Braden Technologies Inc. are included in these consolidated financial
        statements from March 26, 2004.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Braden Technologies Inc. had a net asset deficiency
        at the acquisition date, therefore, the 24,000,000 common shares issued
        on acquisition were issued at an ascribed value of $Nil with the net asset
        deficiency of $102,302 charged to deficit. Lincoln Gold Corp is deemed
        to be the purchaser for accounting purposes. Accordingly, its net assets
        are included in the consolidated balance sheet at their previously recorded
        amounts.                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Effective March 26, 2004, Braden Technologies
        Inc. changed its name to Lincoln Gold Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The acquisition is summarized as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | Current Assets          | $ | 68       |  
| | ----------------------- | - | -------- | -
| | Current Liabilities     |   | (102,370 | )
| |                         |   |          |  
| | Net Liabilities Assumed | $ | (102,302 | )

F-10

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|4. | Property and Equipment
|-- | ----------------------

| |                               |  |       |  |  |              |  |  | December 31, |  |  | December 31, | 
| | ----------------------------- |  | ----- |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                               |  |       |  |  |              |  |  | 2005         |  |  | 2004         | 
| |                               |  |       |  |  | Accumulated  |  |  | Net Carrying |  |  | Net Carrying | 
| |                               |  | Cost  |  |  | Depreciation |  |  | Value        |  |  | Value        | 
| |                               |  | $     |  |  | $            |  |  | $            |  |  | $            | 
| | Computer hardware             |  | 4,676 |  |  | 902          |  |  | 3,774        |  |  |             | 
| | Computer software             |  | 1,345 |  |  | 616          |  |  | 729          |  |  |             | 
| | Office equipment and fixtures |  | 3,285 |  |  | 460          |  |  | 2,825        |  |  |             | 
| |                               |  | 9,306 |  |  | 1,978        |  |  | 7,328        |  |  |             | 

|5. | Mineral Property Interests
|-- | --------------------------
|   |                           
|   | a)                        
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   | b)                        
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   |                           
|   | c)                        
|   |                           
|   |                           

F-11

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004
  (Expressed in U.S. dollars)

|5. | Mineral Property Interests (continued)
|-- | --------------------------------------
|   |                                       
|   | d)                                    
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   | e)                                    
|   |                                       
|   |                                       
|   |                                       
|   | f)                                    
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       

F-12

---

Lincoln Gold Corporation
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|5. | Mineral Property Interests (continued)                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                 
|   | e)                                                                                                                                                              
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   | f)                                                                                                                                                              
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|   |                                                                                                                                                                 
|6. | Related Party Transactions                                                                                                                                      
|   |                                                                                                                                                                 
|   | a)                                                                                                                                                              
|   |                                                                                                                                                                 
|   | b)                                                                                                                                                              
|   |                                                                                                                                                                 
|7. | Loan Payable                                                                                                                                                    
|   |                                                                                                                                                                 
|   | During the year, the Company repaid the loan
        payable of $46,000, which bore interest at 5% per annum, was unsecured
        and was repayable on demand.

F-13

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|8.  | Note Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | On January 28, 2004, the Company issued a
        $200,000 convertible note with 5,000,000 warrants to purchase common stock
        of the Company at $0.04 per share which expire on January 28, 2006. The
        note carries an interest rate of 10% compounded monthly and is due on
        January 28, 2006. The interest is payable annually with the second year
        interest payment due with the principal amount. The holder can convert
        any portion of the debt to common stock at the value of $0.04 per share
        until January 28, 2006. Warrants can be exercised in minimum amounts of
        1,000 shares at a conversion price of $0.04 per share. In accordance with
        EITF 00-27 “Application of Issue No. 98-5 to Certain Convertible
        Instruments” and EITF 98-5 “Accounting for Convertible Securities
        with Beneficial Conversion Features or Contingently Adjustable Conversion
        Ratios”, there was determined to be minimal fair value related to
        the warrants issued and there was no beneficial conversion feature amount.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | On September 15, 2005 the Company completed
        an agreement whereby the Company repaid $100,000 of the convertible note
        along with $35,000 accrued interest and agreed to repay the remaining
        $100,000 within sixty days. With the completion of the first payment,
        both the conversion of debt to common stock along with the warrants was
        cancelled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|9.  | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10. | Share Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The following table summarizes the continuity
        of the Companys warrants:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                  |  |            |   |  | Weighted | 
| | -------------------------------- |  | ---------- | - |  | -------- | 
| |                                  |  |            |   |  | average  | 
| |                                  |  |            |   |  | exercise | 
| |                                  |  | Number of  |   |  | price    | 
| |                                  |  | shares     |   |  | $        | 
| | Balance, December 31, 2003       |  | -          |   |  | -        | 
| | Issued                           |  | 7,300,000  |   |  | 0.16     | 
| | Balance, December 31, 2004       |  | 7,300,000  |   |  | 0.16     | 
| | Issued                           |  | 3,145,000  |   |  | 0.40     | 
| | Cancelled                        |  | (5,000,000 | ) |  | 0.04     | 
| | Balance, December
      31, 2005 |  | 5,445,000  |   |  | 0.40     | 

F-14

---

Lincoln Gold Corporation 
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|10. | Share Purchase Warrants (continued)                                                    
|--- | ---------------------------------------------------------------------------------------
|    |                                                                                        
|    | As at December 31, 2005 the following share purchase
        warrants were outstanding:

| | Number of |  | Exercise |  |                                                                                
| | --------- |  | -------- |  | -------------------------------------------------------------------------------
| | Warrants  |  | Price    |  | Expiry Date                                                                    
| | 2,300,000 |  | $0.50    |  | December 20, 2006 (the exercise price increased
      from $0.40 in final year)
| | 3,145,000 |  | $0.40    |  | March 10, 2007 (the exercise price increases to $0.50 in the
      final year) 
| | 5,445,000 |  |          |  |                                                                                

|11. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In fiscal 2004, the Board of Directors approved the
        2004 Stock Option Plan for a maximum of 2,500,000 shares available to
        be granted to directors, officers, employees and consultants. The stock
        option exercise price is set at the fair market value of the shares at
        the date of grant. The term of the stock options, once granted, is not
        to exceed ten years. The vesting period of the stock options is set at
        the discretion of the Board of Directors.
      On February 23, 2005, the Board of Directors approved
        the 2005 Stock Option Plan for a maximum of 2,000,000 shares available
        to be granted to directors, officers, employees and consultants. The stock
        option exercise price is set at the fair market value of the shares at
        the date of grant. The term of the stock options, once granted, is not
        to exceed ten years. The vesting period of the stock options is set at
        the discretion of the Board of Directors.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | A summary of the Companys stock option activity
        is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                            | December 31, 2005 |   | December 31, 2004 | 
| | -------------------------- | ----------------- | - | ----------------- | 
| |                            |                   |   | Weighted          | 
| |                            |                   |   | Average           | 
| |                            | Number of         |   | Exercise          | 
| |                            | Options           |   | Price             | 
| |                            |                   |   |                   | 
| | Balance, beginning of year | 2,410,000         |   | $0.60             | 
| | Granted                    | -                 |   | -                 | 
| | Exercised                  | (20,000           | ) | $0.60             | 
| |                            |                   |   |                   | 
| | Balance, end of year       | 2,390,000         |   | $0.60             | 

Additional information regarding options
  outstanding as at December 31, 2005 is as follows:

| |                |  | Outstanding and Exercisable |  | 
| | -------------- |  | --------------------------- |  | 
| |                |  |                             |  | 
| |                |  |                             |  | 
| |                |  |                             |  | 
| | Exercise price |  | Number of                   |  | 
| | $              |  | shares                      |  | 
| |                |  |                             |  | 
| | 0.60           |  | 2,390,000                   |  | 

During the year ended December 31, 2004,
  the Company recorded $1,037,663 for the fair value of stock options granted
  in accordance with SFAS No. 123.

The fair value of stock options granted
  during the year ended December 31, 2004 was estimated using the Black-Scholes
  option pricing model assuming a dividend yield of 0%, expected volatility of
  115%, risk free interest rate of 2.5%, and weighted average expected option
  life of two years. The weighted average grant date fair value of the stock options
  was $0.43 per share.

F-15

---

Lincoln Gold Corporation
  (An Exploration Stage Company) 
  Notes to the Consolidated Financial Statements 
  December 31, 2005 and 2004 
  (Expressed in U.S. dollars)

|12. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Potential benefits of income tax losses are not recognized
        in the accounts until realization is more likely than not. The Company
        has incurred cumulative net operating losses of approximately $1,772,000
        which commence expiring in 2023. Pursuant to SFAS No. 109 the Company
        is required to compute tax asset benefits for net operating losses carried
        forward. The potential benefits of net operating losses have not been
        recognized in these financial statements because the Company cannot be
        assured it is more likely than not it will utilize the net operating losses
        carried forward in future years. During the years ended December 31, 2005
        and 2004, the valuation allowance established against the deferred tax
        assets increased by $415,300 and $199,200, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The components of the net deferred tax asset as at December
        31, 2005 and 2004, and the statutory tax rate, the effective tax rate
        and the elected amount of the valuation allowance are indicated below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                        |  | 2005      |   |  | 2004     |  
| | ---------------------- |  | --------- | - |  | -------- | -
| |                        |  | $         |   |  | $        |  
| | Net Operating Losses   |  | 1,772,000 |   |  | 585,500  |  
| | Statutory Tax Rate     |  | 35%       |   |  | 35%      |  
| | Effective Tax Rate     |  |          |   |  |         |  
| | Deferred Tax Asset     |  | 620,200   |   |  | 204,900  |  
| | Valuation Allowance    |  | (620,200  | ) |  | (204,900 | )
| | Net Deferred Tax Asset |  |          |   |  |         |  

F-16

---

ITEM
8.                CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.

Engagement of Manning Elliott

We engaged Manning Elliott, Chartered Accountants as our
principal independent accountant effective May 4, 2005. We dismissed Amisano
Hanson, Chartered Accountants ("Amisano Hanson") as our principal independent
accountant effective May 4, 2005. The decision to change principal independent
accountants has been approved by our board of directors.

Amisano Hansons report dated April 14, 2005 on the balance
sheets of Lincoln Gold Corporation as at December 31, 2004 and 2003 and the
statements of operations, stockholders' deficiency and cash flows for the year
ended December 31, 2004 and for the periods from inception (September 25, 2003)
to December 31, 2004 and 2003 did not contain any adverse opinion or disclaimer
of opinion, nor was it modified as to uncertainty, audit scope, or accounting
principles.

In connection with the audits of the two fiscal years ended
December 31, 2004 and 2003 and the subsequent interim period through to April
14, 2005, there were no disagreements with Amisano Hanson on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to the satisfaction of
Amisano Hanson would have caused them to make reference thereto in their reports
on our audited financial statements.

We provided Amisano Hanson with a copy of the foregoing
disclosures and requested in writing that Amisano Hanson furnish us with a
letter addressed to the Securities and Exchange Commission stating whether or
not they agree with such disclosures. We received the requested letter from
Amisano Hanson wherein they have confirmed their agreement to our disclosures. A
copy of Amisano Hansons letter has been filed as an exhibit to our Current
Report on Form 8-K filed with the Securities and Exchange Commission on May 10,
2005.

Engagement of Amisano Hanson

We dismissed DeMello & Company, Chartered Accountants
("DeMello & Company") as our principal independent accountant effective
February 14, 2005. We engaged Amisano Hanson, Chartered Accountants as our
principal independent accountant effective February 14, 2005. The decision to
change principal independent accountants has been approved by our board of
directors.

DeMello & Company's report dated February 23, 2004 on the
balance sheets of Braden Technologies Inc. as at December 31, 2003 and 2002 and
the statements of operations, stockholders' deficiency and cash flows for the
years ended December 31, 2003 and 2002 did not contain any adverse opinion or
disclaimer of opinion, nor was it modified as to uncertainty, audit scope, or
accounting principles.

In connection with the audits of the two fiscal years ended
December 31, 2003 and 2002 and the subsequent interim period through to February
14, 2005, there were no disagreements with DeMello & Company on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved to the
satisfaction of the DeMello & Company would have caused them to make
reference thereto in their reports on our audited financial statements.

We provided DeMello & Company with a copy of the foregoing
disclosures and requested in writing that DeMello & Company furnish us with
a letter addressed to the Securities and Exchange Commission stating whether or
not they agree with such disclosures. We received the requested letter from
DeMello & Company wherein they have confirmed their agreement to our
disclosures. A copy of DeMello & Companys letter has been filed as an
exhibit to our Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 17, 2005.

ITEM
8A.              CONTROLS
AND PROCEDURES.

As required by Rule 13a-15 under the Securities Exchange Act of
1934 (the Exchange Act), we carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and

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procedures as of December 31, 2005, being the date of our most
recently completed fiscal year. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, Mr. Paul Saxton. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective to ensure that the information required to
be disclosed by us in the reports that we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified by the rules and forms of the Securities and Exchange Commission.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commissions rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Exchange Act
is accumulated and communicated to management, including our Chief Executive
Officer and our Chief Financial Officer, to allow timely decisions regarding
required disclosure.

During our most recently completed fiscal year ended December
31, 2005 there were no changes in our internal control over financial reporting
that have materially affected, or are reasonably likely to affect, our internal
control over financial reporting.

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, the registrants
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrants board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:

|(a) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(b) | 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 of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(c) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      registrants assets that could have a material effect on the financial
      statements.                                                                                                                                              
|
|

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PART III

ITEM
9.                DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT.

Our current executive officers and directors are:

|Name                      | Age | Position                                                                                                     
|------------------------- | --- | -------------------------------------------------------------------------------------------------------------
|                          |     |                                                                                                              
|Andrew F. B. Milligan (1) | 83  | Director and Chairman of the
      Board                                                                     
|                          |     |                                                                                                              
|Paul F. Saxton (1)        | 59  | Director, President,
      Chief Executive Officer, Chief Financial Officer and Chief Operating
      Officer
|
|                          |     |                                                                                                              
|James Chapman             | 52  | Director                                                                                                     
|                          |     |                                                                                                              
|Andrew Bowering           | 46  | Director                                                                                                     
|                          |     |                                                                                                              
|Steven Chi (1)            | 67  | Director                                                                                                     
|                          |     |                                                                                                              
|Jeffrey L. Wilson         | 57  | Vice-President - Exploration                                                                                 

(1) ****Member
of our Audit Committee.

Set forth below is a brief description of the background and
business experience of each of our executive officers and directors for the past
five years:

Paul F. Saxton, President, Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer 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 and our chief financial 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, 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

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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.

Andrew W. Bowering, Director

Mr. Andrew Bowering was appointed as a director of the Company
on August 20, 2004. Mr. Bowering is a corporate administrator with 17 years
experience in the financing and management of exploration, development and
start-up companies. He has held senior executive positions and directorships in
numerous public companies involved in mineral exploration in Canada, the United
States, Mexico and China. Mr. Bowering has directly raised over $25 million for
mineral exploration and development. He has led several large acquisition
programs in Northwest British Columbia, Alberta and Central Mexico. In addition
to mineral exploration activities, Mr. Bowering was a founder and principle of
two publicly traded consumer product companies that operated worldwide. He has
an in-depth knowledge of securities markets, regulatory affairs and
investor/public relations.

From 2000 until 2003 Mr. Bowering was employed as an investor
relations consultant/employee with Doublestar Resources ltd., a mineral resource
company which is publicly traded on the TSX Venture Exchange. Mr. Bowering has
been the President and CEO of Pinnacle Mines Ltd. since 2003. Pinnacle is a
publicly traded exploration, mine development company listed on the TSX Venture
Exchange and has properties in Canada and China.

Steven Chi, Director

Mr. Chi was appointed as a director of the Company on August
20, 2004. Mr. Chi is a professional mining engineer with a career as an
executive of the international mining and construction giant, Washington Group
International (formerly Morrison Knudsen Company). He has traveled and worked
worldwide, including the Americas, Asia and Europe. Mr. Chi currently serves on
the board of administrators for a large lignite mine and power plant complex in
Leipzig, Germany. Mr. Chi has extensive experience in all aspects of mining and
development including gold and precious metals mining and previously served on
the board of NASDAQ-listed MK Gold Company.

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.

We also have consulting relationships with other geologists and
persons that are included in our projects and properties from time to time.

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TERMS OF OFFICE

Our directors are elected to hold office until the next annual
meeting of our shareholders and until their respective successors have been
elected and qualified. Our executive officers are appointed by our board of
directors to hold office until their successors are appointed.

AUDIT COMMITTEE

We have an audit committee of our board of directors comprised
of Andrew Milligan, our chairman, Steven Chi and Paul Saxton, our president,
chief executive officer and chief financial officer. Mr. Saxton is not
independent of our management.

At present, there is no person on our board of directors who
would qualify as an audit committee expert. Accordingly, we anticipate that any
audit committee that is appointed by our board of directors will not include an
audit committee expert unless a new director who can meet these criteria is
appointed to our board of directors.

CODE OF ETHICS

We have presently not adopted a code of ethics due to the fact
that we are in the early stage of our operations and have only recently acquired
our mineral properties. We have received a draft code of ethics prepared by our
legal counsel for our review and consideration. Our board of directors is
currently reviewing this draft code of ethics and anticipates adopting a code of
ethics during the current fiscal year.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than ten percent
of our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file. Based on our review of the copies
of such forms received by us, we believe that during the fiscal year ended
December 31, 2005 all such filing requirements applicable to our officers and
directors were complied with other than the following reports were filed late by
the following persons:

|                                      | Number  | Transactions | Known
      Failures
|------------------------------------- | ------- | ------------ | --------------------
|                                      | Of Late | Not Timely   | To File a Required  
|Name and
      Principal Position     | Reports | Reported     | Form                
|                                      |         |              |                     
|Paul Saxton, President, Director      | None    | None         | None                
|                                      |         |              |                     
|Andrew Milligan, Director             | None    | None         | None                
|                                      |         |              |                     
|James Chapman, Director               | One     | None         | None                
|                                      |         |              |                     
|Steven Chi, Director                  | None    | None         | None                
|                                      |         |              |                     
|Jeffrey Wilson, Vice-President        | None    | None         | None                
|                                      |         |              |                     
|Alexander Holtermann, 10% Shareholder | One     | One          | None                

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ITEM
10.              
EXECUTIVE COMPENSATION.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth compensation information as to
our chief executive officer, Mr. Paul Saxton, for the past three fiscal years.
None of our executive officers earned more than $100,000 during our most
recently completed fiscal year. Mr. Saxton is our named executive officer. No
other compensation was paid to any such officer or directors other than the cash
and stock option compensation set forth below.

SUMMARY
      COMPENSATION TABLEANNUAL
      COMPENSATION
    LONG TERM
      COMPENSATIONName
    Title
    Year
    Salary
    Bonus
    Other Annual
      Compensation
    AWARDS
    PAYOUTS
    All Other Compen-
      sationRestricted Stock
      Awarded
    Options/ SARs *
      (#)
    LTIP payouts ($)Paul Saxton (1)
    President,
      ChiefExecutive Officer,Chief FinancialOfficer and Direcor
    2005 2004
    $34,240(1) $4,500(1)
    0 0
    0 0
    0 0
    0 430,000
    0 0
    0 0


|(1) | Mr. Saxton was appointed as a director and as our
      president, chief executive officer and chief financial officer on March
      26, 2004. We paid a management fee of $4,500 to a private holding company
      of Mr. Saxton during fiscal 2004 and a management fee of $34,240 during
      fiscal 2005.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

STOCK OPTION GRANTS

We did not grant any stock options to any of our executive
officers or directors during our fiscal year ended December 31, 2005.

EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION
VALUES

The following is a summary of the share purchase options
exercised by our directors and officers, including our named executive officers,
during our fiscal year ended December 31, 2005:

AGGREGATED OPTION/SAR EXERCISES DURING THE
      LAST FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR
      VALUESName (#)
    Common
      Shares Acquired on Exercise
    Value Realized ($)
    Unexercised
      Options at Financial Year-End (#)
      exercisable/ unexercisable
    Value of
      Unexercised In-The-Money Options/SARs
      at Financial Year- End ($)
      exercisable/ unexercisablePaul Saxton Director,
      President, Chief Executive Officer and Chief Financial Officer
    NIL
    NIL
    430,000/NIL
    $NIL/$NILAndrew Milligan Director
    NIL
    NIL
    430,000/NIL
    $NIL/$NIL


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AGGREGATED OPTION/SAR EXERCISES DURING THE
      LAST FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR
      VALUESName
      (#)
    Common
      Shares Acquired on Exercise
    Value
      Realized ($)
    Unexercised Options
      at Financial Year-End (#)
      exercisable/ unexercisable
    Value of Unexercised
      In-The-Money Options/SARs at
      Financial Year- End ($) exercisable/
      unexercisableJames Chapman Director
    NIL
    NIL
    200,000/NIL
    $NIL/$NILJeffrey Wilson Vice-President Exploration
    NIL
    NIL
    430,000/NIL
    $NIL/$NIL LONG-TERM INCENTIVE PLANS We do not have any long-term incentive plans, pension plans, or similar compensatory
    plans for our directors or executive officers. EMPLOYMENT CONTRACTS We do not have any employment contracts with any of our officers or directors. ITEM 11.              
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth certain information concerning
    the number of our common shares owned beneficially as of February 6, 2006
    by: (i) each person (including any group) known to us to own more than five
    percent (5%) of our common stock, (ii) each of our directors and by each of
    our executive officers, and (iii) our executive officers and directors as
    a group. Unless otherwise indicated, the shareholders listed possess sole
    voting and investment power with respect to the shares shown.


Title of Class
    Name and Address
      of Beneficial Owner
    Number of Shares of
      Common Stock
    Percentage of Common
      Stock(1)Directors and
      OfficersCommon Stock
    Paul F. Saxton,
      Director, President, Chief Executive Officer and Chief Financial Officer
    5,930,000(2)
    14.0%Common Stock
    Andrew F.B. Milligan, Director
    1,930,000(3)
    4.6%Common Stock
    James Chapman, Director
    900,000(4)
    2.1%Common Stock
    Andrew Bowering, Director
    Nil
    Nil%Common Stock
    Steven Chi, Director
    750,000(5)
    1.8%Common Stock
    Jeffrey Wilson, Vice President
      Exploration
    1,180,000(6)
    2.8%Common Stock
    All Directors and
      Executive Officers as a Group (6 persons)
    10,690,000(7)
    24.7%


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Title of Class
    Name and Address of
      Beneficial Owner
    Number of Shares of Common
      Stock
    Percentage of Common
      Stock(1)5% StockholdersCommon Stock
    Joe Eberhard Dorfstrasse #15
      CH 8903, Birmensdorf Switzerland
    3,000,000 shares Direct
    7.2%Common Stock
    Michael Baybak
      (8) Suite 1200 750 West Pender Street
      Vancouver, B.C.
    2,500,000 shares Indirect
    6.0%Common Stock
    Sprott Asset Management
      Inc.(9)Suite 2700, South Tower, Royal Bank Plaza,
      Toronto, Ontario M5J 2J1 Canada
    3,400,000 shares
    7.8%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on March 24, 2006. As of March 24, 2006, there
      were 41,915,000 shares issued and outstanding.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2) | Consists of 5,500,000 shares held by Mr. Saxton and
      430,000 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | Consists of 1,500,000 shares held by Mr. Milligan and
      430,000 shares that can be acquired by Mr. Milligan upon exercise of
      options to purchase shares held by Mr. Milligan within 60 days of the date
      hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4) | Consists of 700,000 shares held by Mr. Chapman and
      200,000 shares that can be acquired by Mr. Chapman upon exercise of
      options to purchase shares held by Mr. Chapman within 60 days of the date
      hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(5) | Consists of 750,000 shares held by Mr. Chi.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(6) | Consists of 750,000 shares held by Mr. Wilson directly
      and 430,000 shares that can be acquired by Mr. Wilson upon exercise of
      options to purchase shares held by Mr. Wilson within 60 days of the date
      hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(7) | Consists of 9,200,000 shares held by our directors and
      executive officers and 1,490,000 shares that can be acquired by our
      directors and executive officers upon exercise of options to purchase
      shares held by our directors and executive officers within 60 days of the
      date hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(8) | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|(9) | Consists of 1,700,000 shares held by Sprott Asset
      Management Inc. and 1,700,000 shares issuable upon exercise of 1,700,000
      share purchase warrants held by Sprott Asset Management Inc. which are
      exercisable within 60 days hereof.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Control

We are unaware of any contract, or other arrangement or
provision of our Articles or by-laws, the operation of which may at a subsequent
date result in a change of control of our company.

EQUITY COMPENSATION PLAN INFORMATION.

As at December 31, 2005, we had one equity compensation plan
under which our common shares have been authorized for issuance to our officers,
directors, employees and consultants, namely our 2004 Stock Option Plan. Our
2004 Stock Option Plan has not been approved by our shareholders. We do not have
any equity compensation plans that have been approved by our shareholders.

The following summary information is presented for our 2004
Stock Option Plan as of December 31, 2005.

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 Security
      Holders
    Not Applicable
    Not Applicable
    Not ApplicableEquity Compensation Plans Not Approved
      By Security Holders
    2,390,000 Shares of
      Common Stock
    $0.60 per Share
    110,000 Shares


**ITEM
12.**             
**CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**

Except as described below, none of the following persons has
any direct or indirect material interest in any transaction to which we were or
are a party during the past two years, or in any proposed transaction to which
the Company proposes to be a party:

|(A) | any director or officer;                                                                                                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                       
|(B) | any proposed nominee for election as a
director;                                                                                                                                                      
|    |                                                                                                                                                                                                       
|(C) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our common
      stock; or                                              
|    |                                                                                                                                                                                                       
|(D) | any relative or spouse of any of the foregoing persons,
      or any relative of such spouse, who has the same house as such person or
      who is a director or officer of any parent or
subsidiary.

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Acquisition of Lincoln Gold

The following of our directors, officers and 5% shareholders
were issued the number of shares of our common stock set forth below in
consideration of their sale of the number of shares of Lincoln Gold Corp. set
forth below in connection with our acquisition of Lincoln Gold Corp., as more
particularly described the section of this Prospectus entitled Description of
Business.

Name
    Number of Shares of
      Common Stock Issued
    Original Number of Shares of
      Lincoln Gold Corp. held and transferred
    Cost of purchase of Shares
      of Lincoln Gold Corp.Paul Saxton Director, President, Chief Executive
      Officer and Chief Financial Officer
    5,500,000
    550,000
    $5,500Andrew Milligan Director
    1,500,000
    150,000
    $1,500James Chapman Director
    1,500,000 (1)
    150,000
    $1,500Joe Eberhard Dorfstrasse #15 CH 8903, Birmensdorf
      Switzerland
    3,000,000
    300,000
    $3,000Michael Baybak Suite 1200 750 West Pender Street
      Vancouver, B.C.
    2,500,000
    250,000
    $2,500


|(1) | Subsequently transferred 750,000 shares to Jeffrey
      Wilson.
|--- | ----------------------------------------------------------------

Grant of Stock Options

Our directors and officers were granted the options to purchase
shares of our common stock during our fiscal year ended December 31, 2004, as
follows:

Name
    Number of
      Securities Underlying Options
      Granted
    % of Total Options
      Granted to Employees(1)
    Exercise Price (per
      Share)
    Expiration DatePaul Saxton Director, President, Chief
      Executive Officer and Chief Financial Officer
    430,000
    21.4%
    $0.60
    May 25, 2007Andrew Milligan Director
    430,000
    21.4%
    $0.60
    May 25, 2007James Chapman Director
    200,000
    9.9%
    $0.60
    May 25, 2007Jeffrey Wilson Vice-President Exploration
    430,000
    21.4%
    $0.60
    May 25, 2007


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Private Placement of Units

Sprott Asset Management Inc. purchased 1,700,000 units at a
price of $0.30 per unit in December 2004 for an aggregate purchase price of
$510,000. Each unit is comprised of one share of common stock and one share
purchase warrant. Each warrant entitles the investor to purchase one additional
share of common stock for a two year period at a price of $0.40 per share during
the period from the date of issue to the date that is one year from the date of
issue and at a price of $0.50 per share during the period from the date that is
one year from the date of issue to the date that is two years from the date of
issue. We have agreed to file a registration statement with the Securities and
Exchange Commission in accordance with the requirements of the Securities Act of
1933 in order to register the resale by the investor of the shares and the
shares issuable upon exercise of the warrants. We agreed to file the
registration statement within 120 days from the date of completion of the sale
of the units.

Executive Compensation

We paid $34,240 to a company of which Paul Saxton is a director
in respect of management fees payable for the services of Mr. Saxton during
fiscal 2005. We paid management fees of $68,598 to Jeffrey Wilson, our
vice-president of exploration, during fiscal 2005.

**ITEM
13.**             
**EXHIBITS**

The following exhibits are attached to this Annual Report on
Form 10-KSB:

Exhibit Number
    Description of Exhibit3.1
    Articles of Incorporation (1)3.2
    Bylaws, as amended (1)3.3
    Articles of Merger between Braden Technologies Inc. and
      Lincoln Gold Corp. (3)4.1
    Form of Series A Warrant Certificate (7)4.2
    Form of Series B Warrant Certificate (7)4.3
    Form of Subscription Agreement (7)10.1
    Form of Share Purchase Agreement dated March 15, 2004
      between the Company and the U.S. Shareholders of Lincoln Gold Corp.
      (2)10.2
    Form of Share Purchase Agreement dated March 15, 2004
      between the Company and the Non-U.S. Shareholders of Lincoln Gold Corp.
      (2)10.3
    Convertible Note executed by Lincoln Gold Corp. in favour
      of Alexander Holtermann dated January 28, 2004 (3)10.4
    Hercules Joint Venture Agreement dated April 18, 2004
      between the Company and Miranda U.S.A. Inc. and Miranda Gold
      Corp.(3)10.5
    2004 Stock Option Plan (3)10.6
      Letter Agreement
          on Mining Lease Terms for Buffalo Valley Property dated July 9, 2004
          (4)10.7
    Letter Agreement on Mining Lease Terms for the Jenny Hill
      Project dated September 28, 2004 (5)


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Exhibit Number
      Description of Exhibit10.8
      Property Option Agreement
          for the Hannah project between Lincoln Gold Corp. and Larry McIntosh
          and Susan K. McIntosh dated December 24, 2003 (6)10.9
      Property Option Agreement
          for the Lincoln Flat project between Lincoln Gold Corp. and Larry McIntosh
          and Susan K. McIntosh dated December 24, 2003 (6)10.10
      Lincoln Gold Corporation 2005
        Stock Option Plan23.1
      Consent
          of Independent Auditors, Amisano Hanson (8)23.2
      Consent
          of Independent Auditors, Manning Elliott (8)31.1
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant to 18
          U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002 (8)32.1
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant to 18
          U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002 (8)


(1)
    Previously filed with the Securities and Exchange
      Commission as an exhibit to the Registrants Form 10-SB Registration
      Statement originally filed on April 20, 1999, as amended.(2)
    Previously filed as an exhibit to the Companys
      Current Report on Form 8-K filed on March 16, 2004.(3)
    Previously Filed as an Exhibit to the Quarterly Report
      on Form 10-QSB filed May 24, 2004.(4)
    Previously filed with the Securities and Exchange
      Commission as an exhibit to the Companys Form 10QSB originally filed
      August 6, 2004.(5)
    Filed as an Exhibit to the Companys Quarterly Report
      on Form 10-QSB filed November 15, 2004.(6)
    Filed as an Exhibit to the Company's Annual Report on
      Form 10-KSB for the year ended December 31, 2004 filed on April 18,
      2005.(7)
    Filed as an Exhibit to the Company's Amendment No. 1
      to Form SB-2 Registration Statement filed on February 16,
  2006(8)
    Filed as an Exhibit to this Annual Report on Form
      10-KSB for the year ended December 31,
2005.


|ITEM
      14.              
      PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                             
|The following table sets forth information regarding the
        amount billed to us by our independent auditor, Manning Elliott LLP, for
        our fiscal year ended December 31, 2005, and by our previous independent
        auditor, Amisano Hanson, for our last fiscal year ended December 31, 2004:
|
|

Years ended
      December 312004
    2005Audit Fees:
    $7,500
    $[@]Audit Related Fees:
    Nil
    NilTax Fees:
    Nil
    NilAll Other Fees:
    Nil
    NilTotal:
    $7,500
    $[@]


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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.

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SIGNATURES

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

|     | **LINCOLN
      GOLD CORPORATION**                        | 
|---- | --------------------------------------------------------- | 
|     |                                                           | 
|     |                                                           | 
|Per: | /s/ Paul F. Saxton                                        | 
|     |                                                           | 
|     | Paul F. Saxton, President                                 | 
|     | Chief Executive Officer and Chief
      Financial Officer | 
|     | Director                                                  | 
|     | Date: March 31, 2006                                      | 

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

|Per: | /s/ Paul F. Saxton                                                   | 
|---- | -------------------------------------------------------------------- | 
|     |                                                                      | 
|     | Paul F. Saxton, President                                            | 
|     | Chief Executive
      Officer and Chief Financial Officer            | 
|     | (Principal Executive Officer)                                        | 
|     | (Principal Financial Officer and
      Principal Accounting Officer) | 
|     | Director                                                             | 
|     | Date: March 31, 2006                                                 | 
|     |                                                                      | 
|     |                                                                      | 
|Per: | /s/ Andrew Milligan                                                  | 
|     |                                                                      | 
|     | Andrew Milligan                                                      | 
|     | Director                                                             | 
|     | Date: March 31, 2006                                                 | 
|     |                                                                      | 
|     |                                                                      | 
|Per: | /s/ Andrew Bowering                                                  | 
|     |                                                                      | 
|     | Andrew Bowering                                                      | 
|     | Director                                                             | 
|     | Date: March 31, 2006                                                 | 
|     |                                                                      | 
|     |                                                                      | 
|Per: | /s/ James Chapman                                                    | 
|     |                                                                      | 
|     | James Chapman                                                        | 
|     | Director                                                             | 
|     | Date: March 31, 2006                                                 | 
|     |                                                                      | 
|     |                                                                      | 
|Per: | /s/ Steven Chi                                                       | 
|     |                                                                      | 
|     | Steven Chi                                                           | 
|     | Director                                                             | 
|     | Date: March 31, 2006                                                 | 

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