La Bufa Property

Summary
The La Bufa Property is a group of concessions which cover most of the Guadalupe y Calvo mining district within the Sierra Madre mineral belt in southwestern Chihuahua State, Mexico.  Lincoln, through its Mexican subsidiary, purchased a 100% interest in the property from Almaden Minerals Ltd. in February 2010.  The district has historic production of 2 million oz gold and 28 million oz silver from the El Rosario mine which is controlled by Gammon Gold.  Lincoln’s land position covers approximately 11 km of the northwest mineral trend.  Past drilling by previous operators and recent drilling by Lincoln have collectively drilled 17 core holes (5,478.00 m) in the southern portion of the district with encouraging results.  The northern portion of the district has received little exploration but has returned ore-grade assays from various surface samples.  Recent work by Lincoln has identified three new target areas (see details in ‘Recent Work’ below).

The Company believes that the district, like others in the trend, has multi-million ounce gold-silver potential with the opportunity for a high-grade underground mine. Plans include continued field work and drilling.

Location
The La Bufa Property lies within the Sierra Madre Occidental in the southwestern portion of the State of Chihuahua.  The property occupies most of the Guadalupe y Calvo mining district which falls within the northwest-trending Sierra Madre mineral belt.  This belt consists of numerous gold and silver mines including Dolores, Mulatos, Ocampo, Pinos Altos, Palmarejo, and El Sauzal.  Access is excellent via paved Highway 24 from Hidalgo del Parral, a mining-based city with a population of 100,000.  The property concessions are adjacent to the small town of Guadalupe y Calvo, which has an estimated population of 25,000.  The town has electrical power from the national grid and a local airstrip is available for small charter and private aircraft.  Logistics are excellent for mining. 

Land
On November 25, 2009, Lincoln Mining announced that it has reached an agreement with Almaden Minerals Inc. (“Almaden”) to purchase 100% of the La Bufa Property, subject to TSX Venture Exchange approval. The new agreement supercedes the previous joint venture agreement that allowed Lincoln to earn a 60% interest in the La Bufa. Under the new agreement, Lincoln will purchase the 100% interest by issuing 6 million Lincoln Mining shares to Almaden and granting a 2% NSR on production from La Bufa. Lincoln will have the option to buy down the NSR by 1% within one year following a decision to place the property into production for a fair market price to be determined by an independent consultant.

Lincoln Mining originally entered into a binding letter agreement with Almaden on the La Bufa Property in 2005 and a joint venture agreement in 2007.  The Company has already spent approximately $1.75 million on the property under the terms of the old agreement. The La Bufa Property covers four concessions (La Bufa, La Bufa 1, La Bufa 2 and El Chapito) encompassing 2,311.1 hectares.  Lincoln finalized the La Bufa purchase agreement in February 2010 and now holds 100% interest in the project.

History
Historical production in the district extended largely from 1834 to 1939 and came mostly from high-grade epithermal quartz breccia veins at the underground Rosario Mine.  Past production is estimated at 2 million ozs gold and 28 million ozs silver with ore averaging 37 gpt (1.08 opt) Au plus 870 gpt (27 opt) Ag with excellent metallurgy.  The ores were so rich that the Mexican government established a mint in Guadalupe y Calvo.  This mint is still present as a museum

Multiple small, underground workings occur along the Santo Niño vein in the southern portion of the La Bufa property.  Historic workings include the Monte Cristo shaft, El Chapito mine, and Santo Niño adit.  All workings are collapsed.

Geology & Mineralization
The geology of the Guadalupe y Calvo district consists of two main groups of volcanic rocks typical of the Sierra Madre Occidental.  The “Lower Volcanics” (38 to 65 million years) are dominated by stocks, flows, and tuffs of mafic to intermediate composition.  The “Upper Volcanics” (25 to 38 million years) are dominated by extrusive flows and tuffs of intermediate to silicic composition and may occur as dikes and small intrusive bodies.  The “Upper Volcanics” are the dominant rock type on the La Bufa Property with erosional windows of “Lower Volcanics” locally exposed on the property.  Lower Volcanic Group rocks are the host to nearly all the major gold-silver deposits found in the Sierra Madre to date. 

Mineralization on the La Bufa is classified as typical low-sulfidation, quartz-adularia epithermal gold-silver veins and is similar to numerous other deposits in the Sierra Madre Occidental.  The mineralized trend strikes northwest in varying intensity.  The veins contain pyrite, arsenopyrite, galena, sphalerite and copper minerals.  The ore minerals are thought to be electrum and argentite.  The southern portion of La Bufa covers at least 1,700 meters of vein system strike.  Multiple quartz veins crop out intermittently and range in thickness from 1 meter to 3+ meters within a complex fault zone up to 70+ meters wide.   The property remains largely unexplored to the north, however, various surface samples have returned ore-grade gold and silver values.

Previous Work
Minor core drilling at La Bufa was conducted in the 1970s and in 2004 by various operators.  Drilling encountered encouraging intercepts in the order of 6 to 9 grams per tonne gold plus 363 to 503 grams per tonne silver. Multiple ore-grade intercepts were encountered in one hole.  These holes were shallow.
In 2005, Lincoln conducted aerial photography over the entire district and produced a high-quality topographic base map. The base map was used for a soil sample survey and detailed geologic mapping over the southern portion of the district vein system. Numerous targets were identified and marked for drill testing.   Previous sampling of the northern portion of the property returned encouraging assays ranging from 1.07 to 4.28 grams per tonne gold and 186 to 838 grams per tonne gold.

In 2008, Lincoln drilled 12 angle core holes for a total of 4,811.85 meters.  Drilling was focused on the southern portion of the property.  Hole depth averaged 400 meters.  The drill holes were widely spaced angle holes focused on the El Rosario gold-silver vein system which extends southward from the historic Rosario Mine onto the La Bufa concessions.  Encouraging results were received from over 300 meters of vein system strike length, which remains open to the northwest towards the adjacent Rosario Mine (held by Gammon Gold) approximately 400 meters away.  Gold-silver mineralization occurs in steeply dripping quartz-breccia veins and stockworks.  Drill results suggest that gold-silver mineralization occurs primarily in the shallower portions of the vein system. 

The table below lists significant intercepts by Lincoln and past operator, Grid Capital.  Intercepts do not represent true thickness.

On February 10, 2009, Lincoln filed an amended and restated NI 43-101 technical report on La Bufa, prepared by Richard W. Bybee, dated January 5, 2009.

The geophysics and claim survey programs that began in December 2009 are progressing as planned.  Two full IP geophysics lines have been completed across the northwest part of the claims and the program will be restarted in January 2010. At least 12 east-west IP lines are planned to better define the northwest trending structure which contains the mineralized veins. The additional IP lines will follow the strike of the structure up to the northwest edge of the La Bufa claims boundary. The geophysics program is being completed so that a drill program planned for 2010 can be better targeted.

On February 10, 2009, Lincoln filed an amended and restated NI 43-101 technical report on La Bufa, prepared by Richard W. Bybee, dated January 5, 2009.

The geophysics and claim survey programs that began in December 2009 are progressing as planned.  Two full IP geophysics lines have been completed across the northwest part of the claims and the program will be restarted in January 2010. At least 12 east-west IP lines are planned to better define the northwest trending structure which contains the mineralized veins. The additional IP lines will follow the strike of the structure up to the northwest edge of the La Bufa claims boundary. The geophysics program is being completed so that a drill program planned for 2010 can be better targeted.

Recent Activity

Over the last 10 months the Company has been actively exploring its 2,311 hectare gold and silver property.  The purpose of the exploration has been to define drill targets and to build a resource base. Past production came mainly from quartz breccia veins. The main mineralized structural zone, which was the source of historical production, trends in a northwesterly direction and carries onto Lincoln Mining’s ground. Almost all of the mineralization in the district is hosted in Lower Volcanics. 

During December 2009, January and February 2010, Lincoln Mining conducted a large geophysical survey totaling 20,000 line-meters. This work was carried out on the northern part of the La Bufa Concession. The geophysical program consisted of both resistivity and chargeability surveys which were followed up by rock-chip sampling. Sampling focused on three target areas which were highlighted by the geophysical survey. Geological mapping was also conducted. Two hundred and thirty-four (234) samples were collected from available outcrops.  Each sample was typically comprised of various rock-chips from a 2 meter x 2 meter area.  Sample spacing was variable, usually tens of meters and based on availability of outcrops and physical access. Samples were sent for assay to Eco Tech Laboratory Ltd. and ALS Chemex Labs Ltd., both certified assayers located in Canada. Quality control was carried out by way of random duplicate assaying and standards that were provided by the labs.  Surface assays produced results up to 20+ grams per tonne gold and over 900 grams per tonne silver (click here to view detailed rock-chip assay table) and go the map gallery to view new target area and cross section maps).

Three large target areas were identified by coincident geophysical and geochemical anomalies. Target Areas 1 and 2 are long brecciated quartz structures which may extend to considerable depth as suggested by their geophysical signatures. Target Area 1 extends for over 1,000 meters as intermittently exposed zones that exhibit locally high silver and gold values. Target Area 2 extends for over 650 meters and exhibits elevated silver values with attending anomalous gold. A third target is also present between the two district structural zones. Target 3 is a heavily altered quartz monzonite porphyry with potential for disseminated stockwork silver-gold mineralization. Target Area 3 appears to be at least 400 meters across with low silver values and locally anomalous gold.

Project Scope & Plans
Lincoln considers the La Bufa concessions to have significant potential. Lincoln’s exploration team believes that the prolific Lower Volcanics offer exceptional potential to host multiple economic gold-silver deposits on the La Bufa property. A drilling program is being prepared to test the three new target areas.