VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/18/13 -- Lincoln Mining Corporation (TSX VENTURE: LMG) ("Lincoln" or the "Company") announces that further to its news releases dated November 22, 2012 and November 28, 2012, the US regulatory authority has completed its review of the Company's United States mineral properties and the previously announced financing transactions involving Procon Mining and Tunnelling Ltd. ("PM&T") and certain of its affiliates, including China National Machinery Industry Corporation ("Sinomach"). Sinomach is a state owned entity of the government of China.
As a result of the regulatory review, the Company, Sinomach, PM&T and its affiliate Procon Resources Inc. ("PRI", and collectively with Sinomach and PM&T, "Procon") are withdrawing a Joint Voluntary Notice filed on April 1, 2013 with the Committee on Foreign Investment in the United States ("CFIUS"), and have transmitted a letter of commitment (the "Letter") to CFIUS.
Pursuant to the Letter, Lincoln and Procon have committed to CFIUS that Procon will, within 120 days after the date of the Order, divest its entire investment in Lincoln to a third party investor that is acceptable to CFIUS. If Procon, after making best efforts to divest its interest in Lincoln, is unable to divest all of its interest within 120 days, Lincoln and Procon can apply for an extension of up to 60 additional days, subject to approval by CFIUS. The Company understands that the terms of the Letter will form the basis of an order to be issued by CFIUS (the "Order").
Sinomach, through its 61% ownership of China CAMCE Engineering Co., Limited ("CAMCE"), indirectly owns 60% of PRI's outstanding common shares. PRI currently holds 46,000,000 common shares (the "Procon Shares") of Lincoln and a convertible debenture in the principal amount of C$2,300,000 (the "Procon Debenture") which is due and payable on November 22, 2015. The Procon Debenture is convertible at any time, in whole or in part at the election of the holder, into up to 23,000,000 common shares of the Company on the basis of one common share for each C$0.10 of principal. The Procon Debenture bears interest at the rate of 6% per annum, calculated and payable monthly, on the outstanding principal amount, and is secured by a general security agreement granted by the Company. The Procon Shares and Procon Debenture were acquired by Procon pursuant to various financings completed by the Company in September and November 2012 (see Lincoln's news releases dated November 22, 2012 and September 13, 2012).
The Letter also provides, among other things, that:
-- Lincoln must give CFIUS advance notice of the intended purchaser(s) of the Procon Shares and the Procon Debenture and the structure of the proposed sale transaction, which will be subject to review and approval by CFIUS; and-- until the divestment has been approved and completed, access to the Company's Bell Mountain, Pine Grove and Oro Cruz properties (collectively, the "US Properties") will be limited and will be subject to the prior approval of specified United States government agencies. The Company will work diligently with such agencies to obtain the necessary approvals so that the Company's US personnel and contractors will be permitted to continue accessing the US Properties to enable the Company to continue its current and planned exploration and development work programs on the properties.