Lincoln Gold Mining : 2023 Interim Financial Statements and MD&A as of June 30, 2023

LINCOLN GOLD MINING INC.

UNAUDITED CONDENSED INTERIM

CONSOLIDATED FINANCIAL STATEMENTS

for the six months ended June 30, 2023

Table of Contents
Notice to Reader	3
Condensed Interim Consolidated Statements of Financial Position	4
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	5
Condensed Interim Consolidated Statements of Cash Flows	6
Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency	7
Notes to the Condensed Interim Consolidated Financial Statements	8

Notice to Reader

Management has prepared the unaudited condensed interim consolidated financial statements for Lincoln Gold Mining Inc. (the "Company") in accordance with National Instrument 51-102 released by the Canadian Securities Administration. The Company discloses that its auditors have not reviewed the unaudited consolidated interim financial statements for the six-month period ended June 30, 2023.

LINCOLN GOLD MINING INC.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

As at June 30, 2023 and December 31, 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

		June 30,	December 31,
	Notes	2023	2022
Assets		$	$
Current assets
Cash		13,275	18,279
Receivables	12	5,043	12,229
Prepaid expenses		3,507	1,377
Non-current assets		21,825	31,885
Equipment	4	22,848	29,041
Right-of-use asset	5	13,985	41,954
Deposits		12,250	12,250
Mineral properties	6	874,467	870,380
		923,550	953,625
Total assets		945,375	985,510
Liabilities and shareholders' deficiency
Current liabilities
Accounts payable and accrued liabilities	7	736,236	755,228
Due to related parties and former related parties	12	692,384	1,559,855
Lease liability	9	15,409	45,099
Loans payable	10	92,943	101,958
Promissory notes	11	821,265	998,479
Non-current liability		2,358,237	3,460,619
Provision for environmental rehabilitation	8	86,060	88,036
Total liabilities		2,444,297	3,548,655
Shareholders' deficiency
Share capital	13	30,424,451	26,964,223
Capital reserves	13	6,705,039	3,404,250
Deficit		(38,628,412)	(32,931,618)
Total shareholders' deficiency		(1,498,922)	(2,563,145)
Total liabilities and shareholders' deficiency		945,375	985,510

Nature of operations (Note 1)

Approved and authorized by the Board on August 28, 2023.

"Paul Saxton"	Director	"Andrew Milligan"	Director
Paul Saxton		Andrew Milligan

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

4

LINCOLN GOLD MINING INC.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Unaudited)

For the three and six months ended June 30, 2023 and 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

	Notes		Three		Three		Six		Six
			months		months		months		months
			ended		ended		ended		ended
			June 30,		June 30,		June 30,		June 30,
			2023		2022		2023		2022
Exploration expenses	6, 12	$	(46,733)	$	(42,097)	$	(94,046)	$	(91,444)
Administrative expenses
Consulting and management fees	12		250,930		43,350		331,110		83,460
Depreciation	4, 5		17,081		17,080		34,162		34,161
Foreign exchange loss (gain)			(33,199)		56,672		(26,064)		29,050
Investor relations and shareholder
services			5,250		10,420		24,976		14,014
Office maintenance			21,656		16,787		43,414		47,162
Professional fees	12		12,910		29,014		39,217		40,098
Travel			5,905		1,835		12,677		1,876
Other items			(280,533)		(175,158)		(459,492)		(249,821)
Interest expense	7, 10, 12		(23,282)		(38,106)		(62,276)		(77,194)
Loss on settlement of debt	11, 13		(5,080,980)		-		(5,080,980)		-
			(5,104,262)		(38,106)		(5,143,256)		(77,194)
Loss and comprehensive loss
for the period		$	(5,431,528)	$	(255,361)	$	(5,696,794)	$	(418,459)
Basic and diluted loss per
common share		$	(1.30)	$	(0.07)	$	(1.41)	$	(0.11)
Weighted average number of common
shares outstanding - basic and
diluted			4,192,248		3,846,788		4,030,186		3,833,207

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

5

LINCOLN GOLD MINING INC.

Condensed Interim Consolidated Statements of Cash Flows (Unaudited)

For the six months ended June 30, 2023 and 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

	2023	2022
CASH FLOWS USED IN OPERATING ACTIVITIES	$	$
Loss for the period	(5,696,794)	(418,459)
Items not affecting cash:
Accrued interest expense	62,276	77,194
Depreciation	34,162	34,161
Loss on settlement of debt	5,080,980	-
Unrealized foreign exchange	(2,531)	11,112
Changes in non-cash working capital items:
Increase in accounts payable and accrued liabilities	142,977	30,147
Increase in due to related parties	117,170	160,994
(Increase) decrease in prepaid expenses and deposits	(2,130)	4,655
Decrease in receivables	7,186	13,324
Net cash used in operating activities	(256,704)	(86,872)
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of mineral properties	(4,087)	-
Net cash used in investing activities	(4,087)	-
CASH FLOWS FROM FINANCING ACTIVITIES
Warrants exercised	-	13,480
Share subscriptions received in advance	-	8,000
Loans received	313,820	51,400
Loans paid	(26,700)	-
Payment for lease liability	(31,333)	(30,652)
Net cash provided by financing activities	255,787	42,228
Net change in cash for the period	(5,004)	(44,644)
Cash, beginning of the period	18,279	47,058
Cash, end of the period	13,275	2,414

Supplemental cash flow information (Note 15)

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

6

LINCOLN GOLD MINING INC.

Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency

(Unaudited)

For the six months ended June 30, 2023 and 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

			Share
	Number of		subscriptions	Capital
		received in
	shares	Share capital	advance	reserves	Deficit	Total
		$	$	$	$	$
Balance at December 31, 2021	3,819,474	26,929,743	-	3,404,250	(31,879,354)	(1,545,361)
Shares issued for warrants exercised	168,500	13,480	-	-	-	13,480
Shares issued for mineral interests	300,000	21,000	-	-	-	21,000
Share subscriptions received in advance	-	-	8,000	-	-	8,000
Loss for the period	-	-	-	-	(418,459)	(418,459)
Balance at June 30, 2022	4,287,974	26,964,223	8,000	3,404,250	(32,297,813)	(1,921,340)
Balance at December 31, 2022	3,866,324	26,964,223	-	3,404,250	(32,931,618)	(2,563,145)
Shares issued for debt	9,886,364	3,460,228	-	3,300,789	-	6,761,017
Loss for the period	-	-	-	-	(5,696,794)	(5,696,794)
Balance at June 30, 2023	13,752,688	30,424,451	-	6,705,039	(38,628,412)	(1,498,922)

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

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LINCOLN GOLD MINING INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited)

For the six months ended June 30, 2023 and 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

1 Nature of operations

Lincoln Gold Mining Inc. (the "Company" or "Lincoln") is incorporated under the Business Corporations Act, British Columbia. The Company's head and registered office, principal address and records is Suite 400 - 789 West Pender Street, Vancouver, British Columbia, Canada, V6C 1H2. The Company is a precious metals exploration and development company.

The condensed interim consolidated financial statements of the Company for the six months ended June 30, 2023 comprise the Company and its subsidiaries (Note 2(b)). These condensed interim consolidated financial statements are presented in Canadian dollars and all values are rounded to the nearest dollar except where otherwise indicated. The Company is listed on the TSX Venture Exchange ("TSX-V: LMG") and the Frankfurt Stock Exchange ("ZMG2").

2 Basis of Presentation and Significant Accounting Policies

(a) Basis of preparation

The condensed interim consolidated financial statements for the six months ended June 30, 2023 have been prepared in accordance with IAS 34 - Interim Financial Reporting of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). The condensed interim consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Company's annual consolidated financial statements as at and for the year ended December 31, 2022.

The condensed interim consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

These financial statements were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on August 28, 2023.

Going concern assumption

These consolidated financial statements have been prepared by management on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

The Company has not yet determined whether its mineral properties contain ore reserves and the Company has incurred ongoing losses since inception. Further, the Company has a working capital deficiency of $2,336,412 (December 31, 2022 - $3,428,734) and total liabilities of $2,444,297 (December 31, 2022 - $3,548,655). The future success of the Company is dependent upon the confirmation of economically recoverable reserves, the ability of the Company to obtain necessary financing to successfully complete their exploration and development, and upon establishing future profitable production, or realization of proceeds on disposal.

Management recognizes that the Company will need to raise additional funds to maintain operations and while it has been successful in doing so in the past, there can be no assurance that it will be able to do so in the future. These material uncertainties may cast significant doubt upon the Company's ability to continue as a going concern. These consolidated financial statements do not give effect to the adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

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LINCOLN GOLD MINING INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited)

For the six months ended June 30, 2023 and 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

2 Basis of Presentation and Significant Accounting Policies (Cont'd)

1. Consolidation Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Company has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances, income and expenses on transactions are eliminated. Profits or losses resulting from intercompany transactions that are recognized in assets are also eliminated. Accounting policies of subsidiaries are consistent with the policies adopted by the Company.

The consolidated financial statements include the financial statements of Lincoln Gold Mining Inc., the parent company and the subsidiaries listed below:

		Economic
	Country of Incorporation	interests	Principal activity
Lincoln Gold US Corp.	United States of America	100%	Mineral exploration
Lincoln Resource Group Corp.	United States of America	100%	Mineral exploration
Minera Lincoln de Mexico, S.A. de C.V.	Mexico	100%	Mineral exploration

3 Critical accounting estimates and judgements

The preparation of consolidated financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions concerning the future. Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts include:

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.

Share-based compensation

The Company uses the Black-Scholes option pricing model for valuation of share-based compensation. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate and forfeiture rate. Changes in the input assumptions can significantly change the fair value estimate and the Company's earnings and equity reserves.

Critical judgments exercised in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:

Company's title on mineral property interests

Although the Company has taken steps to verify the title to mineral properties in which it has an interest, in accordance with industry practice for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

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LINCOLN GOLD MINING INC.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

For the six months ended June 30, 2023 and 2022

(All amounts are in Canadian Dollars, unless otherwise stated)

4 Equipment

The following table summarizes the Company's equipment:

Cost	$
48,149
Balance at January 1, 2022
Additions	-
Balance at December 31, 2022 and June 30, 2023	48,149
Accumulated Depreciation
Balance at January 1, 2022	6,723
Depreciation	12,385
Balance at December 31, 2022	19,108
Depreciation	6,193
Balance at June 30, 2023	25,301
Net Book Value
Balance at December 31, 2022	29,041
Balance at June 30, 2023	22,848

5 Right-of-use asset

The following table summarizes the Company's right-of-use asset:

Balance at January 1, 2022

Depreciation

Balance at December 31, 2022

Depreciation

Balance at June 30, 2023

$

97,893

(55,939)

41,954

(27,969)

13,985

6 Mineral properties

The Company's mineral property interests are comprised of the following properties:
	Canada		United
		States	Total
	Shawinigan		Pine Grove
Balance at January 1, 2022	$	$	$
101,000	741,973	842,973
Additions	27,407	-	27,407
Balance at December 31, 2022	128,407	741,973	870,380
Additions	4,087	-	4,087
Balance at June 30, 2023	132,494	741,973	874,467

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