Luna Gold Announces Aurizona Exploration & Condemnation Drilling Programs and Drawdown of US$10 Million Sandstorm Debt Facility
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 24, 2014) - Luna Gold Corp. (TSX:LGC)(LMA:LGC)(OTCQX:LGCUF), ("Luna" or the "Company") is pleased to announce a brownfield exploration program ("Brownfield Exploration") at the Aurizona Gold Mine ("Aurizona") in Brazil. The Brownfield Exploration program initially will be funded by drawing down the final US$10 million from its previously announced secured debt facility (the "Sandstorm Debt Facility") with Sandstorm Gold Ltd. ("Sandstorm"). Including this additional US$10 million Sandstorm loan, the Company's current cash balance is approximately US$34 million plus an inventory of 5,500 ounces in unsold gold bullion at March 31, 2014.
Under this initiative, the Company plans to continue exploration and condemnation drilling in the second half of 2014. The objective of this 3 to 5 year drilling program is to expand resources and reserves, specifically targeting new saprolite mineralization, and to sterilize future footprints for plant expansion, tailings and waste storage areas. Results of the drilling program will assist in the determination of the next steps for the Phase I and Phase II expansion scenarios.
The Brownfield Exploration drilling program will target new mineralization in several near mine areas as well as an expansion of resources and reserves through step-out drilling at the Piaba, Boa Esperança, Conceição and Ferradura gold deposits. The drilling program will focus on saprolite mineralization along strike from these deposits and new saprolite mineralization east-southeast of Piaba within the Micote-São Lourenço trend and basin area. A detailed map of Aurizona Gold Mine deposits, targets and areas to condemn can be found on Luna's website at www.lunagold.com.
The Company intends to spend approximately US$6 million in 2014 on these initiatives, including the acquisition of three new multi-purpose drill rigs.
The Sandstorm Debt Facility matures on June 30, 2017, carries an interest rate of 12% per annum and is guaranteed by Luna and its subsidiary Mineração Aurizona S.A. Under the terms of this agreement, Luna will have an interest free period of up to 16 months on the portion of the Sandstorm Debt Facility that funds brownfield exploration.
About Luna Gold Corp.
Luna is a gold production company engaged in the operation, expansion, and exploration of gold projects in Brazil.
On behalf of the Board of Directors
Geoff Chater - President and CEO
Website: www.lunagold.com
Forward-Looking Statements
This release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements include, but are not limited to, statements with respect to future gold production and/or the results of analysis on gold production and/or changes to exploration drilling programs. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Luna Gold Corp.'s periodic filings with Canadian Securities Regulators. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other exploration data, the potential for delays in exploration or development activities, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties with or interruptions in production and operations, fluctuating metal prices, unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, regulatory restrictions, including environmental regulatory restrictions and liability, competition, loss of key employees, and other related risks and uncertainties. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.