Luna Gold Announces Results for the First Quarter 2015

VANCOUVER, BC--(Marketwired - May 13, 2015) - Luna Gold Corp. (TSX: LGC)(LMA: LGC)(OTCQX: LGCUF) ("Luna" or the "Company") today announced its operational and financial results for the first quarter ("First Quarter") ended March 31, 2015. This news release should be read in conjunction with the condensed consolidated financial statements and the Management's Discussion and Analysis for the quarter ended March 31, 2015.

FIRST QUARTER 2015 HIGHLIGHTS

• Revenue of $25.9 million, including sales to Sandstorm;
• Gold sales and production of 23,216 ounces and 18,790 ounces, respectively;
• Total cash cost of production of $655, All-in sustaining cost of production of $678, All-in cost of $804 per ounce of gold produced;
• Gross profit of $5.8 million;
• Cash flow from operating activities before changes in non-cash working capital of $5.5 million ($0.04 per share); and
• Net loss of $3.4 million ($0.02 per share).

First Quarter 2015 Highlights

Company Developments:

• On May 7, 2015, the Company announced that the Company has entered into a definitive agreement for a C$30.0 million financing by Pacific Road Resources Fund (the "Pacific Road Financing"), consisting of a C$20.0 million debenture and a C$10.0 million private placement equity financing. This proposed Pacific Road Financing is subject to a number of conditions, including (i) a concurrent restructuring of the Company's gold stream and credit facilities with Sandstorm Gold Ltd. ("Sandstorm"), (ii) regulatory approvals, including the approval of the Toronto Stock Exchange, and (iii) the approval of Luna's shareholders in accordance with the policies of the Toronto Stock Exchange. For further details, see the Luna Gold press release dated May 8, 2015;
• On May 7, 2015, the Company entered into a definitive agreement to restructure the Sandstorm Stream Agreement, which includes the termination of the existing gold stream to be replaced by two net smelter return royalties and a convertible debenture (the "Sandstorm Restructuring"). For further details, see the Luna Gold press release dated May 8, 2015;
• In Q1 2015, the Company entered into a forbearance agreement (the "Forbearance Agreement") with Société Générale, Mizuho Bank, Ltd. and the other parties (collectively, the "Finance Parties") to the Company's February 15, 2013 credit agreement, as amended (the "Corporate Facility"), in connection with the Company not being in compliance with certain covenants under the Corporate Facility. Under the terms of the Forbearance Agreement, the Finance Parties will refrain from exercising any rights or remedies that they may have under the Corporate Facility or otherwise in respect of the Company's covenant breach and any subsequent default by the Company until May 15, 2015. The Company expects to receive an extension to this forbearance in order to achieve the Pacific Road Financing;
• In Q1 2015, the Company released an updated NI 43-101 Resource report dated March 27, 2015;
• In Q1 2015, the Company announced the suspension of mining operations at Aurizona and a plan to process the existing ore stockpile through the process plant over the first half of 2015;
• In Q1 2015, the Company announced that the core relogging program of the Piaba resource drill holes resulted in a new geologic model, including the reinterpretation of geology, alteration, oxidation, structure and ore hardness. This new model resulted in a material reduction in the amount of remaining saprolite ore that can be processed through the existing plant. As a result of the new geologic model, the suspension of mining operations and the need for additional capital to restart economical mining activities, the Aurizona existing mineral reserve estimates (effective as of January 29, 2013) contained in its public disclosure and in its last technical report are no longer considered current and should therefore not be relied upon; and
• In Q1 2015, Marc Leduc was appointed to the position of Director, CEO and President of the Company.

AURIZONA GOLD MINE - MARANHAO STATE, BRAZIL

Mining production

The Company suspended mining operations during the quarter ended March 31, 2015. As a result, total material mined (ore and waste) decreased from the comparative quarter of 2014 by 36%.

The Company's primary focus was to extract ore and minimize waste removal prior to the suspension of mining activities. As a result, the Company mined 29% more ore than the comparative quarter of 2014 and reduced waste stripping by 59% from this same quarter. The grade of the ore mined was significantly lower than Q1 2014, but was more in line with the ore body's average gold grade. The ore grade in Q1 2014 was high due to mining a higher than normal grade mineralized zone.

The cost per tonne mined in Q1 2015 was 13% higher than the same quarter in 2014 due to additional costs related to the reduction in the mining workforce and other suspension costs, which was partially offset by positive gains in the BRL:USD exchange rate associated with mining costs.

Mill processing

Gold production continued as planned with the processing of the ore stockpile that was built up in Q4 2014. The Company processed approximately 11% less ore than Q1 2014 at a slightly higher average ore grade. This resulted in total gold production being 3% lower than Q1 2014.

Cash costs of production

The Company's results are subject to seasonal variation, in particular the wet season in Northeastern Brazil. The wet season generally starts in January and continues through June, with the heaviest rainfall normally experienced in the months of March to May. As a result of the wet season, pit access and the ability to mine ore is typically lower in this period than other periods of the year and the unit cost of production are generally higher. To address this issue, the Company mines ore and waste at higher elevations within the pit in the wet season and stockpiles ore in the dry season ahead of the wet season for processing.

The total cash costs of production was 7% lower than Q1 2014 due to lower mining costs, which was partially offset by higher processing cost per unit. Mining cost per ounce was lower in 2015 due to lower waste stripping. Processing cost per ounce was higher than Q1 2014 due to lower ore tonnes processed through the plant and higher consumable costs related to inflation.

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

Luna Gold Corp.
Marc Leduc - 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. 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 mechanical completion and commissioning of the Aurizona Phase I expansion, preparation and delivery of the Aurizona Phase II expansion prefeasibility study, 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.

Contact

For further information contact:
Investor Relations
+1 604 568 7993