VANCOUVER, Oct. 9 /PRNewswire-FirstCall/ - Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") is pleased to announce that it has finalized the option agreement on the Cachoeira gold project. Following the July 19th press release where Luna announced its successful bid, the Company has been negotiating with the consortium of vendors, led by CNM (a subsidiary of Kinross Brazil), to finalize the terms.
Exploration work will begin immediately with an environmental baseline study to document the current state of the ground disturbance prior to Luna's initiation of ground work, and the compilation of the historic data, including deposit modeling. This will be followed by geologic, geophysical, and geochemical surveys and then drilling.
Tim Searcy, Luna's CEO comments, "There are numerous targets to follow-up on immediately, but, after a history of fragmented ownership, Luna is the first company to have consolidated this entire mineral trend. The Company intends to take advantage of that by reviewing all of the previous work to determine the main controls on the mineralization. This is a great growth project to complement the development work ongoing at Luna's Aurizona project 100 km to the northeast."
Sample results from Luna's due diligence visit to Cachoeira returned indications of high-grade gold mineralization. Two samples from garimpeiro run-of-mill ore returned 24.0 g/t Au and 13.9 g/t Au. Three samples from their tailings returned 20.3 g/t Au, 14.0 g/t Au, and 6.5 g/t Au. This taken together with reports of garimpeiro mining depths of up to 100 m indicates that the mineralization may continue to depths greater than what has been previously drilled. These samples were neither part of, nor alone do they constitute, a statistically representative sampling program. Please refer to the press release of July 19th, 2007 or Luna's website for more complete details on the historic work undertaken at Cachoeira.
Luna has agreed to pay the Vendors Brazilian Reais R$ 500,000 (approximately US$ 260,000) upfront, incur exploration expenditures of R$ 4.0 million in year 1 and R$ 5.4 million in year 2 (approximately US$ 2.1 million and 2.8 million respectively), and provide a royalty on net operating profit of 4%, for which Luna has the right to buy-back 2% for a payment of US$ 4 million anytime prior to the first anniversary of commercial production. Luna has also retained a right of first refusal on the royalty. CNM has the right to back-in for a 51% interest should an estimate of 43-101 mineable reserves, to be calculated within 24 months, exceed 2 million ounces.
Luna has made the initial cash payment and, after completing the 2 year exploration commitment, will have earned a 100% interest in the Cachoeira mining and exploration permits, subject to the royalty and back-in rights.
About Luna Gold Corp
Luna is a mining exploration company focused on the acquisition, exploration, and development of gold resources and advanced stage gold exploration projects in northeastern Brazil. Its Aurizona project has recently received its full environmental permitting and has its feasibility study due in Q1 2008.
On behalf of the Board of Directors
LUNA GOLD CORP.
Tim Searcy, P. Geo. - President and CEO
Website: www.lunagold.com
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this press release.
Regulatory Footnotes
All of Luna's exploration programs and pertinent technical disclosures are prepared by, or under the direct supervision of, Tim Searcy, P.Geo. Mr. Searcy, the President and CEO of Luna Gold, is Luna's qualified person (QP) under the definition of National Instrument 43-101.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the United States Securities Act of 1933 and applicable state securities laws or an exemption from such registration is available.
Forward-Looking Statements:
Statements in this release that are 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. 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. Luna Gold does not assume the obligation to update any forward-looking statement.
CONTACT: Investor Relations at (604) 689-7317 or toll free at 1-866-689-7317
Source: Luna Gold Corp.
