/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES/
VANCOUVER, May 25 /CNW/ - Luna Gold Corp. (TSXV:LGC) ("Luna or the "Company") announces that the Company intends to proceed with a non-brokered private placement financing for up to 35,714,285 special warrants of the Company (the "Special Warrants"), at a price of $0.56 per Special Warrant, for gross proceeds of approximately Cdn$20,000,000 (the "Offering"). Each Special Warrant will entitle the holder thereof to receive one unit of the Company (a "Unit") on the exercise or deemed exercise of the Special Warrant, each Unit being comprised of one common share of the Company (a "Unit Share") and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share of the Company (a "Warrant Share") at a price of $0.80 for a period of 12 months following the Closing Date (as hereinafter defined), subject to adjustment in certain events.
The Special Warrants will be offered in all provinces of Canada (except Quebec) and in jurisdictions outside of Canada pursuant to available prospectus exemptions. The Special Warrants will be exercisable by the holders thereof at any time after the Closing Date (for no additional consideration) and all unexercised Special Warrants will be deemed to be exercised (for no additional consideration) on the earlier of: (a) the date that is four months and a day following the Closing Date, and (b) the fifth business day after a receipt is issued for a final prospectus by the securities regulatory authorities in each of the provinces of Canada where Special Warrants are issued and sold, qualifying for distribution the Unit Shares and Warrants to be issued upon the exercise of the Special Warrants. The Company shall use commercially reasonable efforts to obtain such receipt for a final prospectus qualifying the exercise of the Special Warrants within 60 days of the Closing Date. Until a receipt is issued for the final prospectus, the Special Warrants (and any Unit Shares and Warrants issued on exercise thereof) will be subject to a four month hold period under applicable Canadian securities laws. In connection with the Offering, subject to applicable regulatory approvals, the Company expects to pay a finder's fee to be agreed upon with certain finders who may assist the Company with respect to the Offering.
Closing of the Offering is anticipated to occur on or about June 8, 2010 (the "Closing Date") and is subject to receipt of applicable regulatory approvals including approval of the TSX Venture Exchange.
The Company intends to use the net proceeds of the Offering to advance the Company's exploration programs at the Aurizona Main and Regional targets, to complete a NI 43-101 compliant resource estimate at the Cachoeira property (which is targeted to be released in the third quarter of 2010) and to provide additional working capital at the Aurizona gold operation.
Jim Bahan, Luna's CEO comments "We are entering an exciting new phase in the Company's planned growth strategy. The aim is to quickly expand the size of the gold resource available to the Aurizona plant so that a sustainable increase in gold production can be planned. In addition we are encouraged by the exploration progress at our Regional claims and at Cachoeira. These funds will allow us to move much quicker on these targets than otherwise. All exploration claims have finite times to complete the work and early starts are essential for thorough assessment of potential."
At Aurizona Main, a focused near surface drilling program of targets identified within trucking distance of the Aurizona plant will be carried out, as well as a deeper infill drilling program at Piaba and its extensions. The Company will significantly advance the exploration claims within the Aurizona Regional project.
In addition, part of these proceeds will be utilized at the Aurizona operation for working capital requirements until positive net cash inflows are achieved. As discussed in the Company's Q1 2010 Management's Discussion and Analysis, the Company expects to have a working capital deficiency of approximately $7 million due to additional costs incurred related to project capital enhancements at the Aurizona operation. As a result of the Offering, the Company does not intend to complete the RMB senior secured short term debt facility extension that was recently offered to the Company.
This press release contains forward-looking statements under Canadian securities legislation. Forward looking statements include, but are not limited to, statements with respect to the likelihood a prospectus will be filed on time or at all resulting in the conversion of the special warrants before four months and a day from the closing date the proposed use of proceeds, receipt of regulatory approval; completion of the financing on the terms proposed; Luna's properties' potential and timetable, Luna's ability to raise additional funds necessary; the future price of gold; the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Luna to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays during construction, expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of ferrovanadium; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Although management of the Luna has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Investors should review review the risk factors identified in Luna's latest annual information form and other continuous disclosure filings on SEDAR. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Luna does not undertake to update any forward looking statements, except in accordance with applicable securities laws.
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 (the "U.S. Securities Act") 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 U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Luna Gold Corp.
Luna is a mineral exploration and development company engaged in the acquisition, exploration, and development of gold resources and advanced stage gold exploration projects in Brazil. The Company is currently commissioning its Aurizona gold project in Maranhao, Brazil.
On behalf of the Board of Directors
LUNA GOLD CORP.
Jim Bahan - CEO
NEITHER THE TSX VENTURE EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE LUNA GOLD CORP.
For further information: For further information: Investor Relations at (604) 689-7317 or toll free at 1-866-689-7317