VANCOUVER, Oct. 9 /CNW/ - 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
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this press release.
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.
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
For further information:
For further information: Investor Relations at (604) 689-7317 or toll
free at 1-866-689-7317