SOURCE: Luna Gold Corp.

Luna Gold Corp.

May 27, 2016 09:00 ET

Luna Gold Announces Greenfields Exploration Agreement With AngloGold Ashanti

VANCOUVER, BC--(Marketwired - May 27, 2016) - Luna Gold Corp. (TSX: LGC), ("Luna" or the "Company") is pleased to announce that it has entered into an exploration agreement with AngloGold Ashanti Limited for the Company's greenfields mineral claims that surround its past-producing Aurizona Gold Mine in northern Brazil. The terms of the agreement require AngloGold Ashanti to invest US$14 million in exploration expenditure over a four year period to earn a 70% interest in the mineral claims. The joint venture will not include mineral claims that correspond to the Aurizona Gold Mine, the nearby Tatajuba orebody extension and other brownfields properties, or the Touro greenfields property. Should AngloGold Ashanti not fund the US$14 million in exploration over the 4-year earn in period, then they will not receive any interest in the mineral claims.

Marc Leduc, President and CEO, stated, "We are very happy to have one of the largest gold producers in the world, AngloGold Ashanti, join us in this exploration project. This clearly demonstrates the outstanding geological potential of the greenfields claims. In the current difficult market of the gold industry, AngloGold Ashanti has committed a considerable amount of funds to our exploration areas and our prospective ground. We are happy to team up with AngloGold Ashanti who have considerable exploration experience in similar Precambrian geological terranes and an outstanding track record as one of the best mine operators in Brazil." He also added, "This exploration agreement will also allow Luna to focus on the redevelopment and restart of the Aurizona Gold Mine while maintaining a significant exploration program in the greenfields areas."

The agreement currently covers an area of 1,702 square kilometres, which may be increased to 2,387 square kilometres subject to governmental approvals on certain greenfields claims. AngloGold Ashanti is required to spend a minimum of US$2 million during the first year of the earn-in period, and can withdraw from the agreement at any time after spending US$2 million.

After expenditure of US$2 million in the first year of the agreement, AngloGold Ashanti can spend an additional US$12 million over the next three years to vest at 70% in the mineral claims. Following AngloGold Ashanti vesting, Luna will thereafter be obligated to fund future joint venture expenditures on a pro-rata basis. In the event Luna elects not to contribute its pro-rata share of future joint venture expenditures and its interest in the joint venture were to fall below 5%, Luna would be required to transfer its joint venture interest to AngloGold Ashanti in exchange for a 1% net smelter returns royalty ("NSR") on the greenfields properties. The joint venture agreement will provide AngloGold Ashanti with a one-time option to purchase the 1% NSR for US$8 million. If AngloGold Ashanti elects to sell its interest in the joint venture, Luna has the option to purchase AngloGold Ashanti's pro-rata interest in any gold resources identified in a National Instrument 43-101 compliant mineral resource estimate for US$10 per ounce.

About Luna Gold Corp.

Luna is engaged in the exploration and redevelopment of its past producing Aurizona Gold Mine, which was placed on care and maintenance in 2015. The Company expects to publish a National Instrument 43-101 compliant pre-feasibility study development plan for the Aurizona Gold Mine in 2Q 2016.

On behalf of the Company

Marc Leduc P.Eng. -- President, Chief Executive Officer and Director

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 exploration results, 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 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 Information

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