Luna Gold Corp. Announces Results for the Second Quarter of 2012

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 14, 2012) - Luna Gold Corp. (TSX VENTURE:LGC)(OTCQX:LGCUF)(LMA:LGC) ("Luna" or the "Company") today announced its operational and financial results for the three-month period ended June 30, 2012 ("second quarter of 2012").

SECOND QUARTER OF 2012 AND YEAR TO DATE HIGHLIGHTS

• Gold production of 17,269 ounces in the quarter and 33,332 ounces in the year to date
• Record net income of $7.8 million for quarter and $7.3 million for year to date
• Earnings per share of $0.07 for the quarter and year to date
• Average unit cash cost of production of $750 per ounce for the quarter and $767 per ounce for the year to date
• Record gross profit at the Aurizona operation of $9.3 million for the quarter and $15.8 million for the year to date
• Operating cash inflow before working capital movements was $6.1 million for the quarter and $10.2 million for the year to date
• Deep drill program completed at the Piaba deposit at Aurizona, extending mineralization to below 600 metres vertical depth
• Brownfield resource drilling completed at Aurizona near mine targets
• Completed both Phase 1 expansion scoping study and EPCM estimate to produce 100,000 ounces per annum

STRATEGIC OUTLOOK

Aurizona Project Development

Luna remains on target to deliver on its goals for 2012, which are outlined in the Management's Discussion and Analysis report dated March 1, 2012. Foremost among these goals are the production of 60,000 ounces of gold at an average unit cash cost of $750 per ounce in 2012. The Company is on target to achieve this goal.

Aurizona's Phase 1 expansion scoping study reached completion in July. An Engineering, Procurement, and Construction Management ("EPCM") estimate has also been completed, and is currently being reviewed by the Luna's Board of Directors. Further guidance for the market will follow this review.

Exploration

At Aurizona, Luna will assess the recent positive results of the Piaba deep drill program, which will lead to planning of the next steps of brownfield exploration. At the Luna Greenfields district, the Company is focused upon the initiation of drilling at its top priority targets.

COMMENTARY

"Luna's second quarter results mark our fifth consecutive quarter of production growth," stated John Blake, Luna's President and CEO. "At the beginning of 2012, we outlined several challenging goals, most notably the annual production of 60,000 ounces of gold at an average unit cash cost of $750 per ounce. We are confident on achieving our market guidance, and have already achieved our targeted cash cost. I am very pleased with our progress over the first half of this year."

Mr. Blake concluded, "I am also pleased by the progress Luna has made in both project development and exploration. I look forward to announcing not only the results of our recent analyses at Aurizona, but also our findings as we continue the exploration of both that property and the Luna Greenfields district."

For the full version of Luna's Second Quarter of 2012 Financial Statements and Management, Discussion and Analysis, please visit www.lunagold.com.

On behalf of the Board of Directors

LUNA GOLD CORP.

John Blake - President and CEO

Non IFRS Financial Measures

This press release refers to cash cost per ounce of gold produced because certain investors use this information to assess the Company's performance and also determine the Company's ability to generate cash flow for investing activities. These measurements capture all of the important components of the Company's production and related costs. In addition, management utilizes these metrics as an important management tool to monitor cost performance of the Company's operations. These measurements have no standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. These measurements are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Forward Looking Statements

This MD&A includes certain statements that constitute "forward-looking statements", and "forward-looking information" within the meaning of applicable securities laws ("forward-looking statements" and "forward-looking information" are collectively referred to as "forward-looking statements", unless otherwise stated). These statements appear in a number of places in this MD&A and include statements regarding our intent, or the beliefs or current expectations of our officers and directors. Such forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this MD&A, words such as "believe", "anticipate", "estimate", "project", "intend", "expect", "may", "will", "plan", "should", "would", "contemplate", "possible", "attempts", "seeks", "goals", "targets" and similar expressions are intended to identify these forward-looking statements. Forward-looking statements may relate to the Company's future outlook and anticipated events or results and may include statements regarding the Aurizona property (including amount of production, cost of production, future potential) and other development projects of the Company, the Company's future financial position, business strategy, budgets, litigation, projected costs, financial results, taxes, plans and objectives. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements were derived utilizing numerous assumptions regarding expected growth, results of operations, performance and business prospects and opportunities, general business and economic conditions, interest rates, the supply and demand for, deliveries of, and the level and volatility of prices of gold and related products, the timing of the receipt of regulatory and governmental approvals of our projects and other operations, our costs of production and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resources for our operations, market competition, the accuracy of our resource and reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the Company, our ability to attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our projects, our gold inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, and our ongoing relations with our employees and business partners that could cause our actual results to differ materially from those in the forward-looking statements. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Accordingly, you are cautioned not to put undue reliance on these forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results. To the extent any forward-looking statements constitute future-oriented financial information or financial outlooks, as those terms are defined under applicable Canadian securities laws, such statements are being provided to describe the current anticipated potential of the Company and readers are cautioned that these statements may not be appropriate for any other purpose, including investment decisions.

Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially include, but are not limited to, changes in gold prices, changes in interest and currency exchange rates, acts of foreign governments, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, adverse weather conditions and unanticipated events related to health, safety and environmental matters), labour disputes, political risk, social unrest, failure of counterparties to perform their contractual obligations, changes in our credit ratings and changes or further deterioration in general economic conditions, uncertainties with respect to operating in Brazil, including political unrest, theft, uncertainties with respect to the rule of law, corruption and uncertain court systems and other risks discussed elsewhere in this MD&A and our latest AIF filed on SEDAR at www.sedar.com.

Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, we assume no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If we update any one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. You should not place undue importance on forward-looking statements and should not rely upon these statements as of any other date. All forward-looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement.

Other Technical Information

Peter Mah, P.Eng., Certified Mining Engineer, the Company's Vice President Operations is the Qualified Person as defined under National Instrument 43-101 responsible for the scientific and technical work on the development programs and has reviewed and approved the corresponding technical disclosure throughout this MD&A. Titus Haggan Ph.D., EurGeol Certified Professional Geologist #746, the Company's Vice President of Exploration, is the Qualified Person as defined under National Instrument 43-101 responsible for the scientific and technical work on the exploration programs and has reviewed and approved the corresponding technical disclosure throughout this MD&A.