Luna Gold Enters Into Debt Amendment Agreement With Eldorado and Brascan

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 20, 2011) - Luna Gold Corp. (TSX VENTURE:LGC) ("Luna Gold" or the "Company") announces that it has entered into an agreement with Brascan Natural Resources S.A. ("Brascan") and Eldorado Gold Corporation ("Eldorado") to amend the outstanding debt of the Company to Brascan and Eldorado. Luna Gold had issued promissory notes in the aggregate amount of US$3,000,000, respectively, to each of Eldorado and Brascan in connection with the 2006 Purchase Agreement pursuant to which Luna Gold acquired the Aurizona project from Brascan and Eldorado. In satisfaction of the aforementioned promissory notes, Brascan and Eldorado will each receive:

1. US$1,500,000 in cash on or before December 2, 2011; and

2. such number of common shares of Luna Gold, on or about July 25, 2011, as is equal to the Canadian dollar equivalent of US$1,500,000 divided by C$0.59 per share.

The proposed share issuance remains subject to approval by the TSX Venture Exchange.

About Luna Gold Corp.

Luna Gold is a producing gold company with development and exploration projects. Gold production is from the Aurizona Mine in Maranhão, Brazil, development is the Cachoeira deposit in Para, Brazil and the Company is exploring in a large strategically placed land position in Maranhão, Brazil.

On behalf of the Board of Directors

LUNA GOLD CORP.

John Blake – President and CEO

Website: www.lunagold.com

Forward-Looking Statements

This news release may contain 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, the completion of the proposed transactions outlined herein. 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. Certain of the statements made herein by Luna Gold Corp. are forward-looking and subject to various risks and uncertainties, both known and unknown, many of which are beyond the ability of Luna Gold Corp. to control or predict. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements.

Forward-looking information is subject to known and unknown risks and uncertainties that may cause Luna Gold Corp.'s actual results, performance or achievements may be materially different from those expressed or implied by such forward-looking information, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to 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, mine development and production costs, the projected life of the Company's mines, future production levels, 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.