VANCOUVER, BC--(Marketwired - February 17, 2015) - Luna Gold Corp. (
Operation Update
The Company has commenced the process of suspending mining operations at Aurizona by February 15. On completion of mining operations, the ore stockpile will have approximately 470,000 tonnes of mixed soft and hard saprolite ore with an average head grade of 1.12 grams per tonne and 390,000 tonnes of transitional ore with an average head grade of 1.06 grams per tonne. The ore will initially be blended at a ratio of 80% mixed saprolite ore to 20% transitional ore for feeding to the plant. The Company expects to process approximately 860,000 tonnes of ore grading approximately 1.10 grams per tonne over the next five months.
Cutbacks in mine site personnel are underway to better align the remaining workforce for processing stockpiled ore at the plant and associated activities. Employees at Aurizona will have been reduced from approximately 900 at mid-2014 to approximately 390 on halting of mining operations.
As disclosed in the Company's third quarter 2014 results news release (11-13-14), in an effort to conserve capital, all non-essential capital programs were halted, including the tailings dam raise. The tailings facility currently has an estimated available capacity of 900,000 tonnes of tailings before reaching maximum safe containment. The Company expects this capacity will be sufficient to contain the tailings from the stockpiled ore to be processed over the next five months. A tailings dam raise from 29.5 metres to 31.6 metres has been permitted and the estimated cost to complete this raise is approximately US$6 million. This raise will be required to increase the available storage volume to process ore beyond the current available limit. This construction can only take place in the dry season from July - December. The Company will require additional capital to complete such construction going forward.
Work has continued on the Aurizona reserve study over the past several months, including the relogging of over 61,000 metres of core. The relogging has resulted in a new geologic model, including reinterpretation of geology, alteration, oxidation, structure and ore hardness. The classification of ore hardness is of particular importance to determine optimum saprolite (soft) ore feed for the current plant design. This new hardness data has identified two types of saprolite ore; 1) soft -- which is suitable for processing in the existing plant and 2) hard -- which behaves more like transitional/primary ore which requires crushing and grinding. This information will result in a re-classification of the remaining ore at Piaba into 1) soft saprolite, 2) hard saprolite, 3) transitional and 4) primary. This reclassification has materially reduced the amount of remaining saprolite ore that can be processed through the existing plant. Further technical information and work is required to determine the process plant requirements needed to successfully process the majority of the ore body, specifically related to crush and grind requirements.
Management will focus over the next months on the development of an updated NI 43-101 technical report to provide a mineral reserve estimate based on the new geological model and updated project parameters. In the interim, given the suspension of mining operations and the need of additional capital to restart economical mining activities, the Company's existing mineral reserve estimates (effective as of January 29, 2013) contained in its public disclosure and in its last technical report are no longer considered current and should therefore not be relied upon.
Corporate Update
The strategic review process continues with Canaccord Genuity acting as the Company's advisor. The Company has received indicative term sheets which are subject to further due diligence work at the Aurizona operation and the acceptance of an amended stream agreement by Sandstorm Gold Ltd. Site visits will continue over the next several weeks. However, there can be no assurance that the strategic review process or the indicative term sheets will result in any transaction.
As disclosed in our Management's Discussion and Analysis for the third quarter ended September 30, 2014, the Company is not in compliance with certain covenants in its Corporate Secured Revolving Facility. Management continues to consult with its lenders.
Q4 and Full Year 2014 Results Conference Call
Luna will release its financial results for the three-month and full year ending December 31, 2014 ("Fourth Quarter 2014") at 7:00 a.m. Eastern Time on Monday, March 16, 2015.
Luna's Fourth Quarter 2014 financial statements, and Management's Discussion and Analysis will be available on Luna's website, www.lunagold.com, and www.sedar.com.
About Luna Gold Corp.
Luna is a gold production and exploration company engaged in the operation, discovery, and development of gold projects in Brazil.
Marc Leduc, P. Eng., the President and CEO of the Company, is a "qualified person" as such term is defined in NI 43-101 and has reviewed and approved the scientific and technical information included in this press release.
On behalf of the Company
LUNA GOLD CORP.
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 future or continued mining operations, expected gold production and/or the results of analysis on gold production, expected grades, anticipated tailings facility cost, anticipated timing for the release of the new resource and reserve estimates and the Company's compliance with its debt and other financing arrangements. 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 a suspension and potential restart of operations, the effect of the Company's non-compliance with certain covenants in its debt and other financing agreements, 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, uncertainties with respect to non-compliance with credit facility covenants 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:
For further information contact
Investor Relations
+1 (604) 568-7993
Website: www.lunagold.com