Luna Gold Corp. Reports Operational and Financial Results for the Three Months Ended March 31, 2012
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/15/12 -- Luna Gold Corp. (TSX VENTURE: LGC)(OTCQX: LGCUF)(LMA: LGC) ("Luna" or the "Company") today announces its results for the three months ended March 31, 2012. The complete financial statements and management discussion and analysis are available for review at www.lunagold.com and should be read in conjunction with this news release.
FIRST QUARTER 2012 HIGHLIGHTS
-- Record quarterly gold production of 16,063 ounces was achieved in the
quarter;
-- Average unit cash cost of production was $771(2) per ounce;
-- Gross profit at the Aurizona operation for the quarter was $6.5 million;
-- Net loss for quarter was $0.5 million; and
-- Operating cash inflow before working capital movements for the quarter
was $4.1 million.
OUTLOOK AND STRATEGY
Aurizona operations and expansion project development
The Company remains on target to deliver on its 2012 goals and strategy which were outlined in the December 31, 2011 Management Discussion and Analysis report dated March 1, 2012.
The Company remains on target to achieve 60,000 ounces of gold production at an average unit cash cost of $750(1) per ounce.
The Phase I expansion scoping study is progressing well with SNC Lavalin Inc., Vancouver. The base study is almost complete and the capital costs are being verified prior to release. The results of the scoping study will be used to complete a basic engineering and an EPCM estimate. Upon approval by the Board of Directors, the Company will mobilize a construction team to site and commence construction. The details of the construction, costs and timing will be released upon completion of the Phase I expansion scoping study, basic engineering and EPCM estimate.
Luna Greenfields exploration project
The Company will continue its exploration programs that include ground geophysical surveys, structural mapping, auger drilling and some trenching prior to drilling the three most advanced gold targets identified to date in this region. The potential drill targets will be rate ranked in priority and the top three targets will be drilled commencing in the third quarter of 2012. At the same time, the Company will continue to focus on identifying new gold targets through field geochemical, geophysical and geological surveys.
Aurizona brownfield exploration
The Company will continue to drill for high grade ore zones through the second quarter of 2012. Any discovery of high-grade mineralization within the large Piaba deposit will then be assessed for the possibility of developing an underground mine and improving feed grade. Finally, the Company will continue with surface exploration programs focused on the area to the east of Piaba to deliver new drill targets in 2013.
AURIZONA GOLD MINE - MARANHAO STATE, BRAZIL
Segmented operating results
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Three months ended March 31
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(tabled amounts are expressed in thousands of
US dollars) 2012 2011
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Mined waste - tonnes 891,142 348,036
Mined ore - tonnes 402,507 111,609
Ratio of waste to ore 2.2 3.1
Ore grade mined - g/t 1.32 1.79
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Processed ore - tonnes 439,820 293,393
Average grade processed - g/t 1.25 1.19
Average recovery rate % 84% 83%
Gold produced (ounces) 16,063 9,209
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Gold sold (ounces) 13,431 8,358
Cash costs of production (USD per ounce) (1)
Mining 161 279
Processing 394 563
Administration 185 232
Refining and transportation 31 54
Total cash costs of production (per ounce) $771 $1,128
Gross profit (loss) $6,454.3 $726.4
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(1) Cash cost is a non IFRS measure. See "Non IFRS Measures" in the full
MD&A.
Mining production
During the quarter, waste removal and ore mined increased by 156% and 261%, respectively, over the comparative quarter of 2011. These increases were due to the implementation of the Company's new management and mining team and the Company's decision to become owner-operator of mining activities during the 2011 year. With the new mine team in place, starting in Q3 2011, proper planning was completed to address the seasonal impacts related to the rain season. Improved road design, drainage improvements, laterite surfacing and other improvements in mine related activities were completed prior to the rain season which began in January. Mine operations were significantly impacted in the comparative quarter due to improper preparation for the heavy rains, which resulted in reliance on production from the ore stockpiles. In addition, the 2012 rain season was drier than the comparative quarter with approximately 30% less rain measured.
The ore grade mined decreased from the comparative quarter of 2011, however, remained in line with the overall life of mine ore grade. The comparative quarter's mining activities required mining operations to focus on obtaining high grade ore due to the shortfall in ore tonnage mined related to the heavy rains. This strategy was not necessary in 2012 due to the proper preparation of the mine in Q4 2011.
The Company continued to operate in the quarter with mostly rental equipment. The new equipment, which consists of twelve (12) CAT 740 articulated dump trucks, three (3) CAT 374 excavators and ancillary support equipment, was received in country and is currently being transported from the port to the mine site and should be commissioned in the latter part of the second quarter. The overall change to larger, articulated dump trucks and matching fleet is expected to result in additional year round mining efficiencies and increased production in upcoming periods.
Mill Processing
During the quarter, gold production was 74% higher than the comparative quarter of 2011. This was the result of a 50% increase in ore feed to the mill, a 5% increase in the ore grade processed and a slight increase in recoveries. In addition, the operational team reduced the gold in circuit inventory from December 31 by approximately 1,200 ounces.
Ore fed to the mill of approximately 440 thousand tonnes was a quarterly record for the Company. This was achieved through plant improvements completed during the latter half of 2011, better maintenance planning, and a stronger management and operational team, which all led to an increase in operating hours in Q1 2012. The comparative quarter of 2011 was hampered by significant plant downtime related to poor construction, which led to planned plant shutdowns near the end of Q1 2011 to upgrade the facility.
The ore grade processed was slightly higher than the comparative quarter of 2011, which was the result of the improvements in the mining operations. The gold recovery percentage remained relatively similar to the comparative quarter. The Company expects to improve the gold recovery rate with the implementation of a carbon regeneration kiln, an intense leach reactor and further plant upgrades with a target of achieving a 90% recovery rate before year end.
The mine produced approximately 6,200 ounces of gold in April.
Cash Costs(2)
The average unit cash cost of production for Q1 was a quarterly record low for the Company and is trending downward as expected with increased gold production levels. The significant reduction in the average unit cash of cost production versus the comparative quarter of 2011 was due to the increase in gold production, lower mining costs and the strengthening of the US dollar against the Brazilian currency.
The increase in gold production allowed for fixed operating costs to be spread over a larger number of gold ounces produced, thus lowering the average unit cash cost of production. Ore costs were lower due to improvements in the mining team, mining operations and lower waste stripping in Q1 2012. Refining and transport costs were lower due to fewer shipments at higher volumes. Overall, the strengthening of the US dollar against the Brazilian currency, by about 6% quarter versus quarter, provided a positive impact to the average unit cash cost of production.
The Company remains on target to achieve its forecast average unit cash cost of production for 2012 of $750 per ounce. Further improvements in the average unit cash cost of production are expected through improvements in mining costs upon mobilization of the new mine fleet and production efficiencies which are expected to be achieved upon the onset of the dry season in the second half of the year.
AURIZONA EXPLORATION
The Company's exploration team delivered a major resource update in early December 2011. Six drill rigs were demobilized from the project and two rigs remain and completed exploration drill holes at the Boa Esperanca, Ferradura and Conceicao near mine targets in this first quarter. Geologic modeling for these targets is well advanced. The Phase 1 deep drill program commenced at the Piaba deposit in late February. The mine licence application for the Tatajuba deposit was submitted to the DNPM in March.
Deep Diamond Drilling - Piaba Deposit
The Piaba deep drill program commenced in late February. The Phase 1 deep program consists of 6 diamond holes targeting three interpreted high-grade plunging structures that cross-cut the main orebody. The drilling is designed to intersect these structures at vertical depths of between -550 metres right to left and -650 metres right to left thus extending the plunge. Two holes have been completed and two are in progress. Detailed geotechnical studies are being carried out on the core.
Diamond and Reverse Circulation Drilling - Boa Esperanca
Eight diamond drill holes totalling 1,949 metres were completed at Boa Esperanca, testing a target strike length of 1,000 metres. Fourteen RC drill holes totalling 1,548 metres were also completed testing a strike length of 1,000 metres. Geological and structural modeling of the Boa Esperanca target is well underway. In late April, an infill RC program commenced at Boa Esperanca at 50 metre spacing targeting near surface oxide mineralization. Core geology is dominated by tonalites interbedded with metavolcanics and weak to moderate hydrothermal alteration.
Diamond Drilling - Ferradura
Eight diamond drill holes totalling 1,283 metres were completed at Ferradura testing a target strike length of 500 metres. Geological and structural modeling of the Ferradura target is well underway. An infill RC program will commence targeting near surface oxide mineralization on completion of the Boa Esperanca infill program. Core geology is dominated by tonalites and gabbros.
Diamond Drilling - Conceicao
Three diamond drill holes totalling 400 metres were completed at Conceicao, testing a strike length of 300 metres. Geological and structural modeling of the Conceicao target is well underway. An infill RC program will commence targeting near surface oxide mineralization on completion of the Ferradura infill RC program. Core geology is dominated by tonalites and gabbros.
Permitting
The process of converting the Tatajuba exploration licence, which hosts the Tatajuba deposit, to a mining license advanced during the quarter with submittal of the complete mine licence application to the DNPM in March.
CACHOEIRA GOLD PROJECT
All activities during Q1 were related to social and community development within the Cachoeira project.
LUNA GREENFIELDS EXPLORATION PROPERTY - MARANHAO STATE, BRAZIL
Areal Gold Target
Assay results were received for the Areal target auger drill program (382 holes totaling 2,223 meters). This program essentially sterilized a large part of the soil anomaly and identified two sub-parallel, mineralized structures located to the southwest of the main Areal pit.
Ceara-Arete Targets (PC Grid)
Positive exploration results for the Ceara Arete target were announced in March. Ceara and Arete are two separate gold targets hosted by a southwest trending shear zone located 16 kilometres along strike from the Aurizona mine. Geochemical and geophysical data combined with geological mapping indicate that these new targets are located in the same structural corridor that hosts the Aurizona gold deposits. Highlights included:
-- Ceara - gold in soil anomaly measuring 0.55 km x 0.25 km at a 50 ppb Au
cut-off with maximum values of 1.32 g/t Au associated with sulfidization
and quartz veining in tonalites
-- Ceara - reconaissance rock grab sampling program (38 samples) returned
gold values up to 20.30 g/t Au
-- Arete - Gold in soil anomaly measuring 1.00 km x 0.10 km at a 50 ppb Au
cut-off with maximum value of 0.79 g/t Au
-- Arete - Reconaissance rock grab sampling program (04 samples) returned
gold values up to 3.31 g/t Au
-- Arete - Auger drill program defined 0.50 km long subcropping mineralized
zone with best intersection of 5.00 m @ 1.96 g/t Au from surface (Auger
hole T2684)
Nova Vida Target
No exploration work was conducted at Nova Vida in the quarter.
Jiboia, Santarem, Tatu Targets (JST Grid)
No exploration work was conducted at JST in the quarter.
CPB, PJP, BML, SDP, C-MAG Grids
Work continued at these targets in the quarter and assay data are being uploaded to the databases. All grids were finalized with the exception of the C-MAG grid which is still being opened and sampled. The Company is aggressively exploring its extensive and prospective landholding at Luna Greenfields to deliver drill targets on 100% owned mineral rights in 2012.
Artisanal Workings Reconnaissance Program
The artisanal workings reconnaissance mapping program is progressing. 90 garimpo occurrences have been registered to date. This program is discovering numerous new primary and alluvial artisanal workings.
SUMMARY OF OPERATING RESULTS
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Three months ended March 31,
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(tabled amounts are expressed in
thousands of US dollars) 2012 2011 2010
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Gold sales (ounces) 11,148 6,937 -
Gold delivered to Sandstorm 2,283 1,421
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Revenue 19,113.0 10,357.4 -
Operating expense (9,863.3) (8,728.9) -
Depreciation and amortization (2,795.4) (902.1) -
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Gross profit (loss) 6,454.3 726.4 -
General & administration(3) (3,198.8) (1,062.0) (1,019.1)
Exploration expense (2,668.0) (1,398.7) (63.2)
Financing (cost) income, net (590.4) (355.6) 30.8
Unrealized gains from derivatives 1,168.3 1,628.3 -
Foreign exchange and other 476.7 650.4 4.6
Income taxes (2,158.2) - -
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Net (loss) income (516.1) 188.8 (1,046.9)
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Basic/diluted loss per share (0.00) 0.00 (0.00)
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Total assets 159,128.5 113,058.1 85,115.8
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Total liabilities 59,475.2 49,606.5 48,564.9
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(3) General and administration ("G&A") consists of general and
administrative expenses, professional fees and stock based compensation
charges.
Revenue increased over the comparative period of 2011 due to the increase in gold production and the increase in the price of gold. The Company's average realized price of gold received was $1,714 per ounce for the first quarter of 2012, a 25% increase over the realized price of gold received in the comparative quarter of 2011 (excluding Sandstorm proceeds).
Sandstorm gold proceeds of $400 per ounce (per the Sandstorm Agreement) were recorded as a recovery of operating expenses in Q1 2012, but were recorded as revenue in the comparative quarter of 2011. This difference in accounting treatment was due to a change in the accounting treatment of the Sandstorm Agreement effective July 1, 2011.
Operating expense was higher than the comparative quarter due to the 61% increase in the net ounces sold and delivered to Sandstorm. However, operating expense was positively impacted by the lower average unit cash cost of production in first quarter of 2012 compared to the same period of 2011. The change in the accounting treatment for the delivery of gold to Sandstorm resulted in operating expenses in Q1 2012 decreasing by approximately $0.9 million.
Depreciation and amortization was higher than the comparative quarter in 2011 due to the increased gold ounces sold and delivered.
General and administrative expense was significantly higher than comparative period of 2011 due to increases in salaries, non-cash stock based compensation expense, investor relation activities and professional fees. Salaries accounted for approximately 30% of the increase and were higher due to an increase in the number of corporate employees, increases in employee salaries and the payment of bonuses related to the 2011 year. Non-cash stock based compensation was approximately $0.9 million of the general and administration expense and accounted for about 24% of the increase. Stock based compensation was higher due to the Black Scholes value of the stock options granted. Investor relations costs accounted for approximately 14% of the increase as the Company increased its marketing efforts with the successful turnaround of the Company at the end of 2011. Professional fees accounted for approximately 18% of the increase due to higher audit fees, consulting costs and legal costs.
Exploration expense increased over the comparative quarter of 2011 due to a change in exploration strategy for the Company. The Company's exploration activities are now targeted on the Luna Greenfields area with the goal of discovering a new gold resource. Expenditures during the first quarter of 2012 were focused on defining drill targets with the goal of commencing drilling in the third quarter of this year. In addition, the Company spent approximately $2 million on deep drill holes and further resource definition work at Aurizona, which was capitalized as mineral properties. The comparative quarter of 2011 expenditures were mainly on the Aurizona resource expansion and less funds were allocated to the Luna Greenfields project.
Net financing cost was higher due to an increase in the outstanding debt balance quarter on quarter.
Unrealized gains (losses) from derivative liabilities were related mark-to-market adjustments on foreign exchange forward contracts, interest rate swap contracts and the warrant derivative liability. A gain was recognized on the forward contracts and the warrant liability of approximately $0.6 million and $0.9 million, respectively, which was offset by a loss of approximately $0.3 million on the interest rate swaps. The comparative quarter of 2011 included a gain on the warrant liability.
Foreign exchange gains were related to the strengthening of the US dollar against the Brazilian currency. The change between the comparative quarters was due to variances in the foreign exchange rate.
An income tax provision was recognized in the first quarter of 2012 as the operation generated profit. The operation recognized a loss during the comparative quarter of 2011, thus no income tax provision was recognized.
To view the Consolidated profit and loss - 2 year historic trend table, visit the following link: http://media3.marketwire.com/docs/Profit_and_Loss_2YearTrend.jpg
Revenues increased over the past 2 years, which have been driven by increases in production and the rising gold price. However, the increase in production during the first quarter of 2012 was not reflected in revenue due to timing differences resulting in an increase in finished good inventory at the end of Q1 2012.
Operating expenses were driven by the average unit cash cost of production each quarter. The average unit cash cost of production has trended downwards since achieving gold production in Q2 2010. A record low average unit cash cost of production was achieved in Q1 2012 and is reflected in the operating expense.
Depreciation expense is based on units of production and was in line with production.
General and administration expense increased quarter over quarter. This has been the result of strengthening the corporate function with the growth of the Company and increasing its marketing expenditure while the Company's results improve.
Financing costs were related to debt facilities outstanding each quarter. The significant variance in Q4 2011 and Q3 2011 were due to refinancings that took place during those quarters and the recognition of interest accretion.
Unrealized gains (losses) from derivative liabilities were related to the warrant liability throughout each quarter and the foreign exchange contracts and interest rate swaps which were assumed in Q4 2011.
Foreign exchange gains and losses have been driven by the variance in the USD:BRL exchange rate quarter on quarter.
An income tax recovery was recognized in Q4 2011 to recognize loss carry forwards that the Company can use against future income. In Q1 2012, an income tax provision was recognized on the operational income for the quarter.
LIQUIDITY AND CAPITAL RESOURCES
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Three months ended March 31,
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(tabled amounts are expressed in
thousands of US dollars) 2012 2011 2010
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Cash flows from operating activities
- Before working capital items 4,082.7 (801.7) (385.4)
- After working capital items 3,809.3 425.7 (1,650.0)
Cash flows from financing activities (123.2) (1,143.2) 13,910.1
Cash flows from investing activities (13,495.1) (5,955.6) (15,858.7)
Effect of exchange rates on cash (221.1) 58.2 (41.9)
Net cash flows (9,809.0) (6,673.1) (3,598.6)
Cash balance 25,622.9 4,088.7 8,925.0
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At March 31, 2012, the Company had cash and cash equivalents of $25.6 million and finished gold bullion inventory of approximately 5,400 ounces. Since December 31, 2011, the cash balance increased from operations producing positive cash inflow, which was then used mainly to purchase mining equipment and make payments for further resource expansions and deep drilling at Aurizona. The Company has adequate funds available to meet its working capital requirements, debt payments, and execute its planned capital upgrades and exploration activities in 2012.
In the first quarter of 2012, the Company generated record operating cash inflows after working capital movements of $3.8 million. This was the direct result of the operational improvements leading to an increase in gold production and a reduction in the average unit cash cost of production and was the reason for the increase compared to the same quarter in 2011.
Cash outflow from financing activities in the first quarter of 2012 consisted of payments on the Finame equipment financing. The comparative quarter of 2011 included a debt payment of $1.7 million, which was offset by stock option proceeds.
Cash outflow from investing activities in the first quarter of 2012 consisted of $11.5 million on capital equipment at the Aurizona operation and $2.0 million on deep drilling and other costs to further define the Aurizona resource. The majority of the equipment purchases were for mining equipment, including the articulated dump trucks, excavators and ancillary equipment. There were also some minor security improvements and costs associated with raising the tailings dam to accommodate future production levels. Cash outflow from the comparative quarter of 2011 was related to costs to upgrade the plant to meet feasibility study production levels and amounts spent on the Aurizona resource expansion.
SHAREHOLDERS' EQUITY
Shareholders' equity decreased from the prior period due to the Company's net loss during the quarter.
As at the date of this report the Company had 104,580,179 common shares outstanding, options to purchase 6,928,000 common shares and warrants to purchase 9,491,901 common shares outstanding.
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
For the three months ended March 31,
(expressed in thousands of U.S. dollars, except where indicated)
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Note 2012 2011
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Revenue
Gold sales $ 19,113.0 $ 10,357.4
Operating expenses
Cost of goods sold (9,863.3) (8,728.9)
Depletion and amortization (2,795.4) (902.1)
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Gross Profit 6,454.3 726.4
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Exploration (2,668.0) (1,398.7)
General and administrative (2,309.7) (717.6)
Stock-based compensation (889.1) (344.4)
Foreign exchange gain 513.7 619.1
Derivative instrument gain 1,168.3 1,628.3
Finance income 78.3 117.2
Finance expense (668.7) (472.8)
Other (expense) income (37.0) 31.3
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Income before income taxes 1,642.1 188.8
Income tax expense (2,158.2) -
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Net (loss) income and comprehensive
(loss) income $ (516.1) $ 188.8
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Income per common share
Basic (0.00) 0.00
Fully diluted (0.00) 0.00
Weighted average shares outstanding
(000's)
Basic 104,534 87,128
Fully diluted 105,111 88,391
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Total shares issued and outstanding
(000's) 104,580 87,243
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Consolidated Balance Sheets
(expressed in thousands of U.S. dollars, except where indicated)
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March 31, December 31,
Note 2012 2011
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Assets
Current assets
Cash and cash equivalents $ 25,622.9 $ 35,653.0
Accounts receivable and prepaid expenses 2,936.8 5,029.7
Derivative asset - 106.0
Inventory 12,932.5 8,710.3
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41,492.2 49,499.0
Property, plant and equipment 108,042.5 97,862.4
Derivative asset - 58.9
Deferred tax asset 6,699.3 8,122.4
Other assets 2,894.5 2,659.1
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Total assets $ 159,128.5 $ 158,201.8
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 6,838.6 6,854.7
Income taxes payable 2,461.8 1,323.8
Current portion of long-term debt 5,363.2 3,098.2
Current portion of other liabilities 907.8 576.3
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15,571.4 11,853.0
Long-term debt 24,034.2 25,937.8
Derivative liability 8,084.9 9,435.8
Other liabilities 9,466.4 9,676.6
Restoration provision 2,318.3 2,187.6
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Total liabilities 59,475.2 59,090.8
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Shareholders' equity
Share capital 150,047.4 148,989.0
Deficit (50,394.1) (49,878.0)
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Total shareholders' equity 99,653.3 99,111.0
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Total liabilities and shareholders'
equity $ 159,128.5 $ 158,201.8
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Consolidated Statements of Changes in Shareholders' Equity and Deficit
(expressed in thousands of U.S. dollars, except where indicated)
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Attributable to equity holders of the Company
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Shares Share Contributed
Notes ('000) capital surplus Deficit Total
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Balance at
December 31,
2010 86,908 $ 99,912.3 $ 7,321.0 $(44,988.5) $ 62,244.8
Net income
for the period - - - 188.8 188.8
Stock options
exercised 335 1,083.8 (410.3) - 673.5
Stock-based
compensation
charges - - 344.4 - 344.4
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Balance at
March 31, 2011 87,243 $ 100,996.1 $ 7,255.1 $(44,799.7) $ 63,451.5
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Balance at
December 31,
2010 86,908 $ 99,912.3 $ 7,321.0 $(44,988.5) $ 62,244.8
Net loss for
the year - - - (4,889.5) (4,889.5)
Stock options
exercised 495 1,583.6 (596.3) - 987.3
Stock-based
compensation
charges - - 3,257.6 - 3,257.6
Issue of share
capital, net 17,107 37,510.8 - - 37,510.8
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Balance at
December 31,
2011 104,510 $ 139,006.7 $ 9,982.3 $(49,878.0) $ 99,111.0
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Net loss for
the period - - - (516.1) $ (516.1)
Stock options
exercised 70 269.0 (99.7) - 169.3
Share-based
compensation
charges - - 889.1 - 889.1
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Balance at
March 31, 2012 104,580 $ 139,275.7 $ 10,771.7 $(50,394.1) $ 99,653.3
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Consolidated Statements of Cash Flows
For the three months ended March 31,
(expressed in thousands of U.S. dollars, except where indicated)
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Note 2012 2011
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Cash flows from operating activities
Net (loss) income for the period $ (516.1) $ 188.8
Items not affecting cash
Deferred income tax provision 1,423.1 -
Depletion and amortization 2,795.4 919.3
Accretion of other liabilities (208.0) (253.3)
Unrealized foreign exchange gains
(losses) 536.3 (584.8)
Unrealized gains from derivative (1,185.9) (1,628.3)
Shareeebased compensation charges 889.1 344.4
Accretion of restoration provision 68.2 65.8
Accretion of interest 280.6 146.4
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4,082.7 (801.7)
Change in nonnncash operating working
capital
Increase in accounts receivable and
prepaid expense 1,857.4 932.2
Increase in inventory (3,702.5) (1,895.0)
Increase in accounts payable and
accruals 1,571.7 2,190.2
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3,809.3 425.7
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Cash flows from financing activities
Payment of debt financing fees - (150.0)
Repayment to principal of debt financing (292.5) (1,666.7)
Proceeds on issuance of common shares 169.3 673.5
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(123.2) (1,143.2)
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Cash flows from investing activities
Payments for mineral properties (1,975.3) (2,362.3)
Payments for property, plant and
equipment (11,519.8) (3,593.3)
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(13,495.1) (5,955.6)
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Effect of exchange rate changes on cash (221.1) 58.2
Decrease in cash and cash equivalents (9,809.0) (6,673.1)
Cash and cash equivalents - beginning of
period 35,653.0 10,703.6
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Cash and cash equivalents - end of
period $ 25,622.9 $ 4,088.7
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On behalf of the Board of Directors,
LUNA GOLD CORP.
John Blake - President and CEO
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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Luna Gold Corp.
Investor Relations
(604) 558 0560
www.lunagold.com
