Luna Gold Revises Guidance for 2014 at Aurizona Gold Mine in Brazil
Delays Completion of Phase One Expansion Due to Forecast Cost Overruns
VANCOUVER, BC--(Marketwired - August 05, 2014) - Luna Gold Corp. (TSX: LGC)(LMA: LGC)(OTCQX: LGCUF) "Luna" or the "Company") announces that production and unit cost guidance have been revised for 2014. In addition, the Company will delay completion of a portion of the Phase One Expansion (the "Phase One Expansion") indefinitely due to forecast cost overruns.
Key Points
- Based on gold production and estimated unit costs achieved during the first six months of 2014, the Company is revising operating guidance as follows:
| 2014 (old guidance) | 2014 (new guidance) | |
| Gold production (oz) | 85,000 - 95,000 | 75,000 - 80,000 |
| Cash cost (US$/oz) | $690 - $740 | $825 - $900 |
| AISC (US$/oz) | $800 - $900 | $915 - $1,010 |
- Following retendering of final construction packages for the Phase One Expansion, capital costs have increased from the original estimate of US$50 million to an estimate of US$63 million.
- Due to a combination of lower cash flow than budget during the first six months of 2014 and the revised capital estimates to complete the Phase One Expansion, the Company has decided to delay completion of a portion of the expansion indefinitely.
- The Company intends to complete the four main circuits in work packages 1 ("WP1") and 2 ("WP2") as well as honour any outstanding procurement commitments. WP1 and WP2 consist of the carbon regeneration kiln, intense leach reactor, elution circuit and electro-winning cells. The timeline for mechanical completion of WP1 and WP2 remains before year end 2014. The Company is working with the mining and environment authorities to modularly commission and permit WP1 & WP2.
- Work packages 3 ("WP3") and 4 ("WP4") will be delayed indefinitely. WP3 consists of two high rate thickeners and three Carbon-In-Leach tanks. WP4 consists of a triple deck wet screen, cyclones, pumps and trash screen.
Geoff Chater, Luna President & CEO stated, "Luna needs to determine the optimum production profile for sustained long life production at the Aurizona mine. The Company is examining the best allocation of its limited capital and cash flow in order to right-size production in the current gold price environment."
Additional details will be provided when the Company publishes its three and six month financial and operating results on August 14, 2014.
Second Quarter 2014 Results Conference Call
Luna will release its financial results for the three-month and six month period ending June 30, 2014 ("Second Quarter 2014") at 7:00 a.m. Eastern Time on Thursday, August 14, 2014.
Luna's Second Quarter 2014 financial statements, and Management's Discussion and Analysis will be available on Luna's website, www.lunagold.com, and www.sedar.com.
The Company will also host a conference call at 11:00 a.m. Eastern Time on Friday, August 15, 2014, to review the financial results and discuss the outlook for the remainder of 2014.
Conference Call Dial-In Details
| Toll Free (North America): | +1 866 223 7781 |
| Toronto Local and International: | +1 416 340 2216 |
| Webcast: | www.gowebcasting.com/5611 |
A replay of the call will be available on Luna's website.
About Luna Gold Corp.
Luna is a gold production and exploration company engaged in the operation, discovery, and development of gold projects in Brazil.
On behalf of the Board of Directors
Geoff Chater - President and CEO
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 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.