Luna Gold renegotiates Aurizona Goldfields share purchase agreement
Tue Jan 6, 9:00 AM
ca.news.finance.yahoo.com
VANCOUVER, Jan. 6 /CNW/ - Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") is pleased to announce that Eldorado Gold Corporation ("Eldorado") and Brascan Recursos Naturais SA ("Brascan"), a wholly owned subsidiary of Brascan Brasil, have agreed to defer for up to one year the payments due on the second anniversary of the closing of its agreement (the "Agreement") to acquire 100% of the issued shares of Aurizona Goldfields Corporation ("Aurizona"), as announced in the Company news release of December 21, 2006.
The terms of the Agreement require Luna to make a series of staged payments, some of which are conditional upon the project reaching commercial production, to each of Eldorado and Brascan in exchange for the shares of Aurizona. The second anniversary payments (the "Payments"), contractually due on January 31, 2009, consist of US$1.5 million to each of Brascan and Eldorado, and a further US$670,000 due to Brascan in lieu of shares in Luna. These second anniversary payments represent the final pre-production payments.
The Agreement terms have been amended to permit the deferment of the Payments until January 31, 2010; however, any portion of the payments outstanding as of July 31, 2009, shall be increased by 10% of the amount outstanding.
"This Agreement has removed a significant short term financial burden on the Company and we thank Eldorado and Brascan for their support," stated Jim Bahan, Luna's CEO. "Although the market is difficult, the Company believes the gold sector will remain buoyant and enters the New Year with great optimism."
In addition, Mr. Bahan stated that "Since the Piaba Feasibility Study was completed, the Brazilian Real has weakened by approximately 25% compared to the US dollar, resulting in a lower capital requirement to construct the project and significantly lower operating costs which were estimated in US dollars. Another potential benefit is that the project is within a designated Brazil development zone and eligible for fiscal benefits, including federal and state tax reductions and development loan finance."
He further added "The Company is currently considering conventional equity and loan finance opportunities, as well as reductions of the initial capital investment further by optimizing certain project activities, such as the tailings dam and power line."
Correction
In its press release of December 12, 2008 reference "Luna Gold renegotiates earn-in terms for the Cachoeira project" mention was made of CNM as a Kinross Brazil subsidiary company. Kinross wishes to clarify that CNM "Companhia Nacional de Mineração", is a wholly-owned subsidiary of Kinross Gold Corporation. Luna apologises for this error.
About Luna Gold Corp
Luna is a mining exploration company focused on the acquisition, exploration, and development of gold resources and advanced stage gold exploration projects in northeastern Brazil.
On behalf of the Board of Directors
LUNA GOLD CORP.
Jim Bahan - CEO
Website: www.lunagold.com
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this press release.
Regulatory Footnotes
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the United States Securities Act of 1933 and applicable state securities laws or an exemption from such registration is available.
Forward-Looking Statements:
Statements in this release that are 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, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future. 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.
Contacts
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