somebody check me on these numbers. i am figuring what the royalty on aurizona is worth since the property is already producing trial amounts of gold!!!!!
LunA Goldd has acknowledged pulling 600 ounces of gold out of that aurizona project in brazil. that was as of the May 21 Luna press release copied down below.
sounds like aurizona will be up and running for real this week.
say aurizona were to produce say 25,000 ounces in the second half starting july 1. that would mean sandstorm is entitled to buy 17 percent of 25,000 oz or 4,250 oz. in that half year.
Sandstorm would pay the contract price of u.s.$400 per troy ounce. Since gold just crossed u.s.$1200 going north, let's assume sandstorm can sell the gold for that price per ounce. that would mean a gross profit of u.s.$800 per ounce, or $3.4 million. and that is one six month period at not quite full production.
the project is slated to produce 62,000 oz a year for 11 years.
Seventeen percent of that is 10,540 ounces annually. times $800 equals u.s.$8,432,000. that's a gross figure, not a net figure. still, really nice numbers, and this is just the first royalty deal to come to fruition.
SANDSTORM DESCRIPTION OF LUNA ROYALTY
Aurizona Gold Project
The Aurizona Gold Project ("Aurizona") is located in Maranhão State in northern Brazil. It is 100% owned and operated by Luna Gold Corp. ("Luna") (TSXV:LGC). Aurizona will be an open-pit mine with a gravity and carbon-in-leach milling operation expected to average 62,000 ounces of gold production over the expected mine life. The project is currently in the construction stage and is expected to produce gold in the first half of 2010.
Aurizona is interpreted to be an orogenic gold deposit hosted in a greenstone belt of the São Luis Craton. There are a number of mineralized bodies on the property, but work to date has focused on the Piaba and Tatjuba deposits on which the current resource is based. As of July, 2009 Aurizona has proven and probable reserves of 729,000 ozs of gold and a resource of 909,000 ozs of gold in measured and indicated categories (resources are inclusive of previously stated reserves) and 403,000 ozs of gold in the inferred category. Refer to the table here for more details on the reserve and resource. To view the NI 43-101 technical report click here.
Sandstorm Transaction
Sandstorm has acquired 17% of the life of mine gold production from Aurizona for an upfront payment of US$17.8 million in cash and 5.5 million common shares of Sandstorm plus ongoing per ounce payments equal to the lesser of US$400 and the then prevailing market price per ounce of gold. Sandstorm will not be required to contribute to capital or exploration expenditures in respect of the mining operations of Aurizona.
If Luna decides to develop an underground mine (the "Underground Mine") on Aurizona, Sandstorm will also have the right (but not the obligation) to purchase 17% of the payable gold from the Underground Mine, at a per-ounce price equal to the lesser of US$500 and the prevailing market price, in exchange for paying 17% of the capital expenditures incurred to determine the economic viability and to construct the Underground Mine.
LUNA PRESS RELEASE OF May 21, 2010
Luna Gold Announces Full Process Commissioning And Commencement Of Gold Production At Its Aurizona Gold Project
Vancouver, May 21, 2010 - Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") is pleased to announce that commissioning of the Aurizona gravity circuit, as described in our press release of March 1 2010, has been completed and gold for refining is being produced from that part of the plant. The carbon-in-leach ("CIL") plant and ancillary facilities are also substantially completed, including duty performance testing. The complete plant is expected to pass to operations, for full process commissioning, early next week. Work continues on the 69kV power line with expected completion in June. Meanwhile, the plant will continue to operate with the Company's diesel generators.
Luna's CEO, Jim Bahan, comments, "The significant milestone of gold production has been achieved at Aurizona. We are very pleased at the quick evolution of Luna Gold from an exploration company to producer status. Site preparation of Aurizona began in August 2009 and 9 months later we were pouring gold. We look forward to full commercial production in the near future. The milling plant is already working close to feasibility study expectations despite having only two of the three ball mills in operation. The prospects are good for a significant increase in the plant throughput rate once the plant has been fully commissioned and optimized. As of today, over 600 ounces of gold have been produced."
Photographs of construction and production activities are taken at regular intervals and may be viewed on the Company's website at lunagold.com.
About Luna Gold Corp.
Luna is a mineral exploration and development company engaged in the acquisition, exploration, and development of gold resources and advanced stage gold exploration projects in Brazil. The Company is currently commissioning its Aurizona gold project in Maranhão, Brazil.
On behalf of the Board of Directors
LUNA GOLD CORP.
Jim Bahan - CEO
Website: www.lunagold.com |
