Luna Gold renegotiates earn-in terms for the Cachoeira project
Luna Gold Corp. announce that it has renegotiated the terms of the agreement relating to its Cachoeira project, which was originally announced on October 9, 2007. The amended terms extend the period of time that Luna has to complete its earn-in obligations to acquire 100% of the Cachoeira project, subject to a royalty and back-in rights. The original terms have been amended as follows:
– Timeframe for complying with the remaining exploration expenditure requirement has been extended by one year to October, 2010 – Date for completion of a NI 43-101 compliant resource estimate has been extended by one year to October, 2010
– Program date for start of commercial gold production at Cachoeira has been extended by one year to October, 2012
Luna’s CEO, Jim Bahan comments, “Luna’s progress at Cachoeira has been excellent and it has adhered to the first year terms and expectations. This has been recognized by the Vendors. The extended time provided under the amendment will allow the Company to better manage its resources during the coming year, with a clear focus on advancing its Aurizona project.”
Upon Luna funding the remaining balance of the required direct exploration expenditures at Cachoeira, of approximately R$6M, it will acquire a 100% interest in the property, subject to a 4.0% operating royalty of which Luna may buy back up to 2.0% by paying the Vendors a total of US$4M. One of the Vendors, CNM, a subsidiary of Kinross Brazil, has the right to back-in for a 51% interest by refunding Luna’s exploration expenditure should a NI 43-101 compliant resource estimate, containing mineable reserves exceeding 2 million ounces of gold, be completed by October, 2010.
In the event that the program date for commercial gold production is not achieved, Luna will pay the Vendors a total of US$200,000 per year, in lieu of the operating royalty, until such time as commercial gold production is achieved.
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.