Luna Gold Announces Results for the Second Quarter of 2013

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/14/13 -- Luna Gold Corp. (TSX:LGC)(LMA:LGC)(OTCQX:LGCUF) ("Luna," or the "Company") today announced its operational and financial results for the three-month period ended June 30, 2013 ("second quarter").


Operational and Financial Results (all financial amounts in US dollars)

--  Gold production of 18,853 ounces in the second quarter at an average
    unit cash cost of production of $681 per ounce and an average all-in
    operating cash cost of $938 per ounce 
--  Revenues of $45.4 million at an average realized gold price of $1,525
    per ounce for first half 2013 
--  Gross profit of $16.4 million for first half 2013 
--  Net income of $8.2 million ($0.08 per share) for first half 2013 
--  Operating cash inflow before working capital movements of $13.5 million
    ($0.13 per share) for first half 2013 

                                                         Q2 2013   YTD 2013 
Ore mined (tonnes)                                       402,029    913,502 
Ratio of waste to ore                                        2.9        3.6 
Ore grade mined (g/t)                                       1.66       1.53 
Processed ore (tonnes)                                   383,492    831,482 
Average grade processed (g/t)                               1.69       1.53 
Average recovery rate (%)                                     92%        91%
Gold production (ounces)                                  18,853     36,056 
Gold sales and gold delivered to Sandstorm (ounces)       22,819     35,836 
Average realized gold price (excluding Sandstorm                            
 sales) (USD per ounce)                                    1,479      1,525 
Cash cost of production (USD per ounce)                      681        726 
All-in operating cash cost of production (USD per                           
 ounce)                                                      938      1,013 
Revenue (USD millions)                                      28.1       45.4 
Gross profit (USD millions)                                 10.8       16.4 
Net income (USD millions)                                    8.7        8.2 
Earnings per share (Basic and Fully diluted) (USD)          0.08       0.08 
Operating cash inflow before working capital movements                      
 (USD millions)                                              9.3       13.5 
Operating cash inflow before working capital movements                      
 per share (USD)                                            0.09       0.13 

Company Developments

--  Aurizona process plant expansion ("Phase I Expansion") is progressing
    and remains on budget as at June 30, 2013. The overall EPCM progress
    reached 92% complete with engineering at 96% complete, procurement
    awarded at 85% complete and construction at 9% complete. Transition of
    project management and controls team to site is underway. Handover of
    engineering drawings to the construction team has been completed and 30
    of 35 procurement packages have been awarded as at June 30, 2013 
--  Gold production for the 2013 full year is now targeted between 80,000
    and 90,000(2) ounces (previous guidance was 95,000 to 105,000 ounces) at
    an average cash cost per ounce in the range of $670 to $690 per ounce
    (previous guidance was $705 to $715 per ounce) as a result of the
    Company's focus on producing less gold at higher operating margins over
    the remainder of the year given the expected lower price of gold over
    this period 
--  Phase II pre-feasibility study to evaluate Aurizona gold production
    targets of 200,000 to 300,000 ounces per annum led by Micon
    International Ltd. with DRA Americas Inc. and several other consultants
    progressed on budget and schedule in the mine design, process design,
    hydrological, geotechnical, tailings, geochemical and infrastructure
--  The Company filed a National Instrument 43-101 technical report updating
    Measured, Indicated and Inferred Mineral Resources and Proven and
    Probable Mineral Reserves at its Aurizona Gold Mine, increasing Proven
    and Probable Mineral Reserves to 2.36 million ounces at the Piaba Gold
    Deposit, representing a 222% increase when compared to the Piaba July
    2010 reserve statement 
--  The Company adopted a number of cost reduction initiatives including a
    20% cash compensation reduction for Board of Directors and Executive
    Management, rationalizing exploration programs to care and maintenance,
    and elimination of non-essential expenditures 
--  Peter Mah, Vice President of Operations has been promoted to Chief
    Operating Officer 
--  The Company announced the identification of the two kilometre long Touro
    Northwest shear zone at Luna Greenfields 
--  Dr. Thomas O'Neil has resigned from the Board of Directors. 

For complete details on the second quarter 2013 results, please refer to the Financial Statements, and Management Discussion and Analysis on SEDAR, or on the Financial Statements page of the Company's website. Second quarter and year-to-date results have been incorporated into the Company's latest Investor Presentation.


Gold production for the 2013 full year is now targeted between 80,000 and 90,000 ounces (previous guidance was 95,000 to 105,000 ounces). This downward revision is due to the Company's focus to producing less gold at higher operating margins over the remainder of the year given the expected lower price of gold over this period as compared to the original forecast at the beginning of 2013. This new production target is expected to result in less waste stripping and overall operating costs. As a result, the Company expects full year cash costs per ounce to be in the range of $670 to $690 per ounce (previous guidance was $705 to $715 per ounce). As a result of this new guidance, the 2013 second half year gold production target is between 44,000 and 54,000 ounces at a cash cost per ounce in the range of $630 to $660 per ounce.

The Company's priority remains to complete the Phase I Expansion within the original budget of $50 million. The expansion remains on track and on budget for completion by the end of Q4 2013. The Company intends to draw down the Sandstorm Subordinated Debt Facility in Q3 2013, to provide assistance in funding the completion of the Phase I Expansion. In addition, the Company continues to receive a 17% contribution of capital from Sandstorm for the Phase I Expansion on a timely basis.

With the Company's focus on positive cash flow and increasing margins, the Company has implemented further initiatives with the target to increase shareholder returns in the near term, while focusing on future growth at the Aurizona Gold Mine:

  - Salary Reductions                                                       
  The Board of Directors and Executive Management of the Company have       
  initiated a 20% reduction in cash based remuneration for the following 12 
  month period.                                                             
  - Exploration Placed on Care Maintenance                                  
  The Company has placed all Greenfield exploration programs on care and    
  maintenance in order to preserve cash and to focus on completion of the   
  Phase I Expansion program. As a result, a number of exploration employees 
  have been released from the Company.                                      
  - Cost Reduction Programs                                                 
  All non-essential corporate expenditures and operating programs have been 
  eliminated. All areas of the business have been reviewed and cost         
  reduction programs are now in effect.                                     


The ore grade mined in the three and six months ended June 30, 2013 was higher than during the comparable periods of 2012 due to mining higher grade areas of the Piaba pit. This was a direct result of clearing permits received and the planned increase in waste stripping activities in Q1 2013 to access higher grade ore to maintain gold production targets at the plant.

Plant throughput in Q2 2013 was lower than the comparable quarter of 2012 due to a planned plant maintenance shutdown that was longer than anticipated to repair welds on the SAG shell. This, combined with the drought conditions in the first quarter of the year, causing a shortage of water available for processing, resulted in lower plant availability in the first half of the year. Therefore, a plan to process higher grade material was developed to achieve targeted gold production levels. Gold recovery during the three and six months ended June 30, 2013 was higher than the comparative periods in 2012 due to improved process control practices, a better understanding of ore blends, improved reagent control and the improved profiling of activated carbon usage. In addition, there was an increase in efficiency with the elution circuit and increased availability of the acid washing circuit.

Gold production during the three and six month periods ended June 30, 2013 was 9% and 8% higher than the comparable periods of 2012. The increase was the result of improvements in gold recovery and higher grade ore processed, which was partially offset by lower volumes of ore processed through the mill. Some of the higher grade ore consisted of laterite material with a higher work index, and this resulted in lower tonnage throughput.


"Luna continues to focus on maximizing margins and cash flow," stated John Blake, Luna's President and CEO. "Our response to the current low gold price environment is to continue focusing on cash management and operational efficiencies in order to maximize profitability. By utilizing cash generated from production and drawing down the Sandstorm debt facility, Luna is fully funded to deliver Aurizona's Phase I Expansion on time and on budget. I remain confident this focus will continue to deliver value to our shareholders."


Luna will host a conference call to discuss both the Company's financial results and on-going corporate developments. This call is scheduled to take place tomorrow, August 15, 2013 at 11:00 a.m. Eastern Daylight Time.

Toll Free (North America):             +1 877 440 9795                      
Toronto Local and International:       +1 416 340 8527                      

A replay of the call will be available until August 29, 2013. The replay may be accessed by dialing either +1 905-694-9451 (Toronto Local and International) or +1 800-408-3053 (Toll Free). The passcode for the replay is 1948527. Call repay will also be available on the Conference Call Playback page of the Company's website.

About Luna Gold Corp.

Luna is a gold production company engaged in the operation, expansion, and exploration of gold projects in Brazil.

On behalf of the Board of Directors


John Blake - 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.

Luna Gold Corp.
Patrick Balit
Investor Relations Manager
+1 604 568 7993