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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Bearclaw Capital Corp | TSXV:BRL | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.015 | 0.015 | 0.02 | 0 | 01:00:00 |
Hot Features
Premium
Luna Gold Corp. (TSX VENTURE:LGC)(BVLAC:LGC) ("Luna" or the "Company") today
announces its results for the three and six months ended June 30, 2011. The
complete financial statements and management discussions and analysis are
available for review at www.lunagold.com and should be read in conjunction with
this news release.
Overview
Luna Gold Corp. (the "Company") is a publicly listed company on the TSX Venture
Exchange trading under the symbol "LGC". The Company is actively engaged in the
operation, exploration, acquisition and development of gold properties in
Brazil. The Company currently has one gold mining operation, one development
project and one large greenfield exploration project located in northeast
Brazil.
The Aurizona gold mining operation ("Aurizona") consists of an open pit mine and
gold process plant. Aurizona consists of the Piaba and Tatajuba deposits and
over 10 near mine exploration targets which are being actively explored by the
Company. It covers approximately 15,500 hectares of land and includes a mining
license and three exploration permits.
The Cachoeira gold project ("Cachoeira") is a development gold project with a
National Instrument 43-101 compliant resource estimate in three gold deposits
consisting of quartz vein systems, hydrothermally altered host rocks and
stockworks within a north-south trending shear zone.
The Maranhao Greenfields exploration property ("Maranhao Greenfields") is
located next to Aurizona and consists of an extensive landholding of exploration
licenses totalling 190,000 hectares. This unexplored land holding is highly
prospective due to its location in the southern extension of the Guyana Shield
and displays strong geologic and structural similarities to major West African
gold deposits. The area contains over 100 artisanal gold workings that are being
explored by the Company.
The Company's near term focus is to:
-- Significantly increase the size of the Aurizona mineral resource and
release an updated NI 43-101 resource estimate for the Piaba gold
deposit and advance certain near mine exploration targets to drill
stage;
-- Increase Aurizona gold production above current feasibility study levels
through plant optimization and plant expansion;
-- Complete a scoping study on the Cachoeira resource and advance the
project to a feasibility study; and
-- Continue the exploration programs at Maranhao Greenfields to define
drill targets for the 2012 exploration season.
The Company's longer term focus is to:
-- Increase Aurizona gold production to 100,000 ounces per annum;
-- Continue to invest in brownfield exploration activities to attempt to
increase the mineral resources and mineral reserves at Aurizona to
replace production and provide a longer mine life;
-- Develop Cachoeira as an organic growth pipeline project for the Company;
and
-- Identify new gold resources through the exploration of the 190,000
hectare Maranhao Greenfields property and business development programs.
HIGHLIGHTS
-- Net loss was $7.7 million in Q2 and was $7.5 million for the year to
date;
-- Operating cash outflow before working capital was $5.5 million in Q2 and
was $6.3 million for the year to date;
-- Successfully completed the planned Aurizona plant upgrade in April and
recommenced ramp up of gold production;
-- Aurizona gold production was approximately 5,600 ounces in Q2 and was
approximately 14,800 ounces for the year to date; Gold production since
the plant upgrade in April has steadily increased month on month;
-- The Company began trading on the Lima Stock Exchange under the symbol
LGC;
-- The Company closed a $30 million Senior Secured Credit Facility with
WestLB AG; and
-- Aurizona resource definition drilling continued with significant gold
intercepts reported in Q2 including:
-- 19.00 metres @ 4.67 g/t Au and 53.00 metres @ 2.09 g/t Au;
-- 44.00 metres @ 4.94 g/t Au including 5.00 metres @ 30.51 g/t Au;
-- 48.00 metres @ 3.29 g/t Au including 12.00 metres @ 7.93 g/t Au; and
-- 55.00 metres @ 4.15 g/t Au including 17.00 metres @ 7.80 g/t Au.
-- The Company significantly strengthened its operational management team
in Q2 with the additions of a Vice President Operations, General Manager
of Aurizona, Mining Manager of Aurizona and Brazil Director of
Exploration.
OUTLOOK
-- Aurizona gold production target for the 2011 year revised to
approximately 40,000 ounces for the 2011 year at a targeted cash cost of
between $900 and $915 per ounce. The second half of the 2011 year
targeted cash cost(1) is between $620 and $640 per ounce of production;
-- The Company remains on target to complete 30,000 metres of the ongoing
40,000 meter Aurizona exploration drill program and release an updated
NI 43-101 compliant resource in Q4 2011; and
-- Cachoeira and Aurizona Expansion scoping study to be completed and the
results released in Q2 2012.
AURIZONA GOLD MINE - MARANHAO STATE, BRAZIL
The Aurizona gold mine is wholly-owned by the Company and is situated in the
municipality of Godofredo Viana in Maranhao State, Brazil, near the coast of the
Atlantic Ocean. Aurizona contains the Piaba and Tatajuba deposits and over 10
near mine exploration targets. The area is covered by a mining licence and three
exploration permits. The Tatajuba deposit is located within an exploration
permit which is in the process of being converted to a mine license.
Operating Data
---------------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
---------------------------------------------------------------------------
(tabled amounts are expressed in
thousands of US dollars) 2011 2010 2011 2010
---------------------------------------------------------------------------
Mined waste - tonnes 9,873 278,670 357,909 388,939
Mined ore - tonnes 113,377 276,011 224,986 623,958
Ratio of waste to ore 0.1 1.0 1.6 0.6
Ore Grade mined - g/t 1.27 0.97 1.52 1.13
Processed ore - tonnes 210,558 138,960 503,951 138,960
Average grade processed - g/t 1.27 1.58 1.22 1.58
Average recovery rate % 65% 17% 75% 17%
Gold produced (ounces) 5,595 1,217 14,804 1,217
Gold sold (ounces) 6,924 739 15,282 739
Total cash costs (per ounce)(1) $1,790 $2,846 $1,379 $2,846
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) Cash cost is a non IFRS measure. See "Non IFRS Measures".
Mining production
The Company mined approximately 123,250 tonnes of material, of which
approximately 113,377 tonnes was ore at an average head grade of 1.27 grams per
tonne in Q2. This represented a reduction of 78% of total material mined
compared to the prior year. The six months mining production in the current year
represented a 43% reduction of the total material mined compared to prior year
as well. This was mainly driven by the demobilization of the mining contractor
on site and drawdown of stockpiled ore.
Early in the quarter, the mining contractor engaged at Aurizona had completed
its two year contract with the Company and the contract was not extended further
resulting in the demobilization of the contractor from site. In preparation for
the wet season, the Company had established a run of mine ("ROM") stockpile with
capacity for three months ore supply to the mill. In the absence of a mining
contractor and the onset of the wet season these stocks were allocated to feed
the mill for April, May and June until the mobilization of a new mining fleet to
Aurizona, which was completed at the end June 2011. This fleet is now
operational and mining has recommenced.
Mill Processing
Production in Q2 and the current year to date were significantly higher than
comparative periods as the plant began commissioning in early 2010 and first
gold production was achieved in Q2 2010. Current quarter production was lower
than the previous quarter due to the planned shutdown in April to implement
plant improvements to deliver consistent and reliable production for the future
of the operation.
Commissioning of the Aurizona plant has confirmed the process plant construction
did not deliver key process and operational performances as designed. Luna
Gold's management and the Company's consulting engineers identified major and
minor modifications required to achieve reliable and consistent feasibility
design performance. Improvements and upgrades will proceed progressively while
production continues.
The upgrade, completed in April, addressed the following plant improvements:
-- Installation of a reduction gearbox to reduce the SAG rotation speed
from 94% to 74% critical speed;
-- Installation of an inching gearbox for safe and efficient mill liner
changes;
-- Complete mill reline and ball charge;
-- Installation of a trash screen prior to the carbon in leach ("CIL")
tanks and a carbon recovery screen after the CIL tanks;
-- Installation of a pinion and commissioning #4 ball mill;
-- Repairs to the apron feeder; and
-- Replacement of thickener pumps.
This necessary upgrade was completed with 19 days of plant downtime for the
operation resulting in low production for April.
The speed reduction of the SAG was successfully implemented, however the
retro-fit wet seal in the SAG continued intermittent water and dust
contamination in the hydraulic oil supply for the SAG bearings. Intermittent SAG
mill downtime and phased changes in the mill process circuit were required to
re-commission the process plant in order to reach Feasibility Study production
levels. Gold recoveries in May were low with improvements in June. Blending on
the ROM stockpile area by grade and ore type in last half of June has improved
recoveries and throughput tonnes.
Subsequent to quarter end, a further 5 day plant shutdown was completed and the
SAG mill chute liners were successfully sealed resolving the contamination in
the hydraulic oil supply. In addition, improvements were made to the grizzly to
reduce downtime and improve feed size consistency. July gold production
continued to improve over the previous month with approximately 3,375 ounces
produced.
Recoveries are continuing to improve by minimizing carbon breakdown and loss to
tails through optimizing grind and particle size classification fed to the CIL.
Metallurgical testing on the ore blending is progressing to maximize thickener
performance and enable future ore blending flexibility.
The production results above demonstrate a positive upward trend in all key
performance indicators and the continued improvements are expected to result in
the achievement of feasibility gold production targets in Q3 and consistent
production in Q4 and onwards.
Cash Costs (1)
Cash cost for 2011 remained higher than the targeted rate due to lower ore
volumes mined and lower ore throughput resulting in the low gold production
rates. This has resulted in the higher cost per unit due to the higher
proportion of fixed costs related to this operation. The current quarter is
especially high due to the planned shutdown of the plant and slower than
anticipated ramp up after the successful plant upgrades.
Cash cost in general were lower than the comparative 2010 periods because the
operations were in its preliminary ramp up stage in 2010.
AURIZONA EXPLORATION
The Company's exploration teams continued to advance exploration at Aurizona.
The Phase 1, 20,000 metre drill program was completed in July 2011 and was
extended by a further 20,000 metres. The Company's exploration strategy of
surface exploration techniques combined with magnetic geophysical surveys is
proving highly successful in defining the principal mineralized shear zones
which host the near mine targets.
Diamond Drilling
The Company currently has eight drill rigs in operation at the Piaba deposit.
Assays from 51 holes totalling 14,346 metres were received and samples from 14
additional holes are currently at the assay lab. Drilling is focused on
infilling over the 3 kilometre strike length of the Piaba deposit to increase
measured and indicated mineral resources. Holes are being drilled on 100 metre
spaced sections to a maximum depth of minus 300 metres RL. Certain infill holes
are also being completed to convert in pit inferred mineralization to the
measured and indicated categories. On completion of the Piaba drill program, the
rigs will be moved to the Tatajuba deposit and the Boa Esperanca near mine
exploration target, which is drill ready following a trenching program which was
completed in Q1. Recent significant diamond drill intercepts (not true widths)
from the ongoing program are listed below:
-- 19.00 metres @ 4.67 g/t Au including 3.00 metres @ 14.08 g/t Au and 2.00
metres @ 14.32 g/t Au;
-- 44.00 metres @ 4.94 g/t Au including 0.50 metres @ 21.40 g/t Au, 0.50
metres @ 14.35 g/t Au and 5.00 metres @ 30.51 g/t Au;
-- 48.00 metres @ 3.29 g/t Au including 12.00 metres @ 7.93 g/t Au and 1.00
metres @ 9.84 g/t Au ; and
-- 55.00 metres @ 4.15 g/t Au including 17.00 metres @ 7.90 g/t Au.
Soil Surveys
Assays have been received for the majority of samples collected near the mine
site and the data is being processed and new targets prioritized. Soil surveying
was completed in the unexplored western portion of the Aurizona area (LDW Grid)
which is targeting the discovery of new gold mineralization within extensions to
the west-southwest trending structures that host the gold mineralization in the
main Aurizona area. Assay data is being received.
Trenching
Trench samples from the Ferradura and Conceicao near mine targets are in the
laboratory and due for delivery in August.
Permitting
The process of converting the Tatajuba exploration licence, which hosts the
Tatajuba deposit, to a mining license advanced during the quarter with the
preparation of the mine application documentation due for submittal to the
National Department of Mineral Production in Brazil in August.
Auger Drilling
Auger drill samples from the Micote near mine target were received defining near
surface mineralization extending west from the Micote garimpo pit. Auger and
reverse circulation drilling was completed at the Piaba East target area with
the objective of defining extensions to the main Piaba ore body beyond the
current eastern boundary of the current resource model. Samples are at the assay
laboratory. Auger drilling recommenced at the newly defined Agenor near mine
exploration target and drilling is ongoing. An auger drill program was completed
at the Pirocaua SE target and samples are at the assay laboratory.
CACHOEIRA GOLD PROJECT
The Cachoeira Gold Project is located in northern Brazil in the Gurupi
Greenstone Belt, approximately 220 kilometres southeast of the Para State
capital of Belem and about 270 kilometres northwest of the port city of Sao
Luis, Maranhao State. Cachoeira comprises one contiguous block consisting of two
mining and two exploration licenses covering approximately 3,826 hectares and an
application for an exploration license covering approximately 916 hectares.
In October 2007, the Company announced that it had finalized an option agreement
whereby it could earn a 100% interest in the property from a consortium of
vendors. According to the terms of the agreement the Company can earn its
interest by making a one-time cash payment and by incurring work expenditures of
at least BRL 9.5 million over a 50 month period. As at the date of this MD&A,
the Company had achieved this commitment. The Company's interest in the property
is subject to a 4.0% net profits royalty with a provision for a partial buy-out
of this royalty.
The major asset associated with Cachoeira is a series of shear zone hosted gold
deposits consisting of quartz veins, stockworks and wall rock alteration. Three
deposits, Tucano, Arara and Coruja, have been defined to date within the
north-south trending Cachoeira Shear Zone. In December 2010, the Company
released a maiden NI 43-101 compliant mineral resource estimate at Cachoeira and
filed the technical report on February 7th, 2011 on SEDAR.
Cachoeira Regional
The Company completed an auger drill program at the Arara North target and
samples are at the assay laboratory.
MARANHAO GREENFIELDS EXPLORATION PROPERTY - MARANHAO STATE, BRAZIL
The Maranhao Greenfields exploration property is located to the southwest and
southeast of Aurizona and contains multiple shear zones and over 100 historic
artisanal gold workings (garimpos). It consists of over 190,000 hectares of
contiguous exploration licenses and is located within the Sao Luis Craton,
southeast of the Guiana shield, which hosts several major gold deposits
including Rosebel and Las Cristinas. Geologic reconstruction of the South
American and African continents places the Sao Luis Craton in close proximity to
the Birimian Gold Belt of West Africa. Strong geologic and structural
similarities exist between the Sao Luis Craton, the Guiana shield and the West
African Craton. The area is characterized by low relief and an extensive
sedimentary cover sequence with deep weathering profiles. Historic exploration
in the district was limited to soil and rock sampling, auger drilling,
geophysical surveys and some shallow reconnaissance drill holes.
The Company currently has exploration crews working four targets simultaneously
in the Maranhao Greenfields project area. The Company continues its exploration
programs throughout the wet season although at reduced rates.
Areal Grid
Full soil assay results have been received for the Areal target and a ground
magnetic survey. These programs have identified intrusion related gold
mineralization associated with several granitoid bodies.
JST Grid
Assay data for soil and channel samples from the JST Grid have been received and
will be reported in due course.
PC, CPB, PJP BML Grids
Soil sampling and regolith mapping was completed at the PC, CPB and PJP grids in
the quarter which host numerous historic garimpo workings. Soil sampling
continued at the BML target area (eastern area) and work is progressing well.
This grid will be completed within 1 month. The Company is aggressively
exploring its extensive and prospective landholding at Maranhao Greenfields to
deliver drill targets on 100% owned mineral rights in 2012.
SUMMARY OF OPERATING RESULTS
---------------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
---------------------------------------------------------------------------
(tabled amounts are
expressed in thousands of
US dollars) 2011 2010 2011 2010
---------------------------------------------------------------------------
Revenue 9,179.4 829.5 19,536.8 829.5
Operating expense (10,990.7) (2,393.4) (19,719.6) (2,393.4)
Depreciation and
amortization (1,203.5) (46.9) (2,105.6) (46.9)
---------------------------------------------------------------------------
(3,014.8) (1,610.8) (2,288.4) (1,610.8)
General & administration(2) (2,178.1) (1,037.0) (3,240.1) (2,056.1)
Exploration expense (2,236.4) (725.7) (3,635.1) (788.9)
Financing (cost) income, net (624.5) (78.6) (980.1) (47.8)
Unrealized gains (losses)
from derivative liability 737.3 (520.9) 2,365.6 (520.9)
Foreign exchange and other (375.1) 349.5 275.3 354.1
---------------------------------------------------------------------------
Net income (loss) (7,691.6) (3,623.5) (7,502.8) (4,670.4)
---------------------------------------------------------------------------
Basic/Diluted loss per share (0.02) (0.01) (0.02) (0.01)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(2) General and administration ("G&A") consists of general and
administrative expenses, professional fees and stock based compensation
charges.
The Company sold 6,924 ounces of gold for the current quarter and 15,282 ounces
of gold year to date for 2011. This was significantly higher than the
comparative periods as the Company was in the commissioning stage in 2010 and
began producing gold in Q2 2010. Likewise, operating expense was higher than the
comparative periods due to the increase in current period gold sales. Current
quarter operating expense was higher than the previous quarter due to higher
mechanical costs to modify and repair the issues related with the original
construction and higher reagent costs related to the blending of the ores in the
process plant.
G&A expense was significantly higher than comparative periods due to stock based
compensation expense related to new management. Excluding stock based
compensation, the G&A remained reasonably consistent with the comparative
periods. Exploration expense increased over the comparative periods as the
Company ramped up its exploration programs at Aurizona, Cachoeira and Maranhao
Greenfields during the latter part of 2010. In the current quarter, the Company
spent $1.5 million at Aurizona (capitalized in mineral properties for accounting
purpose), $1.0 million at Cachoeira and $1.3 million at Maranhao Greenfields.
The Company focused most of its cash on mine development and production in the
comparative periods resulting in lower amounts spent on exploration activities.
Net financing cost was higher due to the decrease in interest revenue from bank
balance as the average cash balance was lower in 2011 than in the previous year.
Due to the transition to IFRS, warrants outstanding were classified as a
derivative liability and were re-classified from share capital to liability.
This derivative liability is to be mark-to-market every period end and will
fluctuate based on factors such as Company's stock price and volatility. The
non-cash unrealized gains and losses resulted from the required revaluation and
expiry of warrants from the current quarter end. Foreign exchange loss was the
result of negative currency movements for the Company on its accounts payable
and funds held in foreign currencies.
Operating results - 2 year historic trend
---------------------------------------------------------------------------
(tabled amounts are expressed
in thousands of US dollars)(3) Q2 11 Q1 11
---------------------------------------------------------------------------
Revenue 9,179.4 10,357.4
Operating expense (10,990.7) (8,728.9)
Depreciation and amortization (1,203.5) (902.1)
---------------------------------------------------------------------------
(3,014.8) 726.4
General & administration(4) (2,178.1) (1,062.0)
Exploration expense (2,236.4) (1,398.7)
Financing (cost) income, net (624.5) (355.6)
Unrealized gains (losses) from derivative liability 737.3 1,628.3
Foreign exchange and other (375.1) 650.4
---------------------------------------------------------------------------
Net income (loss) (7,691.6) 188.8
---------------------------------------------------------------------------
Basic loss income per share (0.02) 0.00
Diluted loss income per share (0.02) 0.00
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(tabled amounts
are expressed
in thousands
of US dollars)
(3) Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q3 09
---------------------------------------------------------------------------
Revenue 13,656.7 1,620.3 829.5 - - -
Operating
expense (13,922.3) (5,576.2) (2,393.4) - - -
Depreciation
and
amortization (1,783.0) (303.8) (46.9) - - -
---------------------------------------------------------------------------
(2,048.6) (4,259.7) (1,610.8) - - -
General &
administration
(4) (1,320.7) (1,367.6) (1,037.0) (1,019.1) (813.4) (704.1)
Exploration
expense (665.4) (1,334.5) (725.7) (63.2) (576.1) (1,249.5)
Financing
(cost) income,
net (491.2) (327.4) (78.6) 30.8 977.4 277.6
Unrealized
gains (losses)
from
derivative
liability (899.0) 472.7 (520.9) - - -
Foreign
exchange and
other 519.1 30.4 349.5 4.6 (891.2) 1,593.0
---------------------------------------------------------------------------
Net income
(loss) (4,905.8) (6.786.1) (3,623.5) (1,046.9) (1,303.3) (83.0)
---------------------------------------------------------------------------
Basic loss
income per
share (0.01) (0.02) (0.01) (0.00) (0.00) (0.00)
Diluted loss
income per
share (0.01) (0.02) (0.01) (0.00) (0.00) (0.00)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(3) The quarterly comparatives from 2009 are presented under Canadian GAAP.
IFRS transition began on January 1, 2010.
(4) General and administration consists of general and administrative
expenses, professional fees and stock based compensation charges.
Revenue's began in Q2 2010 with the Company's first gold production and
increased up to Q4 2010 due to higher production output and rising gold prices.
However, production decreased due to the planned shutdown and plant upgrade and
the onset of the rain season resulting in lower revenues. Operating expenses
followed the same trend as gold sales with movements in quarterly operating
expense directly related to the number of ounces of gold sold within that
period. However, Q2 2011 was an exception due to the plant shutdown and upgrade,
which incurred additional costs related to restarting up the plant after
successfully implementing all the planned upgrades and modifications.
General and administration expense remained consistent quarter on quarter since
production began in Q2 2010, except for Q2 2011, where the increase from the
previous quarter was primarily due to an increase in stock based compensation
expense related to the new management additions.
Exploration expense was related to the Cachoeira and Maranhao Greenfield
exploration programs which began in Q2 2010. Variances between quarters were due
to the timing of executing the planned exploration programs and the weather.
Net financing costs were directly related to the interest expense on the
outstanding loan balance and interest income on the cash balance of the Company.
Unrealized derivative gains and losses quarter on quarter was driven by the
volatility in the Company's share price and its relation to the outstanding
warrants.
Foreign exchange movements each quarter are related to changes in the USD:BRL
exchange rate in relation to the Company's working capital accounts in Brazil.
LIQUIDITY AND CAPITAL RESOURCES
---------------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
---------------------------------------------------------------------------
(tabled amounts are
expressed in thousands
of US dollars) 2011 2010 2011 2010
---------------------------------------------------------------------------
Cash flows from
operating activities
- Before working
capital (5,496.9) (2,999.8) (6,298.6) (3,385.2)
- After working
capital (3,865.6) (4,707.1) (3,439.9) (6,357.1)
Cash flows from
financing activities 3,564.7 30,197.4 2,421.5 44,107.5
Cash flows from
investing activities (3,587.6) (8,335.1) (9,543.2) (24,193.8)
Effect of exchange
rates on cash 215.3 343.6 273.5 301.7
Net cash flows (3,888.5) (17,155.2) (10,561.6) 13,556.6
Cash balance 415.5 26,423.8 415.5 26,423.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------
At June 30, 2011, the Company had cash and cash equivalents of $0.4 million and
finished gold bullion inventory of approximately 1,898 ounces.
Q2 and year to date operating cash outflow before working capital was higher
than the comparative quarter due to the increase in net loss. Cash outflow after
working capital movements was lower than the comparative periods due to
increases in accounts payable. The Company's accounts payable balance increased
due to efforts to conserve cash while operations ramped up after the plant
shutdown and upgrade and the Company closed the WestLB AG refinancing. The
increase in accounts receivable included $1.2 million in gold sales, which were
received subsequent to quarter end.
Q2 financing activities included a payment of $1.7 million on the Aurizona
project debt facility. This was netted out by cash inflow from proceeds of
approximately $0.3 million from the exercise of stock options and an upfront
payment of $5.5 million from RMB to deliver gold in the following quarter. Cash
flow from financing activities was significantly lower than the comparative
quarter as the comparative quarter included the drawdown of the RMB debt
facility and equity financing. The current year to date financing activities
were similar to the quarter except for the additional payment of $1.7 million on
the Aurizona project debt facility made in Q1 and additional proceeds from stock
option exercised in the previous quarter.
Q2 and year to date investing activities included payments of $1.5 million and
$2.9 million respectively of capitalized exploration costs related to the
Aurizona resource definition drilling program. The balance of investment
activity cash outflow was related to equipment purchases and plant upgrades at
the Aurizona plant. Cash outflow from investing activities was significantly
lower than the comparative periods as the plant was substantially completed in
late 2010.
In July 2011, the Company closed a $30.0 million senior secured credit facility
with WestLB AG. The Company will use this financing to repay the remaining $10
million outstanding on the RMB Facility, fund working capital, and provide
funding for further capital improvements and sustaining capital requirements.
As at June 30, 2011, the Company had the following contractual obligations
outstanding:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(tabled
amounts are
expressed in Less
thousands of than 1 - 2 2 - 3 3 - 4 4 - 5 There-
US dollars) Total 1 year years years years years after
---------------------------------------------------------------------------
Long term
debt 18,548.7 9,271.4 5,902.7 2,569.4 569.4 235.8 -
Accounts
payables 11,076.9 11,076.9 - - - - -
Asset
retirement
obligation 6,490.1 - - - - - 6,490.1
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$30.0 million senior secured credit facility with WestLB AG ("WestLB")
In July 2011, the Company closed a $30.0 million senior secured credit facility
with WestLB. This facility is comprised of a $20.0 million senior secured term
loan (the "Term Loan") and a $10.0 million (Brazilian Real equivalent) senior
secured revolving loan (the "Revolving Facility"). The purpose of the Facility
is to refinance the Company's existing debt with RMB Resources and to fund
additional capital expenditures and working capital needs at the Aurizona gold
mine.
The Term Loan is a 5 year loan with semi-annual instalments commencing on July
1, 2012 and will bear interest at LIBOR plus 3.625%. The Revolving Facility will
be denominated in Brazilian Reais, matures on July 1, 2014 and will bear
interest at CDI plus 3.25%. Any outstanding commitments under the Revolving
Facility shall be repaid in full on the final maturity date.
The Company has provided security on the facility in the form of a first fixed
floating charge over the Aurizona operation, a first mortgage over the shares of
Mineracao Aurizona S.A. ("MASA") and of the rights, title and licenses
associated with the operation and a general security agreement by the Company in
favour of WestLB AG.
The Company shall maintain a debt service coverage ratio ("DSCR") to be greater
than 1.35, a loan life coverage ratio ("LLCR") to be less than 1.35 and a
reserve tail ratio ("RTR") to be greater than 30% over the life of the loan.
Subsequent to quarter end, the Company drew down $20 million on the Term Loan
and $10 million on the Revolving Facility.
Aurizona Project Debt Facility
In December 2009, the Company entered into a senior secured, project debt
facility (the "RMB Facility") in the amount of up to $15.0 million with RMB
Resources Inc. ("RMB") to assist in the completion of the Aurizona processing
plant. The RMB Facility was comprised of two tranches in the amount of $7.5
million each that bore interest at LIBOR plus 7.5% and was to be fully repaid by
December 31, 2012.
Subsequent to quarter end, this RMB Facility was repaid in full with the
proceeds from the Term Loan.
RMB $5.5 million prepaid gold agreement
In May 2011, the Company entered into a $5.5 million prepaid gold agreement with
RMB. In exchange for the upfront cash received by the Company, the Company will
deliver a total of 3,880 ounces of gold to RMB of which 2,730 ounces and 1,150
ounces will be delivered in the month of July 2011 and August 2011,
respectively.
Prior to the release of this MD&A, all of the ounces were delivered to RMB and
no further ounces remain owing.
Commitment from Acquisition of Aurizona Goldfields Corporation
In January 2007, the Company acquired the Aurizona property from Brascan Brasil
("Brascan") and Eldorado Gold Corporation ("Eldorado") in exchange for a series
of staged payments (the "Purchase Agreement"), some of which were conditional
upon the project reaching commercial production, as defined in the Purchase
Agreement. The Company has repaid all outstanding amounts in relation to this
agreement but remained liable for payments of $1.0 million payable to each party
on the first, second and third anniversary of the commencement of commercial
production of Aurizona. As defined under the terms of the Purchase Agreement,
the Company achieved commercial production on December 2, 2010 resulting in the
first payment becoming due and payable on December 2, 2011.
In July 2011, the Company entered into an agreement with Brascan and Eldorado to
amend the outstanding debt of $6.0 million of the Company to Brascan and
Eldorado. The Company issued promissory notes in the aggregate amount of $3.0
million to each of Eldorado and Brascan in connection with the Purchase
Agreement. In satisfaction of the aforementioned promissory notes, Brascan and
Eldorado will each receive $1.5 million in cash on or before December 2, 2011,
and 2,417,949 common shares of the Company.
FINAME Equipment Purchase Financing ("FINAME")
In February 2011, the Company entered into debt financing in the amount of 4
million Brazilian Reais ("BRL") to purchase mining equipment through the FINAME
financing program, which is administered through the Brazilian Development Bank
("BNDES"). Interest is calculated at 5.5% per annum and the FINAME is repayable
in equal monthly instalments beginning September 15, 2011 and ending February
15, 2016.
Derivative Contracts
Subsequent to quarter end, the Company entered into the following derivative
contracts as required under the terms of the WestLB Facility:
BRL / USD Forward Contracts
The Company sells US dollars and buys Brazilian Real as follows:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Expiry Date Notional Amount (USD) BRL / USD Price
---------------------------------------------------------------------------
December 16, 2013 $6,000.0 1.86725
June 16, 2014 $6,000.0 1.92986
December 15, 2014 $6,000.0 1.99265
June 15, 2015 $6,000.0 2.04843
December 15, 2015 $6,000.0 2.11206
June 15, 2016 $6,000.0 2.16633
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Floating to Fixed Interest Rate Swap Contracts
The Company pays a fixed annual interest rate of 1.495% and receives 6 month US
Libor rate as follows:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Start Date End Date Notional Amount (USD)
---------------------------------------------------------------------------
January 25, 2012 July 25, 2012 $20,000.0
July 25, 2012 January 25, 2013 $12,304.0
January 25, 2013 July 25, 2013 $12,304.0
July 25, 2013 January 27, 2014 $ 4,235.7
January 27, 2014 July 25, 2014 $ 4,235.7
---------------------------------------------------------------------------
---------------------------------------------------------------------------
OTHER ITEMS
Strengthening of Management Team
The Company has significantly strengthened its management team in both
operations and exploration during the quarter and will continue to increase the
skills of the workforce and engage high quality and technically capable
management to develop a strong management team to deliver shareholder value.
The following management additions include:
Vice President Operations - Peter Mah
Peter will lead the operational team through re-commissioning and achieving
feasibility level production. Peter is a mining and processing engineer with a
Master's degree in Rock Mechanics from UBC. His experience base is from
progressive management positions with Goldcorp, Newcrest and Newmont throughout
Canada, USA, South East Asia and Africa. Peter will be based in Vancouver BC
Canada. Peter has spent significant time at Aurizona with the Operations team.
General Manager Aurizona Gold Mine - Jim Healy
Jim is a well experienced Mining Engineer (New Mexico Institute of Mining &
Technology). Jim has worked extensively in engineering and project management
with BHP Billiton, INCO, Aura Minerals and JDS Engineering and Mining in the
USA, Canada, Australia, Indonesia, Brazil, South America and New Caledonia. Jim
is fluent in Portuguese and has direct experience in General Management in
Brazil. Jim brings a talent of practical and professional management to our
operations and will be based in Brazil.
Mining Manager Aurizona Gold Mine - Alberto Reyes
Alberto is a mining engineer from Ontario with broad experience in mine
operations and mine planning. He brings to the Company extensive experience
gained with an International Mining Consultancy, Newcrest Mining Ltd and Gold
Fields in Canada, USA, South America, Australia and Africa. Alberto will
implement systems and processes into the operations to deliver discipline in
grade control and mining efficiencies over the life of the mine. Alberto is
fluent in Portuguese, English and Spanish.
Brazil Exploration Director - Carlos Paranaos
Carlos has spent over 15 years working and managing both greenfields and
brownfields gold exploration programs in South America and Africa with AngloGold
Ashanti. During his time in Africa, Mr. Paranhos made significant contributions
to determining structural controls on several major gold deposits resulting in
increased life of mine. Recently Mr. Paranhos acted as Exploration Coordinator
for AngloGold Ashanti Brazil in the prolific Iron Quadrangle Region of Minas
Gerais State where he was responsible for setting-up and running regional
exploration programs targeting an additional 6 million ounces of gold of new
inferred resources to the existing AngloGold Ashanti Brazil mineral statement.
SHAREHOLDERS' EQUITY
Shareholders' equity increased over the prior year due to the Company's equity
financing activities during the period, which was partially offset by an
increase in the deficit.
As at the date of this report the Company had 441,850,328 shares outstanding,
23,950,000 share purchase options and 6,859,221 common share warrants
outstanding.
The following is a summary of stock options outstanding as at the date of this
report:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Price per share
Number of shares ('000s) Vested ('000s) CA$ Expiry Date
---------------------------------------------------------------------------
100 100 0.50 14-Mar-12
340 340 0.85 8-Aug-12
210 210 1.23 16-Jan-13
165 165 1.05 2-May-13
250 250 0.90 20-Jun-13
5,800 5,800 0.42 24-Jul-14
750 750 0.37 29-Jul-14
100 100 0.55 4-Jan-15
1,310 873 0.63 5-Jul-15
5,000 1,000 0.58 24-Sep-15
7,075 25 0.65 12-Apr-16
2,850 - 0.55 18-May-16
---------------------------------------------------------------------------
---------------------------------------------------------------------------
23,950 9,613
---------------------------------------------------------------------------
---------------------------------------------------------------------------
The following is a summary of warrants outstanding as at the date of this report:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Number of warrants ('000s) Price per share CA$ Expiry Date
---------------------------------------------------------------------------
6,859 1.00 20-Jun-12
---------------------------------------------------------------------------
6,859
---------------------------------------------------------------------------
---------------------------------------------------------------------------
OUTLOOK AND STRATEGY
Aurizona Gold Mine
The Company has revised its 2011 production target downward to approximately
40,000 ounces of gold at an estimated cash cost between $900 and $915 per ounce
of production. The downward revision is due to the slower than anticipated ramp
up of production since successfully implementing the planned process plant
upgrades.
The Company plans on spending approximately $5.0 million on further capital
improvements at the Aurizona mine during the remainder of 2011. The Aurizona
brownfield exploration and drill program remains on target to produce an updated
NI 43-101 resource estimate for release in Q4.
Cachoeira Gold Property
The Company has extended its target to complete the Cachoeira scoping study (the
"Scoping Study") to Q2 2012 that will deliver the path forward to developing
Cachoeira into a mining project feasibility study. This has been delayed to
allow management to focus on the Aurizona resource upgrade and production
planning.
Maranhao Greenfields Property
The Company continues to aggressively explore the extensive Maranhao Greenfields
property to discover new gold deposits and will maintain exploration crews
working four targets simultaneously throughout 2011. Regional scale exploration
is underway designed to generate large gold-in-soil anomalies consistent with
the Aurizona mineralization style. Through these programs the Company intends to
define between six and eight new target areas, several of which will be brought
to drill stage in 2012.
Interim Consolidated Statements of Income (Loss) and Comprehensive Income
(Loss)
(expressed in thousands of U.S. dollars, except where indicated)
---------------------------------------------------------------------------
Note Three months ended Six months ended
----------------------------------------------------
June 30, June 30, June 30, June 30,
2011 2010 2011 2010
---------------------------------------------------------------------------
Revenue
Gold Sales 9 $ 9,179.4 $ 829.5 $ 19,536.8 $ 829.5
---------------------------------------------------------------------------
9,179.4 829.5 19,536.8 829.5
---------------------------------------------------------------------------
Operating expenses
Cost of goods
sold (10,990.7) (2,393.4) (19,719.6) (2,393.4)
Depletion and
amortization (1,203.5) (46.9) (2,105.6) (46.9)
---------------------------------------------------------------------------
(3,014.8) (1,610.8) (2,288.4) (1,610.8)
---------------------------------------------------------------------------
Other (expenses)
income, net
Exploration (2,236.4) (725.7) (3,635.1) (788.9)
General and
administrative 10 (1,052.0) (645.3) (1,769.6) (1,055.5)
Gain (loss) on
derivative
liability 11 737.3 (520.9) 2,365.6 (520.9)
Foreign exchange
gain (loss) (351.0) 377.0 268.1 354.1
Stock-based
compensation 7 (1,126.1) (391.7) (1,470.5) (1,000.6)
Finance income 7.1 68.3 124.3 145.0
Finance cost (631.6) (146.9) (1,104.4) (192.8)
Other (expense)
income (24.1) (27.5) 7.2 -
---------------------------------------------------------------------------
Net loss and
comprehensive
loss for the
period $ (7,691.6) $ (3,623.5) $ (7,502.8) $ (4,670.4)
---------------------------------------------------------------------------
Loss per common
share
Basic & Diluted (0.02) (0.01) (0.02) (0.01)
Weighted average
shares
outstanding
(000's)
Basic & Diluted 436,521 359,088 436,082 358,964
---------------------------------------------------------------------------
Total shares
issued and
outstanding
(000's) 436,889 359,312 436,889 359,312
---------------------------------------------------------------------------
Interim Consolidated Statements of Financial Position
(expressed in thousands of U.S. dollars, except where indicated)
---------------------------------------------------------------------------
June 30, December 31, January 1,
Note 2011 2010 2010
---------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 415.5 $ 10,703.6 $ 12,565.5
Accounts receivable and
prepaid expenses 5,715.3 3,647.9 743.7
Inventory 3 7,909.8 6,325.5 393.6
Investments - - 2,942.9
---------------------------------------------------------------------------
14,040.6 20,677.0 16,645.7
Property, plant and
equipment 4 98,886.0 88,166.0 54,867.6
Other assets 1,767.6 1,089.5 408.1
---------------------------------------------------------------------------
Total assets $ 114,694.2 $ 109,932.5 $ 71,921.4
---------------------------------------------------------------------------
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $ 11,076.9 $ 3,524.2 $ 5,364.6
Current portion of
derivative liability 204.9 1,605.8 -
Current portion of debt
instruments 5 8,528.3 8,118.3 301.6
Current portion of
unearned revenue 6 7,132.0 1,748.2 1,787.2
---------------------------------------------------------------------------
26,942.1 14,996.5 7,453.4
Debt instruments 5 8,547.6 9,383.2 4,989.2
Derivative liability - 1,019.2 -
Unearned revenue 19,571.1 19,917.9 20,308.8
Asset retirement
obligation 2,487.9 2,370.9 2,108.5
---------------------------------------------------------------------------
Total liabilities 57,548.7 47,687.7 34,859.9
---------------------------------------------------------------------------
Shareholders' equity
Share capital 109,636.8 107,233.3 65,687.7
Deficit (52,491.3) (44,988.5) (28,626.2)
---------------------------------------------------------------------------
Total shareholders'
equity 57,145.5 62,244.8 37,061.5
---------------------------------------------------------------------------
Total liabilities and
shareholders' equity $ 114,694.2 $ 109,932.5 $ 71,921.4
---------------------------------------------------------------------------
Interim Consolidated Statements of Changes in Shareholders' Equity and
Deficit
(expressed in thousands of U.S. dollars, except where indicated)
---------------------------------------------------------------------------
Attributable to equity holders of the Company
---------------------------------------------------------------------------
Shares Share Contributed
Notes ('000) capital surplus Deficit Total
---------------------------------------------------------------------------
Balance at
January 1,
2010 358,837 $ 60,063.2 $ 5,624.5 $ (28,626.2) $ 37,061.5
Net loss for
the period - - - (4,670.4) (4,670.4)
Special
warrants
issuance - 27,958.5 - - 27,958.5
Stock options
exercised 475 295.6 (112.3) - 183.3
Stock-based
compensation
charges - - 1,140.5 - 1,140.5
---------------------------------------------------------------------------
Balance at
June 30,
2010 359,312 $ 88,317.3 $ 6,652.7 $ (33,296.6) $ 61,673.4
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Balance at
January 1,
2010 358,837 $ 60,063.2 $ 5,624.5 $ (28,626.2) $ 37,061.5
Net loss for
the year - - - (16,362.3) (16,362.3)
Escrow shares
returned to
treasury and
cancelled (214) (35.7) 35.7 - -
Stock options
exercised 3,267 1,183.2 (405.6) - 777.6
Stock-based
compensation
charges - - 1,952.9 - 1,952.9
Issue of
share
capital, net 72,649 38,701.6 113.6 - 38,815.2
---------------------------------------------------------------------------
Balance at
December 31,
2010 434,539 $ 99,912.3 $ 7,321.1 $ (44,988.5) $ 62,244.9
---------------------------------------------------------------------------
Net loss for
the period - - - (7,502.8) (7,502.8)
Stock options
exercised 7 2,350 1,497.7 (564.8) - 932.9
Stock-based
compensation
charges 7 - - 1,470.5 - 1,470.5
---------------------------------------------------------------------------
Balance at
June 30,
2011 436,889 $ 101,410.0 $ 8,226.8 $ (52,491.3) $ 57,145.5
---------------------------------------------------------------------------
Interim Consolidated Statements of Changes in Shareholders' Equity and
Deficit
(expressed in thousands of U.S. dollars, except where indicated)
---------------------------------------------------------------------------
Note Three months ended Six months ended
------------------------------------------------
June 30, June 30, June 30, June 30,
2011 2010 2011 2010
---------------------------------------------------------------------------
Cash flows from
operating activities
Net loss for the
period (7,691.6) (3,623.5) (7,502.8) (4,670.4)
Items not affecting
cash
Depletion and
amortization 1,215.0 46.9 2,134.3 55.4
Recognition of
unearned revenue (209.8) (36.1) (463.0) (36.1)
Unrealized foreign
exchange (gains)
losses 396.5 (348.3) (188.4) (331.6)
Unrealized gains from
warrant liability (737.3) 520.9 (2,365.6) 520.9
Stock-based
compensation charges 1,126.1 391.7 1,470.5 1,000.6
Accretion of asset
retirement
obligation 69.2 46.0 135.0 91.9
Accretion of interest 335.0 - 481.4 -
Other - 2.6 - (15.9)
---------------------------------------------------------------------------
(5,496.9) (2,999.8) (6,298.6) (3,385.2)
Change in non-cash
operating working
capital
Increase in accounts
receivable and
prepaid expense (2,999.6) (139.4) (2,067.4) (68.3)
Increase in inventory 678.5 (2,314.1) (1,216.5) (3,573.8)
Increase in accounts
payable and accruals 3,983.5 758.4 6,271.3 758.4
Payments to the
Departamento Nacional
de Producao Mineral
("DNPM") (31.1) (12.2) (128.7) (88.2)
---------------------------------------------------------------------------
(3,865.6) (4,707.1) (3,439.9) (6,357.1)
---------------------------------------------------------------------------
Cash flows from
financing activities
Proceeds from prepaid
gold agreement 6(a) 5,500.0 - 5,500.0 13,868.8
Payment of debt
financing fees (528.1) - (678.1) -
Repayment to principal
of debt financing (1,666.6) - (3,333.3) -
Proceeds from issuance
of special warrants, net - 30,055.2 - 30,055.2
Proceeds on issuance
of common shares 259.4 142.2 932.9 183.5
---------------------------------------------------------------------------
3,564.7 30,197.4 2,421.5 44,107.5
---------------------------------------------------------------------------
Cash flows from
investing activities
Proceeds from disposal
of investments - - - 2,964.2
Payments for property,
plant and equipment (3,587.6) (8,335.1) (9,543.2) (27,158.0)
---------------------------------------------------------------------------
(3,587.6) (8,335.1) (9,543.2) (24,193.8)
---------------------------------------------------------------------------
Effect of exchange
rate changes on cash 215.3 343.6 273.5 301.7
Increase (decrease) in
cash and cash equivalents (3,888.5) 17,155.2 (10,561.6) 13,556.6
Cash and cash equivalents -
beginning of period 4,088.7 8,925.0 10,703.6 12,565.5
---------------------------------------------------------------------------
Cash and cash equivalents -
end of period 415.5 26,423.8 415.5 26,423.8
---------------------------------------------------------------------------
On behalf of the Board of Directors
LUNA GOLD CORP.
John Blake - President and CEO
Forward Looking Statements
This MD&A includes certain statements that constitute "forward-looking
statements", and "forward-looking information" within the meaning of applicable
securities laws ("forward-looking statements" and "forward-looking information"
are collectively referred to as "forward-looking statements", unless otherwise
stated). These statements appear in a number of places in this MD&A and include
statements regarding our intent, or the beliefs or current expectations of our
officers and directors. Such forward-looking statements involve known and
unknown risks and uncertainties that may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. When
used in this MD&A, words such as "believe", "anticipate", "estimate", "project",
"intend", "expect", "may", "will", "plan", "should", "would", "contemplate",
"possible", "attempts", "seeks" and similar expressions are intended to identify
these forward-looking statements. Forward-looking statements may relate to the
Company's future outlook and anticipated events or results and may include
statements regarding the Aurizona property and other development projects of the
Company's future financial position, business strategy, budgets, litigation,
projected costs, financial results, taxes, plans and objectives. We have based
these forward-looking statements largely on our current expectations and
projections about future events and financial trends affecting the financial
condition of our business. These forward-looking statements were derived
utilizing numerous assumptions regarding expected growth, results of operations,
performance and business prospects and opportunities that could cause our actual
results to differ materially from those in the forward-looking statements. While
the Company considers these assumptions to be reasonable, based on information
currently available, they may prove to be incorrect. Accordingly, you are
cautioned not to put undue reliance on these forward-looking statements.
Forward-looking statements should not be read as a guarantee of future
performance or results. To the extent any forward-looking statements constitute
future-oriented financial information or financial outlooks, as those terms are
defined under applicable Canadian securities laws, such statements are being
provided to describe the current anticipated potential of the Company and
readers are cautioned that these statements may not be appropriate for any other
purpose, including investment decisions.
Forward-looking statements are based on information available at the time those
statements are made and/or management's good faith belief as of that time with
respect to future events, and are subject to risks and uncertainties that could
cause actual performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. These statements are based on a
number of assumptions, including, but not limited to, assumptions regarding
general business and economic conditions, interest rates, the supply and demand
for, deliveries of, and the level and volatility of prices of gold and other
primary metals and minerals as well as oil, and related products, the timing of
the receipt of regulatory and governmental approvals of our producing and
development projects and other operations, our costs of production and
production and productivity levels, as well as those of our competitors, power
prices, continuing availability of water and power resources for our operations,
market competition, the accuracy of our reserve estimates (including with
respect to size, grade and recoverability) and the geological, operational and
price assumptions on which these are based, conditions in financial markets, the
future financial performance of the company, our ability to attract and retain
skilled staff, our ability to procure equipment and operating supplies, positive
results from the studies on our producing and development projects, our gold and
other product inventories, our ability to secure adequate transportation for our
products, our ability to obtain permits for our operations and expansions, and
our ongoing relations with our employees and business partners. The foregoing
list of assumptions is not exhaustive. Events or circumstances could cause
actual results to vary materially.
Factors that may cause actual results to vary materially include, but are not
limited to, changes in commodity and power prices, changes in interest and
currency exchange rates, acts of foreign governments, inaccurate geological and
metallurgical assumptions (including with respect to the size, grade and
recoverability of mineral reserves and resources), unanticipated operational
difficulties (including failure of plant, equipment or processes to operate in
accordance with specifications or expectations, cost escalation, unavailability
of materials and equipment, government action or delays in the receipt of
government approvals, industrial disturbances or other job action, adverse
weather conditions and unanticipated events related to health, safety and
environmental matters), union labour disputes, political risk, social unrest,
failure of customers or counterparties to perform their contractual obligations,
changes in our credit ratings and changes or further deterioration in general
economic conditions.
Forward-looking statements speak only as of the date those statements are made.
Except as required by applicable law, we assume no obligation to update or to
publicly announce the results of any change to any forward-looking statement
contained or incorporated by reference herein to reflect actual results, future
events or developments, changes in assumptions or changes in other factors
affecting the forward-looking statements. If we update any one or more
forward-looking statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking statements.
You should not place undue importance on forward-looking statements and should
not rely upon these statements as of any other date. All forward-looking
statements contained in this MD&A are expressly qualified in their entirety by
this cautionary statement.
Other Technical Information
Titus Haggan Ph.D., EurGeol Certified Professional Geologist #746, Luna's VP of
Exploration, is the Qualified Person as defined under National Instrument 43-101
responsible for the scientific and technical work on the exploration programs
and has reviewed and approved the corresponding technical disclosure throughout
this MD&A. John Blake Ph.D., Certified Mining Engineer, Luna's President and CEO
is the Qualified Person as defined under National Instrument 43-101 responsible
for the scientific and technical work on the development programs and has
reviewed and approved the corresponding technical disclosure throughout this
MD&A.
For further information on the Company, reference should be made to its public
filings (including its most recently filed annual information form ("AIF"))
which are available on SEDAR at www.sedar.com. Information is also available on
the Company's website at www.lunagold.com. Information on risks associated with
investing in the Company's securities and technical and scientific information
under National Instrument 43-101 concerning the Company's material property,
including information about mineral resources and reserves, are contained in the
Company's most recently filed AIF. This Management's Discussion and Analysis
("MD&A") should be read in conjunction with the unaudited interim consolidated
financial statements for the three months ended March 31, 2011 and six months
ended June 30, 2011 and related notes thereto which have been prepared in
accordance with International Financial Reporting Standards.
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