LUNA GOLD REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010
(All figures expressed in US dollars, unless otherwise noted)
VANCOUVER, Nov. 9 /PRNewswire-FirstCall/ – Luna Gold Corp. (TSXV-LGC) (“Luna” or the “Company”) today announces its results for the three and nine months ended
September 30, 2010.Â 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.
Luna Gold Corp. (the “Company”) is a publicly listed company on the TSX
Venture Exchange trading under the symbol LGC.Â Â The Company is
actively engaged in the operation, exploration, acquisition and
development of gold properties in Brazil. The Company currently has two
gold properties located in northeast Brazil.Â
The Company’s material gold property, Aurizona, is located in the state
of Maranhao and totals approximately 80,000 hectares of land divided
into two main areas, Aurizona Main and Aurizona Regional.
Aurizona Main (“Aurizona Main”) contains the Piaba and Tatajuba deposits
and over 10 other near mine exploration targets, which collectively
form a gold camp.Â It covers approximately 20,000 hectares of land and
includes a mining license and exploration permit.Â The Aurizona
Operation consists of an open pit mine operation (Piaba deposit) and
gold process plant, which is currently being commissioned.
Aurizona Regional (“Aurizona Regional”) represents the Company’s
extensive regional landholdings, which consists of over 60,000 hectares
of exploration licenses surrounding the Aurizona Main area.Â There are
over 50 hard rock (primary) gold garimpos located within the Aurizona
Regional permits.Â Â
The Company’s other gold property, Cachoeira (“Cachoeira”), is located
in the state of Para and is an advanced gold exploration project.Â
Cachoeira consists of a multiple of mineralized zones, which include
isolated quartz vein systems, hydrothermally altered host rocks and
stockworks within a north-south trending shear zone.
The Company’s near term focus is to:
Complete commissioning of the Aurizona Operation and ramp up gold
production to feasibility study levels;
Invest into Aurizona exploration programs with the goal of delivering a
significant increase in the Company’s resource base at the Piaba and
Tatajuba gold deposits and test the near mine exploration targets with
the objective of defining resources close to the Aurizona gold process
Finalize a maiden NI 43-101 resource and technical report on the
Cachoeira gold property.
The Company’s longer term focus is to:
Increase the Aurizona gold production output at the Piaba plant above
feasibility study levels through plant expansion, identification of
additional or new mineable ore reserves near the plant to replace
production and sustain a long term mine life at higher production
Identify new gold resources through the exploration of the Aurizona
Regional project and through business development programs;
- Develop Cachoeira as an organic growth pipeline project in Luna Gold.
2010 YEAR TO DATE HIGHLIGHTS
The Company raised net proceeds of $30.1 million through a non-brokered
private placement financing in Q2.
Gravity gold circuit commissioning completed and gold production
commenced in Q2.
Carbon-in-leach (“CIL”) plant transitioned from construction to wet
commissioning with limited gold production from the CIL circuit in July
- Aurizona gold production for Q3 was approximately 4,800 ounces.
The Company entered an agreement with JDS Mining and Energy in August to
identify and improve processing and mechanical component issues at the
Aurizona Gold mine to achieve feasibility production levels.
The Board of Directors approved a large exploration program and budget
for the Aurizona Main and Regional projects and commenced a 20,000
metre drill program at Aurizona Main.
On September 2(nd), the Company defined 10 exploration targets at Aurizona Main. All
targets defined to date are located within 5 kilometers radius of the
Aurizona gold process plant. They will all be advanced to drill stage
with the objective of delineating additional gold resources within
trucking distance of the plant.
On October 27(th), the Company reported high-grade gold intersections from auger drilling
and channel sampling at Cachoeira.
On October 30(th), the LT 69kV power line was completed when Cemar, the State power
utility, energized the line to operational status. The commissioning of
this power line will allow the Company to significantly reduce its
current power costs.
Appointment of an experienced operational President and Chief Executive
Officer on September 24, 2010.Â The new CEO, John Blake brings
significant Gold Mining operational experience to Luna Gold in the
transition from a developing company to an operational gold producing
company. On November 24(th), Jim Bahan will resign from the Company’s Board of Directors.
Cachoeira NI 43-101 technical report and resource estimate is targeted
for release in December 2010.
Drilling results from exploration program are expected in Q4 relating to
both Cachoeira and Aurizona Main.
Aurizona gold production targeted to declare commercial production at
feasibility production levels in Q1 2011.
AURIZONA GOLD MINE – MARANHAO STATE, BRAZIL
The Aurizona gold mine (“Aurizona”) 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.Â Â The Aurizona Main
Operation (the “Operation”) area contains the Piaba and Tatajuba
deposits and over 10 other targets, which collectively form a gold
camp. The area is covered by a mining licence and one exploration
permit on the Tatajuba deposit.Â A positive exploration report has been
submitted to the mines department for the exploration permit as part of
the process to obtain a mining licence for that area.Â
Development of the Aurizona gold mine
The commissioning phase of the Aurizona gold mine continued in the
quarter with typical start productivity issues compounded by mechanical
challenges. As previously advised in the Q2 results the Company engaged
a consulting engineering company to complete a review of the mine and
processing plant. This is complete and the engineering company has
identified all impediments to delivering feasibility production and
delivered a work plan schedule to address the mining, processing and
mechanical start-up impediments to deliver feasibility level production
in Q1 2011.
Company focus for Q4 2010 are SAG and Ball rotation speed changes that
currently reduce capacity to achieve optimum grind size and solution
densities, with resulting low Gold recoveries. In addition installation
of a carbon column and carbon reactivation kiln and other minor process
changes that will add significant processing improvements. Deliveries
of mechanical parts for the plant have been delayed by competition with
other mining projects in Brazil for mechanical services and equipment
extending delivery times.Â Â Â
Our operational team assisted by JDS Mining and Energy has made
significant progress during the quarter to address these issues and
position the company to declare commercial production in Q1 2011
providing future growth potential to the Company.
The total expected cash cost of the Aurizona project is now forecasted
at approximately $67 million.Â
Table of production
|Mined Waste – tonnes||Â||Â||Â||135,834||Â||Â||Â||109,017||Â||Â||Â||54,544||Â||Â||Â||299,395|
|Mined Ore – tonnes||Â||Â||Â||113,423||Â||Â||Â||100,463||Â||Â||Â||129,437||Â||Â||Â||363,323|
|Grade – g/t||Â||Â||Â||1.19||Â||Â||Â||1.21||Â||Â||Â||1.01||Â||Â||Â||1.07|
|Mill Head Grade – g/t||Â||Â||Â||0.93||Â||Â||Â||0.87||Â||Â||Â||0.90||Â||Â||Â||0.90|
|Gold Production (oz)||Â||Â||Â||597||Â||Â||Â||1,962||Â||Â||Â||2,215||Â||Â||Â||4,774|
Ore mined for the quarter was 363,323 tonnes at an average head grade of
1.07 g/t and a waste strip ratio of 0.8.Â Gold grade and waste
production are lower than the targeted feasibility levels.Â With the
lack of rain during the wet season, mining operations concentrated on
increasing the ore inventory stockpile in anticipation of the upcoming
rain season that begins at the end of the year.Â Â Â
Since the end of the quarter, the Company has revised the ore mining
process and has increased the focus on grade control with the
introduction of surface trench sampling in addition to the Reverse
Circulation (RC) drilling to improve grade estimation, identification
and dilution control.Â Run of mine (ROM) stockpiles will be
progressively sampled and recalculated to complete a grade
reconciliation of mined and stockpiles ore.
The mill processed 279,654 tonnes of ore during the quarter at an
average head grade of 0.90 g/t producing 4,774 ounces of gold realizing
an average recovery rate of 60%. The mill has demonstrated feasibility
levels of production exceeding tonnages in mill throughput, however
grade and recoveries are below the plant design and feasibility levels.
The SAG and Ball mill and other processing issues discussed above
contributed to the lower than anticipated recoveries.
The variance in recoveries against the feasibility study rate would
contribute approximately 2,400 ounces of production and the variance in
mill head grade against the feasibility study rate would contribute
approximately 3,400 ounces.Â The Company’s management team are focused
on these issues in Q4 with the target to deliver feasibility production
levels in Q1 2011.Â Â
Aurizona Main Exploration
The Company’s exploration teams significantly advanced exploration in
the Aurizona Main area in the quarter as summarized below.
Completion of the Pirocaua-Micote soil grid and field mapping programs
resulting in the definition of several new contiguous gold-in-soil
anomalies located to the east of the Piaba deposit along the Aurizona
Completion of the Mucuna soil grid and field mapping programs located to
the north of the Tatajuba deposit. This program did not identify
significant gold mineralization in this area.
Significant progress was made at the South Grid which is designed to
identify sub-parallel gold mineralized trends to the south of the main
area of gold mineralization at Aurizona Main. This grid will be
completed in the third week of November.
Line cutting commenced at the LDW target located in the extreme western
portion of the Aurizona Main area. Soil sampling will commence in this
area in November.Â Program objectives are to identify new zones of
mineralization within the far western extension of the Aurizona Shear
Zone which hosts the Piaba and Tatajuba deposits.
Assay data were received for the auger drill program at the Boa
Esperanca target. This program defined a continuous zone of gold
mineralization exceeding 500 metres in strike and 100 metres in width.
Significant results are shown in Table 1.
|HOLE ID||DEPTH (m)||FROM (m)||TO (m)||INT (m)||AU (G/T)|
Table 1. Top 10 mineralized intervals, Boa Esperanca target. All holes
are vertical. True widths to be established.
Assay data were also received for the area between the Piaba and
Tatajuba deposits. Weak zones of mineralization were intersected and
these data are being evaluated.
Auger drill programs were completed at the Ferradura and Conceicao
exploration targets and samples are currently at the assay lab. Auger
drill teams are currently drilling gold-in-soil anomalies located to
the west of the Tatajuba deposit (Tatajuba West) along the Aurizona
Mechanized trenching commenced at the Boa Esperanca target. A total of
eight trenches have been sited orthogonal to the Boa Esperanca
mineralized trend. Five trenches have been opened and sampling and
mapping has commenced. This is the final exploration program at Boa
Esperanca prior to diamond drilling.
The Company purchased three ground magnetometer units and set-up an in
house geophysical team in the quarter. Geophysical surveys have been
completed at the Boa Esperanca target and teams are currently
collecting data from the Conceicao and Ferradura targets. These
programs are providing excellent quality geophysical data at low cost
which is being used in drill planning.
Diamond drilling commenced at the end of August and the Company
currently has four diamond drills operating at the Piaba deposit. Seven
drill holes have been completed and samples are currently en route to
the assay lab. A fifth rig is scheduled to arrive in the third week of
November to accelerate the program. Drilling is presently focused on
infilling over a 3 kilometre length at the Piaba deposit to further
define measured and indicated resources.
The process of converting the Tatajuba exploration licence, which hosts
the Tatajuba deposit, is ongoing.
Soil sampling and field mapping continued at the Areal target, which is
70% complete, will be finalized by the end November.Â Soil sampling
commenced at the JST and PC grids, both designed to identify new zones
of gold mineralization associated with favourable magnetic lineaments
and historic gold workings. The Company is aggressively exploring in
the Aurizona Regional project areas to collect as much field data prior
to the onset of the wet season.
CACHOEIRA GOLD PROPERTY – PARA STATE, BRAZIL
The Cachoeira property is located in Para State in north eastern Brazil.
The project is located approximately 80 kilometres from the Atlantic
coast and 100 kilometres southwest of the Aurizona gold project.
The property is made up of three mining permits and two exploration
permits.Â Cachoeira consists of tens of mineralized zones, which
include isolated quartz vein systems, hydrothermally altered host
rocks, and stockworks distributed along an area of approximately 3.5
kilometres by 1.5 kilometres.Â Drilling to date has intersected
high-grade, mineralized structures and wider zones of lower-grade gold
The Company has made solid progress at Cachoeira during the quarter and
all field programs required for the NI 43-101 resource estimate and
technical report were finalized. Work completed in the quarter
Assay data received for a 2,241 meter auger drill program which defined
significant surface oxide mineralization including the following drill
- 15.00 meters @ 5.91 g/t Au in auger hole TX0094
- 15.00 meters @ 3.37 g/t Au in auger hole TX0154
- 15.00 meters @ 2.53 g/t Au in auger hole TX0134
Assay data received for a 1,077 meter outcrop channel sampling program
which defined wide zones of gold mineralization including:
15.03 meters @ 3.53 g/t Au including 4.01 meters @ 6.40 g/t Au in
- 10.98 meters @ 3.11 g/t Au in channel OC-29A
18.02 meters @ 2.80 g/t Au including 9.00 meters @ 4.98 g/t Au in
Assay data received for a 360 meter underground channel sampling program
which defined high-grade quartz vein sets including:
- 6.85 meters @ 63.62 g/t Au in channel B L-50_4
- 16.59 meters @ 31.06 g/t Au in channel B L-60_2
- 15.70 meters @ 31.44 g/t Au in channel B L-69_2
Partial assay data were received for a 1,293 meter auger drill program
and partial assay data received for an outcrop channel sampling
program. Data is under interpretation.
An extensive outcrop channel sampling program exceeding 800 meters was
completed on all available outcrops and partial assay data were
received. An extensive auger drill program was completed and partial
assay data received.
An auger drill grid commenced in September to test a new regional target
called Sovi. Sovi is a gold-in-soil anomaly measuring 700X200 meters
and averaging 0.182 g/t Au. The auger drill program will determine the
existence of near surface gold mineralization at this target.
The NI 43-101 compliant resource estimate report is expected to be
completed in December, 2010.
At September 30, 2010, the Company had incurred accumulated exploration
expenditures of BRL 6.24 million (September, 2009 – BRL 4.07 million)
as part of the Company’s agreement with the vendors to incur
exploration expenditures of BRL 9.5 million.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2010, the Company had cash and cash equivalents of $7.6
million and finished gold bullion inventory of approximately 3,800
ounces.Â The Company’s cash balance was denominated in various
currencies (CA$4.5 million, US$1.0 million and BRL 3.4 million).Â Â Â Â Â
During the quarter, the Company spent approximately $15.1 million on
operating activities, including approximately $2.0 million on
exploration activities.Â This was the first quarter of production since
achieving the commissioning phase of the Aurizona gold mine resulting
in a significant increase in operating cash expenditure compared to
previous quarters. The Company also spent approximately $3.7 million on
capital costs related to the Aurizona processing facility.
For the nine month period, the Company spent approximately $22.0 million
on operating activities including $3.2 million on exploration
activities.Â Total capital costs spent for this period was
approximately $30.4 million all related to the Aurizona mine and
process facility.Â These expenditures were funded by the drawdown of
the $15 million Aurizona Project Debt Facility, cash balances carried
over from the prior year and partially from the special warrant
financing of $29.8 million, net received during the period.
The Company expects to generate adequate cash inflow from the production
and sale of gold bullion to cover its near term operational
commitments.Â In addition, the Company is currently assessing an offer
of a short term prepaid gold facility from RMB Resources Inc. if the
Company shall choose to accept it.
For the remainder of the year, the Company plans on spending
approximately $5.0 million on further capital improvements to the
Aurizona mine and $3.0 million on exploration.Â The Company’s first
debt repayment on the Aurizona Project Debt Facility is due on December
31, 2010 in the amount of $1.9 million.
As at September 30, 2010, the Company had the following contractual
|(tabled amounts are expressed in thousands of US dollars)||Â||Â||Total||Â||Â||Less than 1 year||Â||Â||1 – 2 years||Â||Â||2 – 3 years||Â||Â||3 - 4 years||Â||Â||4 – 5 years||Â||Â||Thereafter|
|Long term debt||Â||Â||21,214.5||Â||Â||6,881.1||Â||Â||8,666.7||Â||Â||3,666.7||Â||Â||2,000.0||Â||Â||-||Â||Â||-|
|Asset retirement obligation||Â||Â||5,092.5||Â||Â||-||Â||Â||-||Â||Â||-||Â||Â||-||Â||Â||-||Â||Â||5,092.5|
At September 30, 2010, the Company had committed to purchase equipment
in the amount of $0.4 million for the Aurizona gold mine.
These interim consolidated financial statements have been prepared on
the basis of accounting principles applicable to a going concern which
assumes that the Company will be able to continue in operation for the
foreseeable future and will be able to realize its assets and discharge
its liabilities in the normal course of business.
Several adverse conditions cast significant doubt on the validity of
this assumption.Â The Company has incurred significant operating losses
over the past several fiscal years, is currently unable to self-finance
operations and has a deficit of $45.5 million at September 30, 2010.Â
The Company’s ability to continue as a going concern may be dependent
upon raising additional capital or evaluating strategic alternatives.
The Company has no assurance that such actions will be successful or
that financing will be available or be available on favourable terms.
Actions taken by the Company during the nine month period ended
September 30, 2010 were to initiate plant improvements to increase gold
production, apply cost-cutting measures and obtain additional
financing. During the period ended September 30, 2010, the Company
raised $15 million through a project debt facility and $29.8 million,
net through a non-brokered equity financing.Â These interim financial
statements do not reflect adjustments that would be necessary if the
going concern assumption were not appropriate.Â If the going concern
assumption were not appropriate for these financial statements,
adjustments would be necessary in the carrying value of assets and
liabilities, the reported expenses and the balance sheet
classifications used. Such adjustments could be material.
Aurizona Project Debt Facility
In December 2009, the Company entered into a two-tranche, senior
secured, project debt facility (the “Facility”) in the amount of up to
$15.0 million with RMB Resources Inc. to assist in the completion of
the development of the Aurizona Project.Â Both tranches are in the
amount of $7.5 million, bear interest at LIBOR plus 7.5% and are to be
fully repaid by December 31, 2012.Â Both tranches were fully drawn down
during the quarter.
The facility is secured by a first fixed floating charge over the
Aurizona Project, a first mortgage over the shares of Mineracao
Aurizona S.A. (“MASA”) and of the right’s, titles and licenses
associated with the project and a general security agreement by Luna
Gold Corp. in favour of RMB Resources Inc.Â
As at September 30, 2010, the $15.0 million was fully drawn. Accumulated
financing fee paid was $1.5 million.
The Company shall maintain a Loan Life Net Present Value Cover Ratio
(“LLNPVCR”) which is greater than 1.5. The LLNPVCR is defined as the
net present value of the project cash flow from the calculation date to
the final repayment date, as determined from the cash flow model that
is agreed upon by the Company and RMB.
The ratio will be calculated for each quarterly period beginning with
the quarter ending on the date of the first scheduled principal payment
(December 31, 2010) under the facility.Â
Commitment from Acquisition of Aurizona Goldfields Corporation
In January 2007, the Company acquired the Aurizona Main property from
Brascan Brasil (“Brascan”) and Eldorado Gold Corporation (“Eldorado”)
in exchange for a series of staged payments, some of which are
conditional upon the project reaching commercial production.Â The
Company has repaid all outstanding amounts in relation to this
agreement but remained liable for contingent payments of $1.0 million
payable to each party on the first, second and third anniversary of the
commencement of commercial production of Aurizona. The Company believes
it is more likely than not that commercial production will be achieved;
therefore, it has recorded these payments as outstanding debt as at
September 30, 2010.
Commitment with the Departamento Nacional de Producao (“DNPM”)
In August 2006 an agreement was reached with the DNPM to pay
approximately BRL 2.6 million (approximately US$1.3 million) in mineral
fees owing on exploration licences, which have since expired.Â Under
the terms of the agreement the fees are to be paid in 59 monthly
instalments and will be adjusted monthly for inflation.Â The monthly
payments include the principal payment plus simple interest of 1% per
month.Â As at September 30, the Company’s outstanding balance to the
DNMP was BRL 0.3 million (approximately US$0.2 million).Â The Company
expects to have this balance fully repaid within the next 12 months.
Sandstorm Resources Gold Purchase Agreement
In May 2009, the Company entered into a definitive agreement with
Sandstorm Resources Ltd. (“Sandstorm”) under which the Company agreed
to sell 17% of future gold production from the Aurizona Project to
Sandstorm in exchange for an upfront cash payment of $17.8 million.Â
Additionally, Sandstorm will make ongoing per-ounce payments equal to
the lesser of $400 and the prevailing spot gold market price.Â The per
ounce price of $400 is subject to an increase of 1% per annum beginning
on the third anniversary of the date that the Aurizona Project begins
SUMMARY OF QUARTERLY RESULTS
|(tabled amounts are expressed in thousands of US dollars)||Â||Â||Q310||Â||Â||Q210||Â||Â||Q110||Â||Â||Q409|
|Net interest (expense) income||Â||Â||(279.8)||Â||Â||(32.6)||Â||Â||76.7||Â||Â||977.4|
|General & administration (1)||Â||Â||(1,563.1)||Â||Â||(1,076.5)||Â||Â||(999.6)||Â||Â||(813.4)|
|Foreign exchange gains (losses)||Â||Â||4.0||Â||Â||324.4||Â||Â||(22.9)||Â||Â||(1,316.1)|
|Other income (expense)||Â||Â||(13.0)||Â||Â||(27.5)||Â||Â||27.5||Â||Â||424.9|
|Basic loss income per share||Â||Â||(0.02)||Â||Â||(0.01)||Â||Â||(0.00)||Â||Â||(0.00)|
|Diluted loss income per share||Â||Â||(0.02)||Â||Â||(0.01)||Â||Â||(0.00)||Â||Â||(0.00)|
|(tabled amounts are expressed in thousands of US dollars)||Â||Â||Q309||Â||Â||Q209||Â||Â||Q109||Â||Â||Q408|
|Net interest income (expense)||Â||Â||277.6||Â||Â||201.7||Â||Â||33.2||Â||Â||(112.6)|
|General & administration (1)||Â||Â||(704.1)||Â||Â||(722.8)||Â||Â||(391.1)||Â||Â||(556.2)|
|Foreign exchange gains (losses)||Â||Â||1,591.0||Â||Â||1,306.3||Â||Â||(64.4)||Â||Â||(503.2)|
|Other income (expense)||Â||Â||2.0||Â||Â||328.5||Â||Â||(12.8)||Â||Â||80.3|
|Basic loss per share||Â||Â||(0.00)||Â||Â||0.00||Â||Â||(0.01)||Â||Â||(0.03)|
|Diluted loss per share||Â||Â||(0.00)||Â||Â||0.00||Â||Â||(0.01)||Â||Â||(0.03)|
General and administration consists of general and administrative
expenses, professional fees and stock based compensation expense.
The Company sold 1,462 ounces of gold bullion during the quarter
compared to 739 ounces in the prior quarter.Â Of the 1,462 ounces of
gold bullion sold, 1,205 ounces was sold at an average realized gold
price of $1,228 per ounce and 257 ounces were delivered to Sandstorm
Resources at $400 per ounce as per the Sandstorm Gold Purchase
Operating costs represent the production costs associated with the gold
ounces sold during the quarter.Â Â Â Overall, production costs remained
higher than the target per the updated NI 43-101 Compliant Technical
Report, which was released on September 3, 2010, as the Company
remained in the commissioning phase and was still completing the 69kV
power line.Â This resulted in higher power costs associated with the
reliance on diesel generators and higher payroll and camp costs due to
the transition from construction to operations.Â In addition, the low
gold production rate related to the operational ramp up resulted in a
much higher cost per ounce produced.Â Included in operating expense was
a re-evaluation of finished gold inventory of $1.9 million to value
this inventory at the lower of cost or market price.Â
Interest income decreased from the comparative and previous quarter as
the Company due to a lower average cash balance in the quarter as funds
were used to develop the Aurizona mine and processing facilities.
General and administrative expense increased from the comparative
quarter in 2009 due to a significant increase in non-cash stock based
compensation expense and costs associated executive management changes,
which was also a contributing factor in the increase over the prior
Exploration expense increased in the current quarter as the Company
began a new exploration program on the Aurizona Main, Aurizona Regional
and Cachoeira Project’s resulting in the increased expenditure.
Foreign exchange gain was insignificant in the current quarter as the
Brazilian, Canadian and United States currency remained consistent
between the current and previous quarter.
Shareholders’ equity decreased from the previous quarter due to the
Company’s comprehensive loss for the year.Â
As at the date of this report the Company had 418,504,314 shares
outstanding, 20,601,669 share purchase options and 29,465,450 share
purchase warrants outstanding. The following is a summary of stock
options outstanding as at the date of this report:
|Number of shares (’000s)||Â||Â||Vested (’000s)||Â||Â||Price per share CA$||Â||Â||Expiry Date|
On June 14, 2010, the Company completed a non-brokered private placement
of 58,930,915 special warrants of the Company (the “Special Warrants”)
for gross proceeds of $31.3 million.Â Each Special Warrant was sold at
a price of CA$0.56 per Special Warrant and entitled the holder thereof
to receive one common share of the Company and one-half of one common
share purchase warrant.Â Each common share purchase warrant entitled
the holder thereof to purchase one common share of the Company at a
price of CA$0.80 until June 14, 2011, subject to adjustment in certain
During the quarter, the Company obtained the receipt of the final
prospectus and the Special Warrants were converted resulting in an
increase of 58,930,915 common shares of the Company and 29,465,458
common share warrants of the Company.
Luna Gold Corp.
Interim Consolidated Statements of Loss and Comprehensive Loss
(expressed in thousands of U.S. dollars, except where indicated)
|Â||Note||Three months ended September 30,||Nine months ended September 30,|
|Â||Gold Sales||Â||$ 1,620.3||Â $ -||$ 2,449.8||$ -|
|Â||Cost of goods sold||Â||(5,576.2)||-||(7,969.6)||-|
|Â||Depletion and amortization||Â||(303.8)||-||(359.2)||-|
|Â||Accretion of asset retirement obligation||Â||(47.6)||-||(139.5)||-|
|Other (expenses) income, net||Â||Â||Â||Â||Â|
|Â||General and administrative||13||(863.6)||(235.7)||(1,827.4)||(920.1)|
|Â||Foreign exchange gain||Â||4.0||1,591.0||305.5||2,833.0|
|Other (expense) income||14||(13.0)||2.0||(13.0)||317.7|
|Net loss for the period||Â||(8,102.1)||(83.0)||(12,801.4)||(813.5)|
|Other comprehensive income||Â||Â||Â||Â||Â|
|Â||Unrealized income on translation from measurement to reporting currency||Â||-||2,689.0||-||4,691.4|
|Net (loss) income and comprehensive incomeÂ for the period||Â||$ (8,102.1)||$ 2,606.0||$ (12,801.4)||$ 3,877.9|
|Loss per common share||Â||Â||Â||Â||Â|
|Â||Basic and diluted||Â||(0.02)||(0.00)||(0.03)||(0.00)|
|Weighted average shares outstanding (000′s)||Â||Â||Â||Â||Â|
|Â Total shares issued and outstanding (000′s)||Â||418,506||346,832||418,506||346,832|
Luna Gold Corp.
Interim Consolidated Balance Sheets
(expressed in thousands of U.S. dollars, except where indicated)
|September 30, 2010||December 31, 2009|
|Cash and cash equivalents||Â||$ 7,567.2||$ 12,565.5|
|Accounts receivable and prepaid expensesÂ||Â||1,308.6||743.7|
|Held for trading investments||6||-||2,942.9|
|Property, plant and equipment||8||85,564.4||54,867.6|
|Total assets||Â||$103,568.3||$ 71,921.4|
|Accounts payable and accrued liabilities||Â||$Â 3,766.2||$Â 5,364.6|
|Current portion of debt instruments||9||6,358.0||301.6|
|Current portion of deferred liabilities||Â||1,717.6||1,787.2|
|Asset retirement obligation||Â||2,316.3||2,108.5|
|Accumulated other comprehensive income||Â||4,432.4||4,432.4|
|Total shareholders’ equity||Â||56,210.3||37,061.5|
|Total shareholders’ equity and liabilities||Â||$103,568.3||$ 71,921.4|
Luna Gold Corp.
Interim Consolidated Statements of Changes in Shareholders’ Equity and
(expressed in thousands of U.S. dollars, except where indicated)
|Â||Â||Attributable to equity holders of the Company|
|Â||Notes||Shares||Share capital||Contributed surplus||Other reserves||Retained earnings||Total|
|TotalÂ equity at January 1, 2009||Â||86,924||$ 31,802.3||$Â Â 4,633.8||$(1,056.2)||Â Â Â Â (30,552.4)||$Â 4,827.5|
|Net loss for the year||Â||Â||Â||Â||Â||(2,116.9)||(2,116.9)|
|Other comprehensive gain||Â||Â||Â||Â||5,488.6||Â||5,488.6|
|Stock options exercised||Â||775||371.1||(159.2)||Â||Â||211.9|
|Stock based compensation||Â||Â||Â||980.5||Â||Â||980.5|
|Issue of share capital, net||10(a)||258,404||24,745.8||Â||Â||Â||24,745.8|
|Balance at December 31, 2009||Â||358,837||60,063.2||5,235.2||4,432.4||(32,669.3)||37,061.5|
|Net loss for the 9 months ended Sept 30, 2010||Â||Â||Â||Â||Â||(12,801.4)||(12,801.4)|
|Escrow shares returned to treasury||10(d)||(214)||(35.7)||35.7||Â||Â||-|
|Stock options exercised||Â||951||608.8||(231.9)||Â||Â||376.9|
|Stock based compensation||Â||Â||Â||1,787.3||Â||Â||1,787.3|
|Issue of share capital, net||10(b)||58,930||28,068.0||1,718.0||Â||Â||29,786.0|
|Balance at September 30, 2010||Â||418,504||$ 88,704.3||$Â 8,544.3||$Â 4,432.4||Â Â Â (45,470.7)||$ 56,210.3|
Luna Gold Corp.
Interim Consolidated Statements of Cash Flows
(expressed in thousands of U.S. dollars, except where indicated)
|Â||Note||Three months ended September 30||Nine months ended September 30 Â|
|Cash flows from operating activities||Â||Â||Â||Â||Â|
|Net loss for the period||Â||$Â Â Â Â (8,102.1)||$Â Â Â Â Â Â Â Â Â (83.0)||$Â Â (12,801.4)||$Â Â Â Â Â Â Â (813.5)|
|Items not affecting cash||Â||Â||Â||Â||Â|
|Â||Depletion and amortization||Â||303.8||7.7||359.2||79.0|
|Â||Unrealized foreign exchange gain||Â||(21.4)||(1,477.7)||(300.4)||(2,854.0)|
|Â||Stock-based compensation expense||Â||624.1||371.0||1,644.7||537.2|
|Â||Accretion of asset retirement obligation||Â||47.6||-||139.5||-|
|Â||Accretion of interest||Â||226.7||21.2||226.7||103.9|
|Change in non-cash operating working capital||Â||Â||Â||Â||Â|
|Increase in accounts receivable and prepaid expense||Â||(496.5)||(436.4)||(564.8)||(589.1)|
|Increase in inventory||Â||(5,160.7)||-||(8,734.5)||-|
|Increase (decrease) in accounts payable and accruals||Â||(2,356.7)||471.1||(1,598.3)||(957.5)|
|Payments to the Departamento Nacional de Producao Mineral (“DNPM”)||9(c)||(153.9)||(76.5)||(242.1)||(200.3)|
|Cash flows from financing activities||Â||Â||Â||Â||Â|
|Proceeds from debt financing, net||9(a)||-||-||13,868.8||-|
|Proceeds from Sandstorm transaction||Â||-||-||-||17,800.0|
|Proceeds from issuance of special warrants, net||10(b)||(269.2)||-||29,786.0||-|
|Proceeds on issuance of common shares||Â||193.5||32.3||376.9||25,060.7|
|Cash flows from investing activities||Â||Â||Â||Â||Â|
|Proceeds from disposal of held for trading investment||Â||-||-||2,964.2||-|
|Payments for property, plant and equipment||Â||(3,689.3)||(7,632.4)||(30,370.0)||(9,589.0)|
|Effect of exchange rate changes on cash||Â||30.9||1,418.8||332.6||4,049.9|
|Increase (decrease) in cash and cash equivalents||Â||(18,887.5)||(10,972.7)||(5,330.9)||6,791.7|
|Cash and cash equivalents – beginning of period||Â||26,423.8||20,751.4||12,565.5||355.9|
|Cash and cash equivalents – end of period||Â||$Â Â Â Â 7,567.2||$Â Â 11,197.5||$Â Â Â Â 7,567.2||$Â Â 11,197.5|
|Supplemental cash flow information||Â||Â||Â||Â||Â|
|Interest and taxes paid||Â||308.0||-||855.8||-|
|Significant non-cash transactions:||Â||Â||Â||Â||Â|
|Â||Accrued amount for property, plant and equipment||Â||-||530.8||-||838.2|
|Â||Stock-based compensation capitalized||Â||-||66.7||142.6||77.1|
SOURCE Luna Gold Corp.