|
|
|
Friday, October 31, 2008
Luna Gold Announces Private Placement Of C$2 Million And Reorganization And Cost Cutting Measures
| |
Vancouver, October 31, 2008 -- Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") announces the following:
Non-Brokered Private Placement
The Company has arranged a non-brokered private placement of Units at a price of $0.10 per Unit for gross proceeds of up to $2,000,000, subject to the approval of the TSX Venture Exchange. Each Unit consists of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to purchase one common share at a price of $0.25 for a period of 24 months from closing.
The Company has agreed to pay a finder's fee in cash equal to 7% of the gross proceeds and to issue broker's warrants equal to 7% of the number of Units sold to arm's length parties. Each broker's warrant will entitle the holder to purchase one common share at a price of $0.10 for a period of 12 months from closing.
If the closing market price of the Company's common shares is $0.40 or higher over a period of 15 consecutive trading days at any time after four months following the closing of the private placement, the Company will be entitled to accelerate the term of the warrants and broker's warrants, which will expire on the 15th business day after the date of the notice unless exercised by the holder prior to that date.
The net proceeds of the private placement will be used to reduce current accounts payable and for working capital purposes.
Corporate Restructuring
Effective immediately, the Company will close its Toronto office and centralize its administration in Vancouver. In furtherance of the Toronto office closure, Tim Searcy, President and CEO, and Martin Reid, CFO will be stepping down effective today. Tim Searcy will remain a Director of the Company and will continue to assist Luna in that role.
James Bahan, the Company's current COO has been appointed the Chief Executive Officer and Marcel de Groot, recently appointed Chairman of the Board of Luna, has been appointed interim Chief Financial Officer.
"The Board would like to thank Mr. Searcy and Mr. Reid for their service and support to the Company and its development," said Mr. Bahan. "We wish them all the best in their future endeavours."
In addition, Mr. Bahan has been appointed as a Director of the Company to replace Carl Hering who has resigned as a non-executive director of the Company. The Company would also like to thank Mr. Hering for his contribution to the Company during his tenure as a Director. The Company's Board of Directors now consists of James Bahan, Marcel de Groot, Thomas O'Neil, Nolan Watson, and Tim Searcy.
Subject to regulatory approval and upon availability under the Company's Stock Option Plan, the Company has granted 2,000,000 stock options to James Bahan in his capacity as the new CEO. The options vest over a period of 2 years. In addition, the Company has granted 150,000 stock options to an officer of the Company. All of the options are exercisable over a period 5 years at an exercise price of $0.135.
The Aurizona and Cachoeira Projects
As a consequence of the current market conditions, the Company will be deferring any further development of the Aurizona project for the time being. Accordingly, the Aurizona project team is also being scaled back. Drilling and other technical work carried out since the feasibility study, as well as the current weakness in the Brazilian Real, indicate the potential for substantial improvements in the Aurizona project life, project size and return on investment.
Additionally, the Cachoeira exploration project has been put on care and maintenance until the Board of Directors considers it appropriate to recommence its exploration activities on the project.
"Current market conditions have dictated that the prudent course of action is to preserve cash and re-start development at Aurizona at a future date," stated Mr. Bahan. "With activity dramatically reduced at the Aurizona and Cachoeira Projects, Luna will be exploring new strategic relationships and partnerships concerning the projects," continued Mr. Bahan. "We consider both projects to be of extremely high quality and see them as continuing to be attractive investment opportunities."
About Luna Gold Corp
Luna is a mining exploration company focused on the acquisition, exploration, and development of gold resources and advanced stage gold exploration projects in northeastern Brazil.
On behalf of the Board of Directors
LUNA GOLD CORP.
Marcel de Groot, Chairman
Website: www.lunagold.com
For further information contact Investor Relations at (604) 689-7317 or toll free at 1-866-689-7317.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.
Regulatory Footnotes
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the United States Securities Act of 1933 and applicable state securities laws or an exemption from such registration is available.
Forward-Looking Statements:
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Luna Gold Corp.'s periodic filings with Canadian Securities Regulators. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other exploration data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. | |
|
|