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Nevada
| | |   Location The Cachoeira project is located in Para State in northeastern Brazil. The project is located 200 km due west of the capital of Para, Belem, - 250 km by paved highway BR316. It is 80 km from the Atlantic coast and 100 km southwest of Luna's feasibility stage Aurizona gold project History & Previous Work The project is made up of three mining permits and one exploration permit. The central permit was granted in 1944 and the others were granted in 1982 and 1996. With such a long history, the property has been worked by many operators in the past. Most recently, CVRD drilled 20 holes for over 3,000 m on one of the northern permits, as part of an earn-in commitment in 2004. Highlights from this program are:  Because this program intercepted grades and widths potentially suitable for underground mining, CVRD recommended a further 28 holes for 5,600 m, but never completed the program due to its corporate decision to exit the gold business. In 2000, Gold Fields Ltd. efforts were focused on a target in the southernmost permit of the property that contained both low-grade, bulk-minable targets and high-grade, vein targets. Gold Fields drilled 38 holes (diamond and RC) for more than 5,000 m. Some highlights from Gold Fields' and previous drill programs in that area are:  Luna's QP has not undertaken any independent analysis of the results of the previous exploration listed above, and therefore the data should not be relied upon. The limited timing of the review period and the number of interested bidders made it impractical for all bidders to re-analyze the drillcore. However, Luna believes that the quality of work undertaken by some of the previous operators (CVRD and Gold Fields Ltd.) meets or exceeds industry accepted standards. The two largest zones of mineralization identified to date, Arara in the north and Tucano in the south, are over 3 km apart and straddle the property boundaries of three of the permits. As a result, previous exploration of the project, which includes over 300 diamond, RC, and auger holes for more than 25,000 m drilled, has been piecemeal. Significant exploration potential is considered to exist both along strike and down dip of known mineralized zones. Luna will be the first company to review and compile all of the previous data enabling it to form a more comprehensive view of the mineralization and the project's potential. Luna's President, Tim Searcy, comments "Luna has gained access to this prospective, advanced-stage gold project for little more than money spent in the ground. During the due diligence for its Aurizona acquisition, the company recognized that the Sao Luis craton had excellent gold potential, good infrastructure, mining friendly governments, and was lacking active junior mining companies. Identifying an opportunity to become a significant player in this region, Luna has focused its growth efforts here. Cachoeira is the first opportunity for the company to execute on this strategy. Luna looks forward to following-up on targets generated by previous drill programs and generating new targets at Cachoeira." Terms of Cachoeira Acquisition Luna has agreed to pay the Vendors Brazilian Reais R$ 500,000 (approximately US$ 260,000) upfront, incur exploration expenditures of R$ 4.0 million in year 1 and R$ 5.4 million in year 2 (approximately US$ 2.1 million and 2.8 million respectively), and provide an operating royalty of 4%, for which Luna has the right to buy-back 2% for a payment of US$ 4 million anytime prior to the first anniversary of commercial production. Kinross has the right to back-in for a 51% interest should an estimate of 43-101 mineable reserves, to be calculated within 24 months, exceed 2 million ounces. Luna has created a new wholly-owned Brazilian subsidiary, Luna Gold Mineração Ltda., to receive the 100% interest in Cachoeira mining and exploration permits. The transfer of the permits is subject to Luna and the Vendors finalizing documents, completing the cash payment of R$500,000, and gaining the approval of the DNPM (Departamento Nacional de Produção Mineral). Geology The Cachoeira deposit is one of several shear-zone hosted hydrothermal gold deposits of the Proterozoic Gurupi Belt in northern Brazil which also hosts the Cipoeiro, Chega Tudo, Montes Aureos, and Serrinha deposits all of which are located within the NW-SE trending Tentugal shear zone. Strong correlations exist between the geology and mineralization styles of the Gurupi Belt and the West African metallogenic gold provinces. 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 km x 1.5 km. Drilling to date has intersected high-grade, mineralized structures and wider zones of lower-grade gold mineralization. Geological information and exploration data suggests that Cachoeira may initially be assigned to the class of Orogenic Gold Deposits. However, this model may change with exploration and deposit modeling. Luna will conduct an aggressive exploration program at Cachoeira focused on diamond drill testing of known mineralized structures and disseminated mineralization and a concomitant regional exploration program to extend known areas of mineralization. Luna identifies that a global exploration program, heretofore never conducted, which encompasses all of the mining permits, will rapidly advance Cachoeira to the resource definition stage. Garimpeiros are active on the southern zone, Tucano, previously in pits and now in shafts. Some workings have reached depths of 80m. Infrastructure The Cachoeira property is 250 km east of Belem, the capital of Para State, on highway BR316. It is a 2.5 hour drive from Belem to the project site on paved roads. Powerlines run alongside the highway and bisect the property too. Water is plentiful; the Piriá river is 6 km east of the project and the Gurupi river is 26 km west of the project. Full Drilling Results 
Maps and Photos
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