Cachoeira Project

Overview

Cachoeira is an advanced gold exploration project located in northeast Brazil between the cities of São Luis and Belém. It consists of tens of mineralized zones, which include isolated quartz vein systems, hydrothermally altered host rocks, and stockworks within the N-S trending Cachoeira Shear Zone (CSZ). Drilling to date has intersected high-grade mineralized structures and wider zones of lower-grade gold mineralization. Like Aurizona it an orogenic gold deposit hosted by intrusives and volcanics, albeit it is structurally more complex. The geologic setting of the project area, the Gurupi Greenstone Belt, is an eastern extension of the Guiana Shield which contains several major Proterozoic gold deposits (e.g. Las Cristinas, Omai, Rosebel) extending from Venezuela to Brazil (Figs 1 & 2).
The Cachoeira project consists of three mining licenses and one exploration permit totaling approximately 3,700 ha and is divided into two main target areas:

Tucano - Tucano is located south of Cachoeira village (Fig. 3) and is the highest priority target at Cachoeira. It consists of a series of multiple stacked gold mineralized zones extending over a strike length of 400m hosted in a volcanic sequence. It is currently the site of a small garimpo (artisanal mine) operation.

Cachoeira North - The Cachoeira North area consists of Luna's mining permits located north of the federal highway BR-316 (Fig. 3). Two sub-parallel N-S trending mineralized trends host numerous gold targets including Coruja and Arara, drilled by Luna in 2008, and which returned high gold grades. There are over 20 hard rock (primary) gold garimpos located in the Cachoeira North area.

Current Reserves and Resources

Table 1 Mineral Resources - December 22, 2010
Luna Gold Corp. - Cachoeira Project

Classification	Location	Tonnes ('000s)	Grade (g/t Au)	Ounces ('000s)
Indicated	Tucano	10,077	1.14	371
	Arara	2,104	0.92	62
	Coruja	352	1.16	13
Total Indicated		12,533	1.11	446

Inferred	Tucano	5,344	1.28	219.1
	Arara	38	0.72	0.9
	Coruja	47	0.9	1.3
Total Inferred		5,429	1.27	221.3

Notes:

CIM definition standards were followed for Mineral Resources.
The Qualified Person for this Mineral Resource estimate is Patti Nakai-Lajoie, P.Geo.
Mineral Resources are estimated at a pit discard cut-off grade of 0.3 g/t Au. Preliminary open pit shells were used to constrain the resources.
The Tucano database consists of 86 diamond holes (DH), 78 reverse circulation (RC) holes, 6 combined RC/DH holes and 221 auger drill holes in addition to 70 surface channels and 32 underground channels.
The Arara database consists of 64 diamond drill holes, 101 auger drill holes, and 8 surface channels.
The Coruja database consists of 33 diamond drill holes, 14 RC holes, 2 combined RC/DH holes, 166 auger drill holes, and 86 surface channels.
High assays were capped at 30 g/t Au at Tucano and 10 g/t Au at Arara and Coruja.
Tucano, Arara and Coruja block dimensions: 10 m E x 10 m N x 5 m high.
Mineral Resources are estimated using a gold price of US$1,238 per ounce.
Bulk densities used were 2.70 t/m3 to 2.75 t/m3 in rock, 2.17 t/m3 to 2.40 t/m3 in the transition zone, and 1.72 t/m3 to 1.89 t/m3 in saprolite.
Numbers may not add due to rounding.
Mineral Resource estimates may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other factors.

Cachoeira Technical Report Feb. 7, 2011

File:	http://www.lunagold.com/i/pdf/CachoeiraTechReport.pdf
	17987 KB, approx. 55 minutes, 50 seconds at 56.6Kbps

Luna Gold Exploration Program

2007-2008
The Company has conducted the following Exploration programs at Cachoeira in 2007 and 2008:

Acquisition of satellite imagery
Survey of all historical drill collars and target areas
Soil sampling of entire project area
Geologic mapping / rock sampling
Diamond drill program (6000m) at Tucano, Coruja and Arara
Submittal of EIA report to state environmental authorities and ongoing monitoring programs

2010 Exploration Program

The 2010 Cachoeira exploration program is focused on finalizing an NI 43-101 compliant resource and technical report for the Tucano deposit via the following work programs: