Projects

Ownership

On October 3, 2007, as amended on December 10, 2008, the Company, via its wholly owned subsidiary, Luna Gold Mineração Ltda (LGM), entered into an agreement to acquire a 100% interest in the Cachoeira gold project in Para State, Brazil from a consortium comprised of a wholly-owned subsidiary of Kinross Gold Corporation and two private Brazilian companies (the "Vendors"). To acquire the interest, the Company paid the Vendors $280,194 ($500,000 BRL) upfront, committed to incur exploration expenditures of approximately $9,500,000 BRL ($4,900,000 US) by October 2010, and to provide a royalty of 4% of net operating profit. The Company has the right to buy-back 2% of the operating royalty for a payment of $4,000,000 anytime prior to the first anniversary of commercial gold production. Commercial production must commence by October 2012 or the Company will pay a fine of $200,000 each year in lieu of the operating royalty until commercial production is achieved.

Additionally, the Company must present a NI 43-101 compliant resource estimate by October 2010 else the Company will pay a fine of $200,000 each year. Kinross has the right to acquire a 51% interest in the project by paying the Company the amount the Company invested in the project during the exploration stage should a mineral reserve which exceeds 2 million ounces of gold be defined.
On October 31, 2008, the Cachoeira project was put on care and maintenance to preserve cash.

At June 30, 2009, the Company incurred accumulated exploration expenditures of $3,945,709 BRL as part of the Company's commitment to incur exploration expenditures of $9,500,000 BRL.