Luna Gold LGCUD

RE: RE: RE: RE: AGM

[mork10]

I also wish other directors and top executives would back their confidence in Luna Gold with the purchase of  shares on the open market like Luis Baertl does instead of just relying on their stock option plans but I don´t know their personal financial situation & priorities and I´m not sure it´s a widely done practice.

There is no doubt that we´re all very frustrated with the performace of the stock but I´m afraid it´s not going to be a case of instant gratification. Besides the terrible overall market conditions and the uncertainty regarding the direction of gold prices, Luna Gold still has to achieve some important milestones before becoming a serious contender  for a major acquisition. It seems to me however that they are moving in the right direction. They doubled their oficial resources last december to more then 4 million ounces of gold, most of it in Aurizona and they are now looking at expanding those resources by drilling in peripherical areas to the Piaba deposit as well conducting in-depth drilling. They said they would start drilling the Luna Greenfields in the Q3 where "they expect to find at least as many reserves as in Aurizona". That will take some time though, I guess a minimum of 18 months. If they are correct then they will be sitting in a couple of years with between 8 and 10 million ounces of  gold resources. That´s a game changer! Regarding production and its cash costs they ran into problems early last year, changed all the on site operational team and have been making progress ever since.  Recovery rates are improving, cash costs are decreasing and other external factors like lower inflation in Brazil and devaluation of the Real are also helping. Production is slowly increasing and will reach a a rate of 100.000 oz/year by Q4. I don´t know when or were will they opt for the next major step in plant capacity (above 200.000 oz/yr), it could be in Aurizona or they might wait until they have enough reserves in Luna Greenfields to open a new plant there. My guess is that this won´t happen until 2014 and hopefully it will through a new plant in the 100% owned Luna Greenfields. The more time passes before they get thare the less likely it will be that they will need another round of external financing. In summary: Luna could well find itself in 2014-2015 with between 8 and 10 million ounces of gold, a plant capacity of over 200.000 oz/yr, competitive cash costs and I will not guess what the price of gold will be but every time the price of gold goes down it eventually bounces back higher! This is definitly not a short term play but posibly a very good medium term play.