Luna Gold LGCUD

Luna Gold Announces Forbearance Agreement

[davgro]

March 05, 2015 17:37 ET

Luna Gold Announces Forbearance Agreement

VANCOUVER, BC--(Marketwired - March 05, 2015) - Luna Gold Corp. (TSX: LGC)(: LGC)(: LGCUF)("Luna" or the "Company") announces that it has entered into a forbearance agreement (the "Forbearance Agreement") with Société Générale, Mizhuho Bank, Ltd. and the other parties (collectively, the "Finance Parties") to the Company's February 15, 2013 credit agreement, as amended (the "Credit Agreement"), in connection with the Company not being in compliance with certain covenants under the Credit Agreement, as discussed in our February 17, 2015 news release and Management's Discussion and Analysis for the third quarter ended September 30, 2014.

Under the terms of the Forbearance Agreement, the Finance Parties will refrain from exercising any rights or remedies that they may have under the Credit Agreement or otherwise in respect of the Company's covenant breach and any subsequent default by the Company until May 1, 2015, unless a breach of the Forbearance Agreement occurs. If Luna remains in default under its covenants under the Credit Agreement and the Forbearance Agreement is not extended, the Finance Parties would be entitled to exercise any of their rights under the Credit Agreement. There can be no assurances that the Company will remedy the default or extend the forbearance.

As compensation for their forbearance, the Company must pay the Finance Parties a fee of $100,000 and apply approximately $6,700,000 in cash held in a reserve account in part to the outstanding principal amount owed under the Credit Agreement and in part as security for outstanding obligations under the related hedge agreements.

About Luna Gold Corp.
Luna is a gold production and exploration company engaged in the operation, discovery, and development of gold projects in Brazil.

On behalf of the Company

LUNA GOLD CORP.

Marc Leduc -- President, Chief Executive Officer and Director

https://www.marketwired.com/press-release/luna-gold-announces-forbearance-agreement-otcqx-lgcuf-1998047.htm