Mr. John Blake reports

LUNA GOLD ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2013

Luna Gold Corp. has released its operational and financial results for the three-month period ended March 31, 2013.

First-quarter 2013 highlights

Operational and financial results (all financial amounts in U.S. dollars):

• Gold production of 17,203 ounces in the first quarter at an average unit cash cost of production of $757 per ounce and an average all-in cash cost of production of $1,033 per ounce;
• Revenues of $17.3-million at an average realized gold price of $1,606 per ounce;
• Gross profit of $5.6-million;
• Net loss of $600,000 (loss per share: one cent);
• Operating cash inflow before working capital movements of $4.2-million (four cents per share).

Company developments:

• Completed and released an updated measured and indicated mineral resource, and proven and probable mineral reserve at its Aurizona gold mine, increasing proven and probable mineral reserves to 2.36 million ounces at the Piaba gold deposit, representing a 222-per-cent increase when compared with the Piaba July, 2010, reserve statement;
• Completed an independent mineral resource update at the company's Aurizona gold mine, resulting in the company increasing measured and indicated resources to 3.63 million ounces and inferred resources to 1.04 million ounces;
• The Aurizona process plant expansion (phase I expansion) commenced construction and remains on budget with $5.8-million of contingency remaining available. Approximately 74 per cent of the engineering, procurement, and construction management was completed as at the date of this report;
• Announced positive assay results from the exploration drill program at the 100-per-cent-owned Touro target in the Luna greenfields. The goal is to define a National Instrument 43-101-compliant resource estimate;
• Completed a new $30.0-million corporate secured revolving credit facility with Societe Generale and Mizuho Corporate Bank;
• Appointed Geoff Chater as a director of the company.

For complete details on the first-quarter 2013 results, please refer to the financial statements, and management discussion and analysis on SEDAR or the company's website.

Strategic outlook

The company remains on target to achieve annual gold production between 95,000 and 105,000 ounces at an average annual cash cost of $705 to $715 per ounce of gold.

The company is in the process of implementing cost reduction initiatives and has revised its 2013 financial plan in response to reduced gold price expectations for the year. Management has reviewed its current expenditure plans in development, operations and exploration with the goal of reducing expenditures with as minimal impact as possible to the gold production and the phase I expansion.

As a result, management has initiated expenditure reductions as follows:

• All sustaining capital projects are under re-evaluation to maximize return on capital invested and protect the cash position of the company.
• The company is targeting a reduction of 50 per cent of sustaining capital from the previous guidance.
• Exploration expenditure has been reduced by 35 per cent for the remainder of 2013.

The completion of the phase I expansion remains on track for completion in Dec. 31, 2013. However, plans have been prepared to slow down this expansion if necessary in the event that the gold price continues to decline.

At Luna greenfields, the company's strategy is to reduce fieldwork to limited surface exploration programs that are required to maintain key exploration licences. These programs will include soil sampling, geologic mapping and auger drilling. The diamond drill program at the Touro target has been put on hold and work in this area will focus on defining new targets and improving the geologic model through desktop studies to permit the company to rapidly advance this target in the future.

Further review of expenditure plans is continuing, including a review of corporate expenditure and employee reduction plans.

First-quarter results

Gold production during the first quarter of 2013 was 7 per cent higher than the comparative quarter of 2012, but negatively impacted by drought conditions that persisted to the end of February, 2013. The increase was the result of improvements in the gold recovery percentage and higher-grade ore processed. However, the 17,203 ounces of gold produced was lower than the original guidance of 21,000 ounces but above revised guidance. The shortfall against the company's original guidance was due to the drought conditions in January and February, 2013. This resulted in a shortage of process water which reduced ore processing through the mill in January and February of 2013. The rains arrived in late February and operations returned to normal. In order to compensate for the production shortfall in January and February, management elected to process higher-grade ore for the remainder of the quarter. This resulted in Aurizona producing a monthly record of approximately 9,300 ounces of gold during March of 2013.

Commentary

"The beginning of 2013 has seen Luna Gold presented with two external challenges," stated John Blake, Luna's president and chief executive officer. "The first of these challenges, unfortunate drought conditions during January and February, is behind us and season rains are continuing. While these conditions did impact Aurizona's production during the first quarter, our guidance for 2013 has not changed. I am confident that we will make up this shortfall over the balance of the year. The second challenge Luna is experiencing is a period of market uncertainty that has had a dramatic impact upon the price of gold. We are focusing on cash conservation measures by reducing all discretionary expenditures.

"Market conditions influence both our development schedule and the pace of our exploration efforts," concluded Mr. Blake. "However, the potential of our properties is as promising as ever. This potential was reaffirmed by Aurizona's recent reserve and resource updates. I remain confident that we will continue to unlock this potential over coming quarters, and deliver value to our loyal shareholders."

Conference call details

Luna will host a conference call to discuss both the company's financial results and corporate developments. This call is scheduled to take place May 14, 2013, at 11 a.m. Eastern Time.

Toll-free (North America):  1-866-226-1793

Toronto local and international:  1-416-340-2218

A replay of the call will be available until May 28, 2013. The replay may be access by dialling either 1-905-694-9451 (Toronto local and international) or 1-800-408-3053 (toll-free). The passcode for the replay is 1948527.

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