Cachoeira

The Cachoeira project has a  NI 43-101 indicated mineral resource of 17.5 million tonnes at 1.23 g/t Au or 691,676 ounces of gold at 0.35 g/t Au cutoff and an inferred resource of 15.7 million tonnes at 1.07 g/t Au, or 537,756 ounces of gold at 0.35 g/t Au cutoff.

The project is located on the Gurupi Gold Belt, approximately 220 kilometres southeast of the Pará State capital of Belém and about 270 kilometres northwest of the port city of São Luis, Maranhão State. The Cachoeira Project comprises one contiguous block consisting of two mining and three exploration licenses covering approximately 4,742 hectares. The project has a long history of gold mining dating back to the 17th century when gold was first discovered by colonial settlers (Bandeirantes). Exploration at the Cachoeira Project was initiated in 1985 by Companhia de Mineração e Participações and Mineração CCO Ltda ("CCO") and continued through the 1990's with work by Brazilian Goldfields Ltd ("BGZ") and Goldfields Ltd ("Goldfields"). Companhia Vale do Rio Doce ("Vale") conducted an exploration program at Cachoeira in 2003. Luna commenced exploration at the property after it acquired it in 2007. The Company acquired the project in 2012.

The Company recently signed a drilling contract with Servitec Foraco Sondagem S.A. and expects to commence an initial drill program at the Cachoeira Project in the near term, the size of which will be determined by the outcome of ongoing studies. The Company will also explore extensions of the currently known mineralized zones as in-house district wide studies intimate that mineralization may not only be constrained to the three zones identified on the property to date.

Resource Estimate

A National Instrument 43-101 ("NI 43-101") mineral resource estimate, entitled “Technical Report and Resource Estimate on the Cachoeira Property, Pará State, Brazil” prepared by Gregory Z. Mosher, P.Geo. of Tetra Tech, Inc., dated April 17, 2013 and amended and re-stated October 2, 2013. The Amended Report amends and restates the technical report of the Company dated April 17, 2013 with the same title reported an indicated mineral resource of 17.4 million tonnes at 1.40 g/t Au or 786,737 ounces of gold and an inferred resource of 15.6 million tonnes at 1.12 g/t Au, or 563,200 ounces of gold. Tetra Tech has estimated the mineral resources in accordance with NI 43-101 - Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining, Metallurgy and Petroleum classification system, using the Company's dataset of 42,432 assays, which includes historical diamond drilling, outcrop, underground channel samples, auger and reverse circulation drilling.

INDICATED VEINS
TONNES
GOLD
GOLD CAP
GOLD
GOLD CAP
 
@ 0.35 G/T
G/T
G/T
OZ TROY
OZ TROY
ARARA VEINS
528,435
1.805
1.740
30,658
29,554
CORUJA VEINS
84,272
2.026
2.016
5,490
5,463
TUCANO VEINS
4,051,741
2.160
1.846
281,365
240,514
TOTAL VEINS
4,664,448
2.12
1.84
317,514
275,531

 

INDICATED ALTERATION
TONNES
GOLD
GOLD CAP
GOLD
GOLD CAP
 
@ 0.35 G/T
G/T
G/T
OZ TROY
OZ TROY
ARARA HALO
1,592,239
1.623
1.056
83,098
54,081
TUCANO HALO
11,213,406
1.071
1.004
386,124
362,064
TOTAL ALTERATION
12,805,645
1.14
1.01
469,223
416,145

 

TOTAL INDICATED
17,470,093
1.40
1.23
786,737
691,676

 

ALL INDICATED
TONNES
GOLD
GOLD CAP
GOLD
GOLD CAP
 
@ 0.35 G/T
G/T
G/T
OZ TROY
OZ TROY
ARARA  VEINS + HALO
2,120,674
1.67
1.23
113,757
83,635
CORUJA VEINS
84,272
2.03
2.00
5,490
5,415
TUCANO  VEINS+HALO
15,265,147
1.36
1.23
667,490
602,578

 

TOTAL INDICATED
17,470,093
1.40
1.23
786,737
691,676

 

INFERRED VEINS
TONNES
GOLD
GOLD CAP
GOLD
GOLD CAP
 
@ 0.35 G/T
G/T
G/T
OZ TROY
OZ TROY
ARARA VEINS
631,690
2.41
2.38
48,871
48,293
CORUJA VEINS
139,835
1.62
1.61
7,277
7,246
TUCANO VEINS
2,207,256
2.01
2.00
142,982
141,588
TOTAL VEINS
2,978,781
2.08
2.06
199,130
197,126

 

INFERRED ALTERATION
TONNES
GOLD
GOLD CAP
GOLD
GOLD CAP
 
@ 0.35 G/T
G/T
G/T
OZ TROY
OZ TROY
ARARA HALO
1,757,048
1.17
0.80
65,865
45,001
TUCANO HALO
10,930,751
0.85
0.84
298,205
295,629
TOTAL ALTERATION
12,687,799
0.89
0.84
364,070
340,630

 

TOTAL INFERRED
15,666,580
1.12
1.07
563,200
537,756

 

ALL INFERRED
TONNES
GOLD
GOLD CAP
GOLD
GOLD CAP
 
@ 0.35 G/T
G/T
G/T
OZ TROY
OZ TROY
ARARA  VEINS + HALO
2,388,739
1.49
1.21
114,735
93,294
CORUJA VEINS
139,835
1.62
1.61
7,277
7,246
TUCANO  VEINS+HALO
13,138,007
1.04
1.04
441,187
437,217

 

TOTAL INFERRED
15,666,580
1.12
1.07
563,200
537,756

 

The resources were estimated by inverse distance squared (ID2) weighting and grades were interpolated into blocks in a single pass. A minimum of two and a maximum of 12 composites within the volume of the search ellipse were necessary for a grade to be interpolated into a block. A maximum of two composites was permitted per drill hole so that a grade could be interpolated into a block on the basis of a single drill hole. Composites could only be drawn from the geological model for which a grade was being estimated to avoid over- or underestimation of grades within a given geological domain.

In addition to capped and uncapped gold grades, the number of drill holes and composites used for each estimated value was recorded as well as the mean distance of those composites from the centroid of the block.

Resources were classified as indicated or inferred. In order for a block to be classified as indicated, it was necessary that the grade that it contained was based on a minimum of four drill holes and that the mean distance of the composites from those holes was 50 meters or less from the centroid of the block. All blocks that failed to meet the criteria for indicated classification, but had an estimated grade of at least 0.001 g/t gold were classified as inferred.

ARARA DEPOSIT

Arara is located at the northern end of the CSZ contiguous with the Coruja deposit and has not been significantly worked by garimpeiros. Deposit geology consists of a NNE-trending sheared and highly foliated sequence of mafic and ultramafic units and tuffs that dip approximately 45 degrees E-SE. East-northeast and E-W faults interrupt the main NNE trend in the northern part of the deposit. Gold mineralization is hosted in the footwall Tuff Unit and occurs in white to grey colored quartz veins ranging from 0.2 to 3 m wide aligned parallel to foliation and dipping to ESE and also disseminated in quartz vein stockworks within the albite-quartz-sulfide wall rock alteration. Arara mineralization is open at depth and to the north.

CORUJA DEPOSIT

Coruja is located between the Arara and Tucano deposits in the central portion of the CSZ and consists of a steeply dipping shear zone extending for 1.4 km which hosts a mineralized quartz vein system. Coruja was extensively worked by artisanal miners to shallow depths in the 1980´s who slot mined the quartz veins and rich surface oxides. Historic excavations occur over a 1.4 km strike length. Deposit geology consists of a series of steeply east-dipping elongate volcanoclastic units, tuffs and mafic-ultramafic schists with minor gabbroic dykes that were drawn into and attenuated within the CSZ. The volcano sediments form the deposit hanging wall and the mafic-ultramafic schists constitute the footwall. Gold mineralization is predominantly hosted in the Tuff Unit and occurs in quartz vein sets that run up the centre of the deposit. The Coruja vein set is quite continuous though pinches and swells locally along strike and down-dip. Average width of the main vein at surface is 1.5 m though it locally attains widths of up to 4 m. Mineralization is associated with a high resistivity anomaly within areas of moderate to strong IP response consistent with quartz veining at depth. Wall rock to the quartz veins is locally albitized and silicified. Wide-spaced drilling at Coruja has cut several high-grade quartz veins including Luna drilling in 2008 that intersected 20.00 m @ 9.04 g/t Au including 6.00 m @ 27.72 g/t Au (not true thickness).

TUCANO DEPOSIT

Tucano is located at the southern end of the CSZ and consists of a series of multiple stacked sheared and faulted gold mineralized zones hosted in a highly foliated sequence of sericite and chlorite schist. At Tucano, the Cachoeira Shear Zone (CSZ) is a left lateral wrench system with local antithetic right lateral shears. The shear system as a whole appears to be a related to NE- SW compressional coupling. Shears controlled the gold-bearing veins at Tucano, both as shear parallel networks and as oblique vein systems penetrating into the footwall and hangingwall. The intersection between the dominant shears and the large oblique Au-bearing quartz veins appears to be the plunge orientation for the Au lodes. Faults control the gold bearing veins at Tucano both as shear parallel networks and as tensional vein systems. These multiple fault generations rendered the host units highly permeable to the gold mineralizing fluids. Closely associated with the fault zones are envelopes of intense albitic alteration. The end member of this is nearly massive albite quartz sulfide rock (AQS), which has fine veinlets of carbonate quartz and pyrite with local arsenopyrite. The contact between schist and AQS is gradational over <5m. Gold-bearing quartz veins occur as two main types:

  1. Large white to grey quartz veins arranged oblique to the main faults. These are 1-5 m wide and 10-40 m long. They are somewhat curved or Z shaped, dipping moderate to steeply NW or SE, and are locally dragged and reworked into the bounding shears.
     
  2. Smoky quartz veins with cm-thick ladder quartz-carbonate networks. These form an en echelon pattern of curved shear-parallel veins with 1-5m widths and are segmented over a 70 m strike length. The host rock is chlorite-quartz-sericite-carbonate±Cr muscovite±pyrite schist developed within the shears. Ladder vein networks comprised of cm-scale quartz-carbonate veinlets are systematically distributed within the smoky quartz veins. They are perpendicular to the vein trace, and can also occur within the jog bridges between vein segments.

For further information respecting the above resource estimate for the Cachoeira Gold Project, please refer to the technical report by Gregory Z. Mosher and Michael F. O’Brien of Tetra Tech with an effective date of October 2, 2013, and titled “Technical Report and Resource Estimate on the Cachoeira Property, Para State, Brazil”, a copy of which is filed under BRI`s profile on SEDAR at www.sedar.com.