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Aurizona is an orogenic gold deposit hosted in a greenstone belt of the São Luis Craton. There are a number of mineralized bodies on the property, but work to date has focused on the Piaba and Tatjuba deposits on which the current resource is based. Luna's exploration team recently completed a 40,000 metre drill program which has reported positive assay results from 44 new drill holes. A National Instrument 43-101 resource update is expected in the fourth quarter of 2011. To view the NI 43-101 technical report click here.
Sandstorm Transaction
Sandstorm has agreed to purchase 17% of the life of mine gold production from Aurizona for an upfront payment of US$17.8 million in cash and 5.5 million common shares of Sandstorm plus ongoing per ounce payments equal to the lesser of US$400 and the prevailing market price per ounce of gold. Sandstorm will not be required to contribute to capital or exploration expenditures in respect of the mining operations of Aurizona.
If Luna decides to develop an underground mine on Aurizona, Sandstorm will also have the right (but not the obligation) to purchase 17% of the payable gold from the underground mine, at a per-ounce price equal to the lesser of US$500 and the prevailing market price, in exchange for paying 17% of the capital expenditures incurred to determine the economic viability and to construct the underground mine.