Vancouver, July 5 , 2011 - Luna Gold Corp. (TSXV-LGC/BVL-LGC) ("Luna Gold" or the "Company") provides an update on key production outputs for Q2, 2011 at the Aurizona Gold mine operation and an exploration summary at Aurizona.

During the quarter our performance had mixed results, lower than forecast production has been offset by success in rebuilding the operational team and excellent results in exploration.

The management team have developed plans to deliver feasibility levels of gold production and are currently executing this plan. The new management team includes a Vice President Operations, a General Manager Aurizona Gold Mine and Mining Manager Aurizona Gold Mine.

Management evaluation of the Aurizona plant have confirmed the process plant construction did not deliver key process and operational performances as designed. Luna Gold management and our consulting engineers have identified major and minor modifications required to achieve reliable and consistent feasibility design performance. Plant improvements and upgrades will proceed progressively while production continues.

Performance in Q2 was low due to planned downtime to complete upgrades in the SAG mill and other modifications. Changes in the SAG, screens and other mechanical upgrades required re-commissioning the plant causing lower throughput and recoveries.

The production results for Q2 below demonstrate a positive upward trend in all key indicators, particularly tonnes throughput, grade and gold produced. Looking forward to Q3 and Q4 ramping up to feasibility target production of 4,500 to 5,000 ounces of Gold per month will require a 18% increase in mill throughput and a 24% increase in recoveries. Management plans feasibility targets to be achieved in Q3 and produced consistently in Q4.


Production results for Q2 2011 were as follows:

Apr 11 May 11 Jun 11 Q2 11
Mined waste -- tonnes 5,239 - 5,759 10,998
Mined ore -- tonnes 4,114 - 108,138 112,252
Ratio of Ore to Waste 1:1.29 - 1:0.05 1:0.1
Ore Grade mined -- g/t 1.37 - 1.25 1.25
Processed ore -- tonnes 32,465 82,654 95,416 210,526
Average grade processed -- g/t 1.02 1.32 1.31 1.27
Average recovery rate % 63 61 69 65
Gold produced (ounces) 671 2,123 2,766 5,560
Gold sold (ounces) 3,215 691 3,018 6,924


NOTE: Production numbers are preliminary and subject to final adjustment

In April the Aurizona Gold mine underwent a planned shutdown to complete an upgrade to the SAG mill and other plant modifications necessary to ramp up production to Feasibility target. The upgrade was completed in 19 days without production.

The feasibility study, for year one of production, is an average of 4,580 ounces per month from 116,000 ore tonnes milled at 1.32 g/t with recoveries of 93%. During May and June operational staff progressively increased throughput and recoveries to deliver consistent and reliable production for the future of the operation.

The April upgrade addressed the following plant improvements;
Installation of a reduction gearbox to reduce the SAG rotation speed.
Installation of an inching drive for safe and efficient mill liner changes
Complete mill reline and ball charge
Installation of a trash screen and a carbon recovery screen.
Installation of a pinion and commissioning #4 Ball Mill
Repairs to the apron feeder
Replacement of thickener pumps
The speed reduction of the SAG was successfully implemented, however the retro-fit wet seal in the SAG continues to with intermittent downtime. The Company expects limited downtime until this repair is complete, Ausenco Brazil is assisting this repair.

By mutual agreement in March/April 2011, the mining contractor engaged at Aurizona completed a two year contract and demobilized from site. In preparation for the wet season (December to June) Aurizona established a ROM stockpile with capacity for three months ore supply to the mill. In the absence of a mining contractor and the onset of the wet season these stocks were allocated to feed the mill for April, May and June until the mobilization of a new mining fleet to Aurizona which was completed at the end of June 2011. This fleet is now operational.

Strengthening our Operations Management Team

In addition to mechanical improvements at Aurizona, Luna Gold has significantly strengthened the Operational management structure with the addition of three key management positions. Luna Gold will continue to increase the skills of our workforce and engage high quality management to develop a high quality, technically strong management team to deliver shareholder value.

Vice President Operations

Peter Mah joined the Company in June and will lead the operational team through re-commissioning and achieving feasibility level production. Peter is a mining and processing engineer with a Master's degree in Rock Mechanics from UBC. His experience base is from progressive management positions with Gold Corp, Newcrest and Newmont throughout Canada, USA, South East Asia and Africa. Peter will be based in Vancouver BC Canada. Peter has spent significant time at Aurizona with the Operations team.

General Manager -- Aurizona Gold Mine

Jim Healy, a well experienced Mining Engineer (New Mexico Institute of Mining & Technology). Jim has worked extensively in engineering and project management with BHP Billiton, INCO, Aura Minerals and JDS Engineering and Mining in the USA, Canada, Australia, Indonesia, Brazil, South America and New Caledonia. Jim is fluent in Portuguese and has direct experience in General Management in Brazil. Jim brings a talent of practical and professional management to our operations and will be based in Brazil.

Mining Manager -- Aurizona Gold Mine

Alberto Reyes will commence with the Company in July to build on the existing technical and managerial strength at Aurizona. Alberto is a mining engineer from Ontario with broad experience in mine operations and mine planning. He brings to the Company extensive experience gained with an International Mining Consultancy, Newcrest Mining Ltd and Gold Fields in Canada, USA, South America, Australia and Africa. Alberto will implement systems and processes into the operations to deliver discipline in grade control and mining efficiencies over the life of the mine. Alberto is fluent in Portuguese, English and Spanish.


Production and Cash Costs and Guidance

Low gold production in the Q2 ramp up will result in higher cash costs per ounce. These are expected to reduce as target production is achieved in Q3. Luna Gold will provide the market with actual cash costs and guidance for 2011 and 2012 in the Q2 MD&A to be released on completion of the half yearly accounts.

Exploration

Luna Gold is engaged in an aggressive exploration program at Aurizona and the Maranhão Greenfields project. At Aurizona seven drills are in operation to increase measured and indicated resources and to date assay results from 39 holes totalling 10,666 meters have been received. All drill holes to date have intersected considerable zones of gold mineralization with some outstanding results and significantly the deposit remains open at depth on all sections. Drilling to date has intersected mineralization at depths of up to --350 meters RL. Drilling will continue and the Company is on target to deliver an updated resource update in Q4, 2011.

Recent drill results include:
44.00 meters @ 4.94 g/t Au including 0.50 meters @ 21.40 g/t Au, 0.50 meters @ 14.35 g/t Au and 5.00 meters @ 30.51 g/t Au in BRAZD306 (Press Release 28/06/2011)
48.00 meters @ 3.29 g/t Au including 12.00 meters @ 7.93 g/t Au and 1.00 meter @ 9.84 g/t Au in BRAZD299 (Press Release 06/06/2011)
55.00 meters @ 4.15 grams/tonne Au including 1.00 meter @ 20.00 grams/tonne Au and 17.00 meters @ 7.80 grams/tonne Au in BRAZD293A (Press Release 18/04/2011)
Previous Press Releases: http://www.lunagold.com/s/NewsReleases.asp

The drill rigs are now testing for eastern and western extensions to the Piaba deposit. Based on the success of the current program and the potential to increase resources at the Piaba deposit the Company has extended the current drill program by 20,000 meters. Luna Gold Exploration is also advancing near mine exploration targets to drill stage and has completed auger and trench programs at several targets. Results from these programs will be provided as assays are received.

At the Maranhão Greenfields areas Luna is focused on advancing gold targets to drill stage for 2012. Recent work has focused on soil gridding, geophysical surveying and geological mapping. The 2012 exploration program will focus on delivering maximum shareholder value through exploration on 100% owned Luna Gold mineral rights in addition to further expanding resources at the Aurizona near mine exploration targets.

On behalf of the Board of Directors

LUNA GOLD CORP.
John Blake -- President and CEO
Website: www.lunagold.com