Luna Gold thwarts thieves in Brazil

The second time around wasn’t so lucky for a band of robbers at Luna Gold‘s (LGC-V) Aurizona mine in northeastern Brazil.

A group of armed thieves descended on the mine in the early hours of Nov. 9, but Luna’s beefed-up security stood up to the task – no gold was taken, and employees were unharmed.

The company increased security after bandits made off with 1,500 oz. gold last December. Fortunately, employees were also unharmed in that robbery.

John Blake, Luna’s president and chief executive, described the thieves as “heavily armed, well trained and well organized.”

And while the robbers have not yet been captured by local authorities, Blake says their behaviour indicates a “strong possibility” that they were the same group that robbed the mine last year.

In the latest attempt the thieves took employees as hostages from
a nearby village and tried to force their way into the site’s gold storage facility.

All of the hostages were released unharmed and no injuries were sustained by employees at Aurizona.

Luna says production at Aurizona is continuing without interruption, although there was some damage to the gold storage facility.

While unable to get into specifics, Blake credited the policies and procedures that were introduced after the previous robbery. He said the company increased the mine’s barriers and made it harder for prospective thieves to scope out the site.

Aurizona is situated in the Maranhao state of northeastern Brazil, an area that lacks much economic wealth.

But Blake wasn’t about to blame the robbery on poor economic conditions. He said the communities around the project are largely pro-mining, and welcome the economic benefits the mine brings.

“Maranhao has a population of a lower socio-economic class than the rest of Brazil,” he says. “But we employ around eight hundred people, and we’re doing our part to help improve things in the community.”

Word of the attempted robbery came two days after Luna released drill results that speak to the considerable upside of Aurizona.

The results came out of 22 new holes drilled at the site’s Piaba gold deposit, and were highlighted by 68 metres grading 2.46 grams gold, 50 metres grading 3.87 grams gold and 13 metres grading 33.63 grams gold.

Results were part of a recently completed, 40,000-metre drill program. The drilling will go into an early December update on the mine’s resources.

Most of the holes reported from the latest assays were new discoveries along eastern and western strike extensions to the Piaba deposit that lie outside the boundary of the 2009 resource update.

Blake says that the resource estimate will likely add new tonnage while increasing inferred resources into the measured and indicated category.

Proven reserves stand at 1.4 million tonnes grading 1.46 grams gold and probable reserves are 15.8 million tonnes grading 1.36 grams gold, for total reserves of 731,000 oz. Measured resources come in at 1.5 million tonnes grading 1.44 grams gold and indicated at 19.6 million tonnes grading 1.29 grams gold, for total measured and indicated resources of 904,300 oz. Inferred resources stand at 10.9 million tonnes grading 1.14 grams gold for 402,000 oz. gold.

The company is looking to extend the 2.9-km strike length, with the latest results coming from holes that total 5,088 metres and cover a 3.1-km strike length.

Aurizona is producing gold at a rate of 5,000 oz. per month and at a head grade of 1.36 grams gold per tonne.

The Piaba deposit is being mined via open pit and has a 10-year mine life. Luna plans to expand production in phases up to 200,000 oz. a year while maintaining the 10-year mine life. It is in the midst of launching a scoping study that will consider a mill to produce 100,000 oz. gold by 2013.

The company has $40 million in the bank.