Luna Gold Completes US$5,000,000 Financing

VANCOUVER, BC--(Marketwired - May 20, 2016) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES

Luna Gold Corp. (TSX: LGC) ("Luna" or the "Company") is pleased to announce that it has completed a secured short-term loan financing by way of an issuance of secured notes (the "Notes") for an aggregate of US$5,000,000 on a private placement basis (the "Transaction") to Pacific Road Capital II Pty Limited, as trustee for Pacific Road Resources Fund II and Pacific Road Capital Management GP II Limited, as general partner of Pacific Road Resources Fund II L.P.

The loan evidenced by the Notes will mature on April 18, 2017. The interest on the loan will be 10% per annum compounded quarterly and payable in arrears together with the principal amount at maturity subject to acceleration on an event of default. Principal and interest may be repaid in whole or in part prior to maturity at Luna's election without penalty or additional payment. The loan is secured by a first priority security interest in all of Luna's Canadian real and personal property, including a fixed and specific security interest in all shares of its subsidiary (Aurizona Goldfields Corporation) and security in bank accounts and will be guaranteed on a secured basis by Aurizona Goldfields Corporation.

The Company intends to use the proceeds of the Transaction to complete the technical work related to the Pre-Feasibility Study of a restart of the Aurizona gold mine and to submit permits at Aurizona, as well as for general working capital purposes.

About Luna Gold Corp.

Luna is a gold company engaged in the exploration and redevelopment of the past-producing Aurizona gold mine in Northern Brazil which was put on care and maintenance in late 2015. The Company is actively advancing the mine redevelopment in the areas of engineering, permitting and project financing.

On behalf of the Company

LUNA GOLD CORP.
Marc Leduc P.Eng. - President and Chief Executive Officer
Website: www.lunagold.com

Forward-Looking Statements
This release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements include, but are not limited to, statements with respect to the Company's intended use of the proceeds of the Transaction, and future gold production and/or the results of analysis on gold production. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Luna 's periodic filings with Canadian Securities Regulators. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other exploration data, the potential for delays in exploration or development activities, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties with or interruptions in production and operations, fluctuating metal prices, unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, regulatory restrictions, including environmental regulatory restrictions and liability, competition, loss of key employees, and other related risks and uncertainties, including those disclosed in the risk factors section of the Company's latest annual information form and in other documents filed at www.sedar.com from time to time. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.