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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 Tatajuba deposits on which the current resource is based. Luna exploration team recently completed a 40,000 metre drill program and released a National Instrument 43-101 resource update showing a 250% increase over the previous mineral resource estimate. Measured and Indicated gold resources at Aurizona now total 3.2 million ounces.
Aurizona Gold Stream
Sandstorm has a gold stream agreement to purchase 17% of the life of mine gold produced from Aurizona at a per ounce price of US$400. Sandstorm made an upfront payment of US$17.8 million in cash and 5.5 million common shares of Sandstorm to acquire the stream in May 2009.
If Luna develops an underground mine on Aurizona, Sandstorm has the right (but not the obligation) to purchase 17% of the payable gold from the underground mine, at a per-ounce price of US$500. For consideration, Sandstorm would pay 17% of the capital expenditures incurred to determine the economic viability and to construct the underground mine.