Vancouver, December 23, 2010 - Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") is pleased to announce a maiden National Instrument ("NI") 43-101 compliant mineral resource estimate at its 100% owned Cachoeira Project in Para State, northern Brazil. The mineral resource has been prepared by Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA) according to the guidelines of the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"). Cachoeira has an Indicated mineral resource of 12.5 million tonnes at 1.11 grams/tonne Au, or 446,000 ounces gold, and an Inferred resource of 5.4 million tonnes at 1.27 grams/tonne Au, or 221,300 ounces gold.

Mineral Resource Estimate

The Cachoeira mineral resource estimate comprises drilling results from the Tucano, Arara and Coruja deposits and is shown in Table 1. A plan map showing the location of the deposits and preliminary open pit shells has been uploaded to the Luna Gold website at www.lunagold.com or to view directly click here. A technical report will be filed on SEDAR in due course.


TABLE 1 MINERAL RESOURCES - DECEMBER 22, 2010
Luna Gold Corp. - Cachoeira Project

Classification
Location Tonnes Grade Ounces('000s) (g/t Au) ('000s)

Indicated
Tucano 10,077 1.14 371
Arara 2,104 0.92 62
Coruja 352 1.16 13
Total Indicated 12,533 1.11 446

Inferred
Tucano 5,344 1.28 219.1
Arara 38 0.72 0.9
Coruja 47 0.90 1.3

Total Inferred 5,429 1.27 221.3

Notes:
CIM definition standards were followed for Mineral Resources.
The Qualified Person for this Mineral Resource estimate is Patti Nakai-Lajoie, P.Geo.
Mineral Resources are estimated at a pit discard cut-off grade of 0.3 g/t Au. Preliminary open pit shells were used to constrain the resources.
The Tucano database consists of 86 diamond holes (DH), 78 reverse circulation (RC) holes, 6 combined RC/DH holes and 221 auger drill holes in addition to 70 surface channels and 32 underground channels.
The Arara database consists of 64 diamond drill holes, 101 auger drill holes, and 8 surface channels.
The Coruja database consists of 33 diamond drill holes, 14 RC holes, 2 combined RC/DH holes, 166 auger drill holes, and 86 surface channels.
High assays were capped at 30 g/t Au at Tucano and 10 g/t Au at Arara and Coruja.
Tucano, Arara and Coruja block dimensions: 10 m E x 10 m N x 5 m high.
Mineral Resources are estimated using a gold price of US$1,238 per ounce.
Bulk densities used were 2.70 t/m3 to 2.75 t/m3 in rock, 2.17 t/m3 to 2.40 t/m3 in the transition zone, and 1.72 t/m3 to 1.89 t/m3 in saprolite.
Numbers may not add due to rounding.
Mineral Resource estimates may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other factors.

Luna's President & CEO, John Blake, comments, "This initial resource estimate is a significant milestone at Cachoeira, with ample scope to increase the resource Cachoeira is now a new stand-alone project, a solid platform in the development of Cachoeira into mine production. This resource estimate provides Luna Gold with additional value at low cost.

Whittle pit shells were used to constrain all mineral resources and significant mineralization extends beyond the pit constraints, particularly at Arara where 50% of mineralization lies outside the Whittle pit shell, and Coruja where 68% of mineralization lies outside the Whittle pit shell. At Tucano 17% of mineralization is located outside of the Whittle pit shell. While this mineralization cannot currently be considered a resource it demonstrates that strong potential exists to increase the Cachoeira mineral resources."

The Scott Wilson RPA Qualified Person under NI 43-101 is Patti Nakai-Lajoie, P.Geo., who has reviewed and approved this news release as it applies to the mineral resource estimate.

Luna's VP Exploration, Titus Haggan, states, "The Cachoeira exploration team has made excellent progress in 2010 and we are finalizing our 2011 work programs and budgets with the objective of aggressively advancing Cachoeira. Field teams are currently auger drilling newly defined regional gold targets within the Cachoeira Shear Zone and assay results will be reported as they are received. Socio-economic diagnostic studies have been commissioned and we will be assigning key personnel to the project in early 2011."

Geology & Mineralization
Cachoeira is an advanced stage gold project in northeast Pará state, Brazil. Orogenic gold mineralization occurs within a 5 km long north trending shear zone. Three deposits, Tucano, Coruja and Arara, have been defined to date. The Tucano deposit is located within the Cachoeira town urban limit.

Earn-In Terms
In October 2007, as amended in December 2008, January 2010 and August 2010, the Company entered into an agreement to acquire a 100% interest in the Cachoeira project from a consortium (the "Vendors"). To acquire the interest, the Company paid the Vendors 0.5 million BRL (US$0.3 million), committed to incur exploration and eventual project feasibility and development expenditures of approximately 9.5 million BRL (US$5.5 million) by December 2011, and to provide a royalty of 4% of net profits interest. The Company has the right to buy-back 2% of the net profits interest for a payment of US$4.0 million any time prior to the first anniversary of commercial gold production. Commercial production must commence by October 2012 or the Company will pay a fine of $0.2 million each year on a monthly pro rata basis, in lieu of the operating royalty until commercial production is achieved.

At September 30, 2010, Luna had incurred accumulated exploration expenditures of 6.24 million BRL as part of the Company's agreement with the vendors to incur exploration expenditures of 9.5 million BRL. The Company has presented a NI 43-101 compliant resource estimate to the Vendors and satisfied this contractual obligation.

CORPORATE UPDATE
Luna Gold Corp. is pleased to announce that further to its release of December 14, 2010, it has uploaded 3 cross sections from its ongoing resource drill program at the Piaba gold deposit, Aurizona to its website at www.lunagold.com or to view cross sections directly click below:

Section 000
Section 200W
Section 400W

Luna's President & CEO, John Blake, commented, "The sections now displayed on our website relate to the recent results of 7 drill holes at the Piaba deposit. The holes were drilled on sections 000, 200W and 400W and demonstrate continuous mineralisation along 400m strike length to a depth of -300m RL. Drilling continues at Piaba to define further mineralization within the 3 km long orogenic gold deposit and we are confident that we can deliver a significant increase in resources. To provide context, the current Aurizona 2010 FS pit at its deepest point is RL -- 136m. Assay results are expected in late January from trenching and auger drilling programs ongoing at the exploration targets at Aurizona which are located in close proximity to the Aurizona Plant currently in commissioning."

About Luna Gold Corp
Luna is a gold mining and exploration company engaged in the exploration and development of gold deposits and advanced stage gold exploration projects in Brazil. The Company is currently commissioning its Aurizona gold mine in Maranhão, Brazil.