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Luna Gold, JDL Gold complete merger to create Trek Mining

Luna Gold Corp. and JDL Gold Corp. completed their merger to create Trek Mining Inc., which holds the Aurizona gold project in Brazil as its main asset.

The companies raised C$83.4 million via a private placement financing as part of the deal, which was originally expected to close late March, and now Trek holds about C$113 million in cash.

The private placement, originally targeting C$27 million, was increased to between C$60 million and C$65 million in late February. Meanwhile, the underwriters of the C$15 million bought-deal private placement exercised the C$5 million overallotment option in full, for total proceeds of C$20 million.

An ongoing feasibility study at the project will soon be completed and first gold pour is targeted for year-end 2018, one of Luna's largest shareholders, Sandstorm Gold Ltd., said in an April 5 statement.

Sandstorm said it secured a 15.77% stake in Trek as part of the placement and can increase it to 19.86% by exercising all of its warrants in Trek. Sandstorm holds a 3% to 5% sliding scale net smelter returns royalty on Aurizona.