Sandstorm Gold Ltd. (CVE:SSL) had their share price jumping after the company provided an update for Luna Gold Corp. (CVE:LGC) (PINK:LGCUF).
SSL had a serious breakout this morning but the move lost momentum during the day. The fade buying pressure can possibly related to the deferred impact of the developments described in the press release. The trading volume was twice the average of 1.14 million after only couple of hours into Tuesday’s trading session indicating that a lot of people are watching, but few believe the stock could sustain a short term.
The commotion among traders was caused by the company’s operational update for Aurizona Mine, which is actually 100% owned by Luna Gold Corp.
According to the report, Luna has successfully upgraded their SAG mill and made other important plant modification in May and June this year. They are ready to ramp up production to feasibility levels and hope to reach their targets in 3rd quarter of 2011. Luna should have stable production in Q4, which should directly benefit Sandstorm. Luna will provide a further resource update in the fourth quarter.
Sandstorm has invested a significant amount of capital in Luna ($17.8 million along with 5.5 million shares of SLL) for a right to purchase 17% of gold produced over the lifetime of the mine at $400 per ounce or less, depending on the market price of gold.
