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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-QSB



|[X]   | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period endedJune 30, 2004
|----- | -----------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                              
|      | OR                                                                                                                           
|      |                                                                                                                              
|[   ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT                                                              
|      | For the transition period from __________ to ___________                                                                     

Commission file number 333-41516

LUNA GOLD CORP.



|Wyoming                                                        |  | 98-0226032                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

Suite 1600 - 777 Dunsmuir Street 
PO BOX 10425 
Vancouver, British Columbia 
Canada V7Y 1K4
(Address of principal executive offices)

(604) 687-9931
(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]   No [   ]

Shares outstanding as at August 12, 2004:  16,954,863

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PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements.

The Company's financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

LUNA GOLD CORP.
INTERIM FINANCIAL STATEMENTS



|                               | Page                                                     
|------------------------------ | ---------------------------------------------------------
|                               |                                                          
|PART I - FINANCIAL INFORMATION |                                                          
|Item 1.                        | Consolidated Balance Sheets                              
|                               | Consolidated Statements of Operations                    
|                               | Consolidated Statements of Stockholders' Deficiency      
|                               | Consolidated Statements of Cash Flows                    
|                               | Notes to Financial Statements                            
|Item 2.                        | Management's Discussion and Analysis or Plan of Operation
|Item 3.                        | Controls and Procedures                                  
|                               |                                                          
|PART II - OTHER INFORMATION    |                                                          
|Item 6.                        | Exhibits and Reports on Form 8-K                         

















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LUNA GOLD CORP.
(Expressed in United States dollars)

Consolidated Balance Sheets



|                                                                                                                                                |   | June 30, 2004
(unaudited) |   | December 31, 
2003
|----------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------- | - | ------------------
|                                                                                                                                                |   |                           |   |                   
|Assets                                                                                                                                          |   |                           |   |                   
|                                                                                                                                                |   |                           |   |                   
|Current assets:                                                                                                                                 |   |                           |   |                   
|Cash and cash equivalents                                                                                                                       | $ | 60,835                    | $ | 11,483            
|Amounts receivable                                                                                                                              |   | 3,573                     |   | 1,919             
|Prepaid expenses                                                                                                                                |   | 7,567                     |   | 11,507            
|                                                                                                                                                |   |                           |   |                   
|Total current assets                                                                                                                            |   | 71,975                    |   | 24,909            
|                                                                                                                                                |   |                           |   |                   
|                                                                                                                                                |   |                           |   |                   
|Equipment                                                                                                                                       |   | 4,633                     |   | 3,008             
|                                                                                                                                                |   |                           |   |                   
|Total assets                                                                                                                                    | $ | 76,608                    | $ | 27,917            
|Liabilities and stockholders' deficiency                                                                                                        |   |                           |   |                   
|Current liabilities:                                                                                                                            |   |                           |   |                   
|Accounts payable and accrued liabilities                                                                                                        | $ | 77,482                    | $ | 18,715            
|Payables to related parties (note 5)                                                                                                            |   | 65,420                    |   | 46,218            
|                                                                                                                                                |   |                           |   |                   
|Total current liabilities                                                                                                                       |   | 142,902                   |   | 64,933            
|                                                                                                                                                |   |                           |   |                   
|Stockholders' equity (deficiency):                                                                                                              |   |                           |   |                   
|Common stock, no par value, unlimited authorized shares; issued 16,894,446 at June 30, 2004, 2004, and 12,441,946 at December 31, 2003 (note 4) |   | 5,606,195                 |   | 5,068,305         
|Additional paid-in capital                                                                                                                      |   | 182,746                   |   | 182,746           
|Deficit before inception of new business (note 1)                                                                                               |   | (4,796,115)               |   | (4,796,115)       
|Deficit accumulated since inception of new business (note1)                                                                                     |   | (1,036,863)               |   | (466,688)         
|Accumulated other comprehensive income:                                                                                                         |   |                           |   |                   
|Cumulative translation adjustment                                                                                                               |   | (22,258)                  |   | (25,264)          
|                                                                                                                                                |   |                           |   |                   
|Total stockholder's deficiency                                                                                                                  |   | (66,294)                  |   | (37,016)          
|                                                                                                                                                |   |                           |   |                   
|Total liabilities and stockholders' equity (deficiency)                                                                                         | $ | 76,608                    | $ | 27,917            

The accompanying notes are an integral part of these financial statements

Approved on behalf of the Board:



|/s/ Tim Searcy       | /s/ Marcel de Groot      
|-------------------- | -------------------------
|                     |                          
|Tim Searcy, Director | Marcel de Groot, Director





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LUNA GOLD CORP.
(Expressed in United States dollars)
(Unaudited - Prepared by Management)

Consolidated Statements of Operations



|                                            |   |                          |   |                  |   | Period from  
|------------------------------------------- | - | ------------------------ | - | ---------------- | - | -------------
|                                            |   |                          |   |                  |   | January 20/03
|                                            |   |                          |   |                  |   | (inception of
|                                            |   |                          |   |                  |   | new          
|                                            |   | Three month period ended |   | Six month period |   | business) to 
|                                            |   | June 30,                 |   | ended June 30,   |   | June 30, 2004
|                                            |   | 2004                     |   | 2003             |   | 2004         
|                                            |   |                          |   |                  |   |              
|                                            |   |                          |   |                  |   |              
|Operating expenses:                         |   |                          |   |                  |   |              
|                                            |   |                          |   |                  |   |              
|Depreciation and amortization               | $ | 282                      | $ | 375              | $ | 576          
|Consulting fees (note 5)                    |   | 92,851                   |   | 11,764           |   | 106,973      
|Marketing and promotion                     |   | 1,814                    |   | 2,950            |   | 1,814        
|Exploration expense                         |   | 15,542                   |   | 52,813           |   | 90,757       
|Filing fees                                 |   | 4,994                    |   | 10,956           |   | 7,648        
|General and administrative                  |   | 17,435                   |   | 11,424           |   | 19,946       
|Investor relations                          |   | 8,220                    |   | --               |   | 8,220        
|Management fees to related parties (note 5) |   | 5,456                    |   | 5,373            |   | 11,145       
|Organization expense                        |   | 153,379                  |   |                  |   | 153,379      
|Professional fees                           |   | 45,498                   |   | 32,161           |   | 61,363       
|Rent                                        |   | 7,651                    |   | 6,448            |   | 14,478       
|Travel and conference                       |   | 88,295                   |   | --               |   | 88,295       
|                                            |   |                          |   |                  |   |              
|Total Expenses                              |   | 441,417                  |   | 134,264          |   | 564,594      
|                                            |   |                          |   |                  |   |              
|Loss from operations                        |   | (441,417)                |   | (134,264)        |   | (564,594)    
|Foreign exchange gain (loss)                |   | (2,893)                  |   | --               |   | (5,582)      
|Interest income (expense), net              |   | --                       |   | --               |   | --           
|Net loss for the period                     | $ | (444,310)                | $ | (134,264)        | $ | (570,176)    
|                                            |   |                          |   |                  |   |              
|Loss per common share, basic and            |   |                          |   |                  |   |              
|diluted                                     | $ | (0.04)                   | $ | (0.01)           | $ | (0.05)       
|                                            |   |                          |   |                  |   |              
|Weighted average number of                  |   |                          |   |                  |   |              
|common shares outstanding:  basic           |   |                          |   |                  |   |              
|and diluted                                 |   | 12,555,829               |   | 10,141,946       |   | 12,555,829   









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LUNA GOLD CORP.
(Expressed in United States dollars)
(Unaudited - Prepared by Management)
Consolidated Statements of Stockholders' Equity (Deficiency)



|                                                           |               |            | Deficit accumulated
|---------------------------------------------------------- | ------------- | ---------- | -------------------
|                                                           |               |            | Prior to           
|                                                           |               | Additional | Inception          
|                                                           | Common Shares | Paid-In    | of New             
|                                                           | Shares        | Amount     | Capital            
|                                                           |               |            |                    
|Balance, December 31, 2002                                 | 10,141,946    | $          | 4,608,305          
|                                                           |               |            |                    
|Loss for the period                                        | --            |            | --                 
|Issuance of common stock on private placement              |               |            |                    
|(August 8, 2003)                                           | 2,250,000     |            | 450,000            
|                                                           |               |            |                    
|Issuance of common stock for exploration (August 8, 2003)  | 50,000        |            | 10,000             
|                                                           |               |            |                    
|Adjustment to cumulative translation account               | --            |            | --                 
|                                                           |               |            |                    
|Balance, December 31, 2003                                 | 12,441,946    | $          | 5,068,305          
|                                                           |               |            |                    
|Loss for the period                                        |               |            | --                 
|Issuance of common stock on exercise of warrants issued on |               |            |                    
|August 8, 2003 private placement (Note 5)                  | 77,500        |            | 19,375             
|Issuance of common stock on exercise of warrants on June   |               |            |                    
|30, 2004                                                   | 4,375,000     |            | 518,515            
|                                                           |               |            |                    
|Adjustment to cumulative translation account               | --            |            | --                 
|                                                           |               |            |                    
|Balance, June 30, 2004                                     | 16,894,446    | $          | 5,606,195          



|                                                        | Deficit         |             |               |              
|------------------------------------------------------- | --------------- | ----------- | ------------- | -------------
|                                                        | Accumulated     |             | Total         |              
|                                                        | Since Inception | Cumulative  | Stockholders= | Comprehensive
|                                                        | of New          | Translation | Equity        | Income       
|                                                        | Business        | Adjustment  | (Deficiency)  | (loss)       
|                                                       
|                                                        |                 |             |               |              
|Balance, December 31, 2002                              | $               | --          | $             | (21,563)     
|                                                        |                 |             |               |              
|Loss for the period                                     |                 | (466,688)   |               | --           
|Issuance of common stock on private placement           |                 |             |               |              
|(August 8, 2003)                                        |                 | --          |               | --           
|Issuance of common stock for exploration                |                 |             |               |              
|(August 8, 2003)                                        |                 | --          |               | --           
|                                                        |                 |             |               |              
|Adjustment to cumulative translation account            |                 | --          |               | (3,701)      
|Balance, December 31, 2003                              | $               | (466,688)   | $             | (25,264)     
|                                                        |                 |             |               |              
|Loss for the period                                     |                 | (570,176)   |               | --           
|Issuance of common stock on exercise of warrants issued |                 |             |               |              
|on August 8, 2003 private placement (Note 5)            |                 |             |               |              
|Issuance of common stock on exercise of warrants on     |                 |             |               |              
|June 30, 2004                                           |                 |             |               |              
|                                                        |                 |             |               |              
|Adjustment to cumulative translation account            |                 | --          |               | 3,007        
|                                                        |                 |             |               |              
|Balance, June 30, 2004                                  | $               | (1,036,863) | $             | (22,257)     

See accompanying notes to financial statements.

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LUNA GOLD CORP.



|                                                 |   |                          |   |                  | Period from      
|------------------------------------------------ | - | ------------------------ | - | ---------------- | -----------------
|                                                 |   |                          |   |                  | Jan. 20, 2003    
|                                                 |   |                          |   |                  | (inception of new
|                                                 |   | Three Month period ended |   | Six Month period | business) to     
|                                                 |   | June 30,                 |   | ended June 30,   | June 31,         
|                                                 |   |                          |   |                  |                  
|                                                 |   | 2004                     |   | 2003             |                  
|Cash flow from operating activities:             |   |                          |   |                  |                  
|Net loss                                         | $ | (444,310)                | $ | (134,264)        | $                
|Items not affecting cash:                        |   |                          |   |                  |                  
|Depreciation and amortization                    |   | 282                      |   | 375              |                  
|Issuance of shares for exploration               |   |                          |   |                  |                  
|                                                 |   |                          |   |                  |                  
|Changes in operating assets and liabilities:     |   |                          |   |                  |                  
|Amounts receivable                               |   | 35                       |   | (1,127)          |                  
|Prepaid expenses                                 |   | (4,448)                  |   | --               |                  
|Accounts payable and accrued liabilities         |   | 17,067                   |   | 202              |                  
|                                                 |   |                          |   |                  |                  
|Net cash used in operating activities            |   | (431,374)                |   | (134,814)        |                  
|                                                
|Cash flow from investing activities:             |   |                          |   |                  |                  
|Purchase/Disposal of equipment                   |   | (1,630)                  |   |                  |                  
|Accounts payable to related parties              |   | --                       |   | 21,364           |                  
|                                                 |   |                          |   |                  |                  
|Net cash used in investing activities            |   | (1,630)                  |   |                  |                  
|                                                
|Cash flow from financing activities:             |   |                          |   |                  |                  
|Proceeds from issuance of shares for cash        |   |                          |   |                  |                  
|Proceeds from exercise of warrants issued        |   |                          |   |                  |                  
|on August. 8, 2003 private placement (Note 5)    |   | 19,375                   |   |                  |                  
|Proceeds from exercise of warrants on            |   |                          |   |                  |                  
|June 30, 2004                                    |   | 518,515                  |   |                  |                  
|Notes payable to related parties                 |   | (69,285)                 |   | 12,945           |                  
|Payable to related parties                       |   | 19,202                   |   | 41,449           |                  
|Proceeds from subscriptions received in advance  |   |                          |   |                  |                  
|of share offering                                |   | --                       |   | 98,268           |                  
|                                                 |   |                          |   |                  |                  
|Net cash provided by financing activities        | $ | 487,807                  | $ | 152,662          | $                
|                                                
|                                                 |   |                          |   |                  |                  
|Increase (decrease) in cash and cash equivalents |   | 54,804                   |   | 90,676           |                  
|Effect of exchange rate changes on foreign       |   |                          |   |                  |                  
|currency denominated cash balances               |   | 2,524                    |   | (15,826)         |                  
|                                                 |   |                          |   |                  |                  
|Cash and cash equivalents, beg. of period        |   | 3,507                    |   | 121,475          |                  
|                                                 |   |                          |   |                  |                  
|Cash and cash equivalents, end of period         | $ | 60,835                   | $ | 196,325          | $                
|                                                 |   |                          |   |                  |                  
|Supplemental disclosure:                         |   |                          |   |                  |                  
|                                                 |   |                          |   |                  |                  
|Interest paid (received) net                     |   | --                       |   | --               |                  
|Issuance for common stock for debt               |   |                          |   |                  |                  





The accompanying notes are an integral part of these financial statements

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|LUNA GOLD CORP.                                                           
|--------------------------------------------------------------------------
|Consolidated Notes to Financial Statements                                
|(Expressed in United States dollars)                                      
|(Unaudited - Prepared by Management)                                      
|                                                                          
|Six-month period ended June 30, 2004 and 2003                             
|Period from January 20, 2003 (inception of new business) to March 31, 2004
|                                                                          

1. Nature of Operations:
2. Significant Accounting Policies:



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1. Significant Accounting Policies (Cont'd):





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1. Significant Accounting Policies (Cont'd):
2. Mining Property Interests





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1. Mining Property Interests (Cont'd):









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1. Mining Property Interests (Cont'd):
2. Stockholders'  Equity:





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1. Stockholders' Equity (Cont'd):









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1. Stockholders' Equity (Cont'd):
2. Related Party Transactions:
3. Financial Instruments and Risk Management:







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1. Financial Instruments and Risk Management (Cont'd):
2. Canadian Generally Accepted Accounting Principles:





















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ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements

This quarterly report contains certain forward-looking statements.  Much of the information included in this report includes or is based upon estimates, projections or other "forward looking statements".  Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, prediction, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements."

The following discussion should be read in conjunction with our historical Financial Statements and contained herein.

Critical Accounting Policies

Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an ongoing basis, management re-evaluates its estimates and judgments.

The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.  Certain conditions, discussed below, currently exists which raise substantial doubt upon the validity of this assumption.  The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations or income from its investments.  As of June 30, 2004, we have not generated revenues, and have experienced negative cash flow from operations.  We may look to secure additional funds through future debt or equity financings.  Such financings may not be available or may not be available on reasonable terms.









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Overview

Our financial statements contained in this quarterly report have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business.  We incurred net losses from operations for the period ended June 30, 2004, for the period ended June 30, 2003 and for the period from the inception of our mining business as of January 20, 2003, to June 30, 2004 of $570,176, $134,264 and $1,036,863, respectively.  The loss increased over the prior year period due to higher administration and exploration expenses during the period as the Company performed due diligence on, and optioned, several new properties during the period and expand its focus to China.  We did not earn any revenue during the period ended June 30, 2004 and the year ended December 31, 2003.

During the quarter, we signed option agreements on two additional properties and performed further analysis work on the Blue Mountain project.  The analysis work was focused on identifying high grade targets.  We signed options agreements to acquire two properties, Gongguo and Dongchuan, in the Yunnan Province of the People's Republic of China (PRC).  The Gongguo and Dongchuan projects as well as the LS and NBM properties optioned during the first quarter located in the state of Nevada are described below.  Further details of the LS and NBM properties can be found in the MD&A for the year ended December 31, 2003.

Dongchuan Project

On June 2, 2004, we entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. ("YNMG") pursuant to which we together agreed to establish a Sino-Foreign co-operative joint venture company in the Yunnan Province, PRC. The joint venture company will be called the Xinan Mineral Resources Co. Ltd.  It will be established for the purpose of jointly exploring and, if successful, mining any viable deposits discovered in the Dongchuan area of the Yunnan, Province, PRC.

Pursuant to the terms of the co-operative agreement, we agreed to invest, at our option, a total of US$3.1 million over three years to earn a 70% interest in the co-operative company.  After we have earned a 70% interest, at our option, we may earn a further 20 % interest in the co-operative company by investing an additional US$6 million.

If we elect to terminate the co-operative agreement at any time, all unexpended amounts that we may have paid to the co-operative company will be returned to us and all rights to the property will be returned to YNMG.

The schedule of payments is as follows; beginning from the date the joint venture company is successfully incorporated:



|Due Date             |   | Investment
|-------------------- | - | ----------
|By Yr. 1 Anniversary | $ | 540,000   
|By Yr. 2 Anniversary |   | 1,000,000 
|By Yr. 3 Anniversary |   | 1,510,000 
|Total                | $ | 3,050,000 





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Gongguo Project

On May 18, 2004 we entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. ("YNMG") pursuant to which we together agreed to establish a Sino-Foreign co-operative joint venture company in Yunnan Province, PRC.

The joint venture company will be called the Xinlong Mineral Resources Co. Ltd.  It will be established for the purpose of jointly exploring and, if successful, mining any viable deposits discovered in the Gongguo area of the Yunnan, Province, PRC.

Pursuant to the terms of the co-operative agreement, we have agreed to invest, at our option, a total of US$3.05 million over three years to earn an 80% interest in the co-operative company.  After we have has earned its 80% interest, contributions to the co-operative company will be made pro rata, provided that YNMG's interest can be diluted to not less than 10% if it elects not to make cash contributions.

If we elect to terminate the co-operative agreement at any time, all unexpended amounts that we may have paid to the co-operative company will be returned to us and all rights to the property will be returned to YNMG.

The schedule of payments, beginning from the date the joint venture company is successfully established, is as follows:



|Due Date             | Investment
|-------------------- | ----------
|By Yr. 1 Anniversary | $         
|By Yr. 2 Anniversary |           
|By Yr. 3 Anniversary |           
|Total:               | $         

LS Property Option

We acquired an option on the LS Property and have the right to acquire a 100% interest in these 80 mineral claims located in Lander County, Nevada, subject to a retained 3% net smelter royalty.  We made an initial $5,000 payment upon execution of the agreement on March 20, 2004 and would at our option, make further cash payments totalling $1,400,000 over a 15 year period.  Additionally, we are required to carry out a minimum year-one work program of $10,000 and must complete a total work program of $1,400,000 over the 15 year option period.

NBM Property Option

In February we acquired an option on the NBM Property and have the right to acquire a 100% interest in these 36 mineral claims located in Lander County, Nevada, subject to a retained 3% net smelter royalty.  We made an initial $5,000 payment upon execution of the agreement dated March 20, 2004, and would at our option, make further cash payments totalling $1,400,000 over a 15 year period.  Additionally, we are required to carry out a minimum year-one work program of $10,000 and must complete a total work program of $1,400,000 over the 15 year option period.





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New Directors

During May 2004, Mr. Kit Lee joined the Board of Directors of Luna.   Kit worked at Placer Dome Inc. from 1970 to 1987, as a Senior Geologist in charge of project generation in South East Asia, and has extensive experience in the South East Asia Basin including Papua New Guinea, Malaysia, Australia, Cambodia and China.  He was part of the team that led to Placer's success in developing the Kidston Gold Mine, Porgera Gold Mine and Misima Gold Mine.

In 1987, Kit joined Niugini Mining Ltd. as Exploration Manager Asia and Manager Ore Reserves where he led the team to the discovery for a new gold belt at Loei, Thailand, including a deposit of 5 million tons at 3.5 gpt Au and 0.5% Cu.   He also successfully completed the acquisition of the Red Dome Gold Copper Mine in Australia and recognized the potential to double the open pitable reserves from 3 million tons to 7 million tons at 3 gpt Au and 1% Cu.

From 1994 to 2000, Kit was the President of Zen International Resources Ltd., which he founded with a mandate to investigate mining opportunities in China.   During his tenure at Zen, Kit identified a package of very attractive gold and copper projects in China.   Zen obtained full governmental approvals for the first Sino-Foreign Joint Venture for the Zijinshan gold copper project located in the Fujian Province.

Prior to joining Luna, Kit has provided consulting services for projects in Cambodia, Australia, and Malaysia.

In June 2004, Mr. Tim Searcy has been appointed president and chief executive officer.  Tim worked in the corporate offices of Placer Dome where he held positions in Treasury, and more recently Corporate Development (M&A).  Before joining Placer Dome, Tim worked as an exploration geologist in Canada and Asia.  As an exploration geologist, Tim worked with Falconbridge and BHP, as well as a number of junior companies.

Our Financial Statements included in this quarterly report have been prepared without any adjustments that would be necessary if we become unable to continue as a going concern and are therefore required to realize upon our assets and discharge our liabilities in other than the normal course of operations.

Our Proposed Exploration Program

We must conduct exploration to determine what amounts of minerals exist on our properties and if such minerals can be economically extracted and profitably processed.

Our exploration program is designed to efficiently explore and evaluate our properties.

We do not claim to have any mineral reserves whatsoever at this time on our properties.

Our anticipated exploration costs for our respective properties, over the next twelve months are as follows:





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|Blue Mountain Project | $ | 176,000
|--------------------- | - | -------
|Gongguo Project       |   | 200,000
|Dongchuan Project     |   | 112,000
|                      | $ | 478,000

In addition to work performed on the properties mentioned above, we intend to conduct exploration activity on the LS and NBM properties.  Each property will require $10,000 on exploration activity within the first anniversary of each of the agreements by March 20, 2005.  All exploration work will be dependent upon our ability to successfully complete our public offering or have a sufficient amount of warrants exercised.

Government Regulation

Mining operations and exploration activities are subject to various national, state, and local laws and regulations in the United States, which govern prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.  We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the United States.

Environmental Regulation

Our mining operations and exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment.  These laws are continually changing and, as a general matter, are becoming more restrictive.  Our policy is to conduct business in a way that safeguards public health and the environment.  We believe that our operations are conducted in material compliance with applicable laws and regulations.

Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs.  Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain mining operations uneconomic.

Competition

We compete with other mining companies in connection with the acquisition of gold and other precious metals properties.  There is competition for the limited number of gold acquisition opportunities, some of which is with other companies having substantially greater financial resources than we do.  As a result, we may have difficulty acquiring attractive gold mining/exploration properties.

We believe no single company has sufficient market power to affect the price or supply of gold in the world market.







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Results of Operations

We have included in this quarterly report financial statements for the three and six month periods ended June 30, 2004 and 2003 and the period from January 20, 2003 (being the date of inception of our new business) to March 31, 2004.

Three-month period ended June 30, 2004

We incurred a net loss of $444,310 (2003: $134,264) for the quarter ended June 30, 2004, resulting in a loss per share of $0.04 (2003: $0.01).  The loss was attributable to operating expense of $441,417 (2003: $134,264), interest expense of $2 (2003: nil) and foreign exchange loss of $2,891 (2003: nil).

During the quarter we incurred $282 (2003: $375) in depreciation and amortization, $92,851 (2003: $11,764) in consulting fees, $15,542 (2003: $52,813) in exploration expense, $4,994 (2003: $10,956) in filing fees, $17,435 (2003: $11,424) in general and administrative expenses, $5,456 (2003: $5,373) in management fees, $153,379 (2003: nil) in organization expense, $45,498 (2003: $32,161) in professional fees, $7,651 (2003: $6,448) in rent, and $88,295 (2003: nil) in travel and conference.

Expenses increased as we refocus our efforts to the China properties.  Consulting fees increased as we retained the service of director Kit Lee.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China.  Kit will be assisting us on property generation as well as exploration.  Exploration expense decreased as we focused our effort on acquiring the China properties.  The majority of the exploration expense relates to work performed on the Blue Mountain Property.  This work included mapping, sampling, data compilation and claims fees.  Exploration expense also includes costs related to area reconnaissance work.  The exploration expenses related to Blue Mountain was as follows: $10,674 in geologist fees, $1,264 in graphics supplies and analysis, and $4,199 in travel and transportation.  General and administrative expense increased due to increased activities associated with acquiring new properties in China.  Management fees were constant as the monthly charge is approximately $1,675 per month.  Organization expense relates to funds advanced to China to pay for costs associated with acquiring the necessary approvals for the joint-venture agreements and the creation of the new joint venture companies.  These advances will count towards the investment required to earn Luna's interest in the Chinese properties.  Professional fees increased as we incurred legal fees to draft the agreements in China and also to file an SB-2 registration statement with the SEC.  Travel fees increased as several directors spent time travelling in China during the quarter and we reimbursed Kit for travel expenses in China retro-active to November 2003 as this is when Kit first travelled to China to acquire properties.

Three- month period ended June 30, 2003

We incurred a net loss of $134,264 for the six-month period ended June 30, 2003, resulting in a loss per share of $0.01.  The loss was attributable to operating expenses of $134,264.

During the period we incurred $375 in depreciation and amortization, $11,764 in consulting fees, $52,813 in exploration expense, $10,956 in filing fees, $11,424 in general and administrative expenses, $5,373 in management fees, $32,161 in professional fees and $6,448 in rent.





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Expenses increased over the prior year period due to the increased activities as we enter the mining business.  Professional fees increased due to increased filing and reporting activities.  Management fees decreased due to a reduction in the monthly charge to approximately $1,675 per month.  Consulting expense increased as we contracted geologists, including a director, to perform certain exploration activities.  Exploration expense consists of monies spent on the due diligence of several prospective exploration properties including the Blue Mountain property

Six-month period ended June 30, 2004

We incurred a net loss of $570,176 (2003: $202,321) for the six-month period ended June 30, 2004, resulting in a loss per share of $0.05 (2003: $0.02).  The loss was attributable to operating expenses of $564,564 (2003: $202,321), and foreign exchange loss of $5,582 (2003: nil).

During the period we incurred $576 (2003: 721) in depreciation and amortization, $106,973 (2003: 28,292) in consulting fees, $90,757 (2003: 64,523) in exploration expense, $7,648 (2003: 14,682) in filing fees, $19,946 (2003: 18,495) in general and administrative expenses, $11,145 (2003: 10,339) in management fees, and $61,363 (2003: 49,912) in professional fees, $14,478 (2003: $12,407) in rent,  $153,379 (2003: nil) in organization expense and $88,295 (2003: nil) in travel and conference.

Expenses increased over the prior year period due to the increased activities as we enter the mining business.  Consulting fees increased as we contracted several geologists, including a director, to perform certain exploration activities.  We also retained the services of director Kit Lee.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China.  Kit will be focused on property generation as well as assisting in exploration.  The majority of the exploration expense related to work performed on our Blue Mountain Property.  This work included mapping, sampling, data compilation and claims fees.  Also included in exploration expense are staking fees on the NBM and LS Properties (see our 2003 10KSB for further information on the properties), which were acquired during the six-month period ended June 30, 2004.  Exploration expense also includes costs related to area reconnaissance work.  The exploration expenses related to Blue Mountain was as follows: $49,594 in geologist fees, $3,784 in graphics supplies and analysis, and $9,005 in travel and transportation.  We also spent $10,623 and $18,336 in staking fees on NBM and LS claims respectively.  Management fees were constant as the monthly charge is approximately $1,675 per month.  Organization expense relates to funds sent to China to pay for costs associated with acquiring the necessary approvals for the Chinese agreements and the creation of the new joint venture companies.  These payments will count towards the spending required to earn Luna's interest in the Chinese properties.  Professional fees increased as we incurred legal fees in preparing an SB-2 registration statement, as well as to draft the joint-venture agreements in China.  Travel fees increased as several directors spent time travelling during the quarter and we agreed to reimburse Kit for travel expenses in China retro-active to November 2003 as this is when Kit first travelled to China to acquire properties.









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Six-month period ended June 30, 2003

We incurred a net loss of $202,321 for the six-month period ended June 30, 2003, resulting in a loss per share of $0.02.  The loss was attributable to operating expenses of $202,321.

During the period we incurred consulting fees of $28,292 and $721 in depreciation and amortization, $12,407 in rent, 2,950 in marketing and promotion, $14,682 in filing fees, $10,339 in management fees, $18,495 in general and administrative expenses $64,523 in exploration expense and $49,912 in professional fees.

Expenses increased over the prior year period due to the increased activities as we enter the mining business.  We spent $64,523 on exploration activity compared to nil in the previous year's period.  Professional fees increased due to increased filing and reporting activities due to our entering the mining business.  Fees also increased due to our legal work involved in preparing a SB-2 registration statement.  Management fees decreased due to a reduction in the monthly charge to approximately $1,675 per month.  Consulting expense increased due as we contracted geologists, including a director of the company, to perform certain exploration activities.  Exploration expense consists of monies spent on the due diligence of several prospective exploration properties including the Blue Mountain property.

Period of inception of the mining business, January 20, 2003 to June 30, 2004

We incurred a net loss of $1,036,863 for the period of inception to June 30, 2004, resulting in a loss per share of $0.09.  The loss was attributable to operating expenses of $1,026,162 and foreign exchange loss of $10,701.

During the period we incurred $1761 in depreciation and amortization, $177,398 in consulting fees, $293,674 in exploration expense, $28,785 in filing fees, $51,141 in general and administrative expenses, $31,616 in management fees, $153,379 in organization expense, $142,057 in professional fees and $39,044 in rent.

Expenses increased over the prior year period due to the increased activities as we enter the mining business.  Consulting fees increased as we contracted several geologists, including a director, to perform certain exploration activities.  We also retained the services of director Kit Lee.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China.  Kit will be focused on property generation as well as assisting in exploration.  The majority of the exploration expense related to work performed on our Blue Mountain Property.  This work included mapping, sampling, data compilation and claims fees.  Also included in exploration expense are staking fees on the NBM and LS Properties (see our 2003 10KSB for further information on the properties), which were acquired during the six-month period ended June 30, 2004.  Exploration expense also includes costs related to area reconnaissance work.  The exploration expenses related to Blue Mountain was as follows:  $78,705 in geologist fees, $37,031 in graphics supplies and analysis, and $24,463 in travel and transportation.  We also spent $10,623 and $18,336 in staking fees on NBM and LS claims respectively.  General and Administrative expense increase as supporting activities increased including office and communication expense.  Management fees were constant as the monthly charge is approximately $1,675 per month.  Organization expense relates to funds sent to China to pay for costs associated with acquiring the necessary approvals for



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the Chinese agreements and the creation of the new joint venture companies.  These payments will count towards the spending required to earn Luna's interest in the Chinese properties.  Professional fees increased as we incurred legal fees in preparing a SB-2 registration statement, as well as to draft the joint-venture agreements in China and also to file an SB-2 registration statement with the SEC.  Travel fees increased as several directors spent time travelling during the quarter and we agreed to reimburse Kit for travel expenses in China retro-active to November 2003 as this is when Kit first travelled to China to acquire properties.

Balance Sheets

Total cash and cash equivalents as at June 30, 2004 and December 31, 2003, were respectively, $60,835 and $11,483.  Working capital as at June 30, 2004, and December 31, 2003, were respectively, $(70,927) and $(40,024).

The decrease in working capital between June 30, 2004 and December 31, 2003 was attributable to operating expenses of $125,839, and an interest expense of $28.  No revenue was generated during the period.

Total share capital as at June 30, 2004 and December 31, 2003, was respectively, $5,606,195 and $5,068,305.  Total shares outstanding as at June 30, and December 31, 2003, was respectively, 16,894,446 and 12,441,946.

Current Capital Resources and Liquidity

Our capital resources have been limited.  We currently do not, and will not, generate revenue for business operations, and to date have relied on the sale of equity and related party loans for cash required for our operations.  There can be no assurances that any outstanding share purchase warrants will be exercised.

We have filed an SB-2 registration statement and are attempting to raise up to $2,700,000 which funds would be directed towards our mining operations.  We have raised no funds to date on this offering.  There can be no assurances that we can obtain future additional financing on terms reasonably acceptable to us or at all.  The lack of capital may force us to curtail our operating activities and potential investment activities.

We do not currently have any commitments for material capital expenditures over the near or long term, and none are presently contemplated over normal operating requirements.









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ITEM 3.   CONTROLS AND PROCEDURES

(a)     Evaluation of Disclosure Controls and Procedures:   Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

(b)     Changes in Internal Control over Financial Reporting:   There were no changes in the Company's internal control over financial reporting identified in connection with the Company evaluation of these controls as of the end of the period covered by this report that could have significantly affected those controls subsequent to the date of the evaluation referred to in the previous paragraph, including any correction action with regard to significant deficiencies and material weakness.

PART II - OTHER INFORMATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K



|(a) | Exhibits | Item Description                                                                                                                                               
|--- | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |          |                                                                                                                                                                
|    | 31.1     | Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
|    |          |                                                                                                                                                                
|    | 31.2     | Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
|    |          |                                                                                                                                                                
|    | 32.1     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).              
|    |          |                                                                                                                                                                
|    | 32.2     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).              







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(b)     Reports on Form 8-K

Three reports on Form 8-K were filed during and subsequent to the quarter ended June 30, 2004 relating to events that occurred during the quarter.

On May 17, 2004 we reported that:

Lee Mun-Kit has agreed to join the Board of Directors.

On May 17, 2004 we also reported that:

We entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. to which the parties have agreed to establish a Sino-Foreign Co-operative Joint Venture company (Xinlong Mineral Resources Co. Ltd.) in Yunnan Province, PRC, to jointly explore the Gongguo Gold Project, Yunnan Province, China

On June 2, 2004 we reported that:

We entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. to which the parties have agreed to establish a Sino-Foreign Co-operative Joint Venture company (Xinan Mineral Resources Co. Ltd.) in Yunnan Province, PRC, to jointly explore the Dongchuan Gold Project, Yunnan Province, China

On July 9, 2004 we reported that:

Tim Searcy has agreed to join the Board of Directors and has accepted the appointment as President and Chief Executive Officer.

On July 9, 2004 we also reported that:

Paul Visosky has accepted the appointment as Corporate Secretary.









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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date this 13th day of August, 2004.



| | LUNA GOLD CORP.
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| | By:            
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