TSX: JAG
TORONTO, Dec. 23, 2013 /CNW/ - Jaguar Mining Inc.
(Jaguar or the Company) announced today that in order
to refinance and restructure its capital structure and related
obligations, the Company commenced proceedings under the
Companies' Creditors Arrangement Act (the CCAA) in
Ontario to complete its previously
announced recapitalization and financing transaction (the
Recapitalization) which has the following key elements:
- Reduction of total pro forma debt from $323 million as at September 30, 2013 to $54
million upon completion of the Recapitalization;
- Reduction of projected annual cash interest payments by
$13 million; and
- Investment of approximately $50
million of new equity raised by way of a backstopped share
offering by current holders of the Company's Convertible Notes (as
defined below), the net proceeds of which will be available for use
in Jaguar's operations.
The Recapitalization under the CCAA has the
support of holders of approximately 93% of the aggregate principal
amount of the Company's 4.5% Senior Unsecured Convertible Notes due
November 1, 2014 and 5.5% Senior
Unsecured Convertible Notes due March 31,
2016 (collectively, the Convertible Notes).
Jaguar's subsidiaries are not parties to
Jaguar's CCAA proceedings. The operations of Jaguar and its
subsidiaries are intended to continue as usual and obligations to
employees and suppliers during the restructuring process are
expected to be met in the ordinary course. Jaguar management will
remain responsible for the day-to-day operations of the
Company.
"The CCAA process will allow us the time and
stability required to implement the Recapitalization, while
continuing our normal day-to-day operations," said David Petroff, Chief Executive Officer of the
Company. He continued, "We believe that a court supervised
restructuring of Jaguar's business is the best method available to
secure its future. We are moving forward with our restructuring and
refinancing objectives to strengthen the Company and allow it to
pursue all of its strategic alternatives."
Forward-Looking Statements
Certain statements in this press release
constitute "Forward-Looking Statements" within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation. These Forward-Looking
Statements include, but are not limited to, statements concerning
the implementation of the CCAA proceedings, the Recapitalization
and the Company's future financial condition. Forward-Looking
Statements can be identified by the use of words, such as "are
expected", "is forecast", "is targeted", "approximately" or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might", or
"will" be taken, occur or be achieved. Forward-Looking Statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results or performance to be materially
different from any future results or performance expressed or
implied by the Forward-Looking Statements.
These risks, uncertainties and other factors
relating to Jaguar include, but are not limited to, our level of
indebtedness and the continued deferral of the interest payment on
the 4.5% senior unsecured convertible notes due 2014; the
implementation and impact of the Recapitalization; our ability to
generate sufficient cash flow from operations or obtain adequate
financing to fund our capital expenditures and working capital
needs and meet our other obligations; the volatility of our stock
price, and the ability of our common stock to remain listed and
traded on the TSX; our ability to maintain relationships with
suppliers, customers, employees, stockholders and other third
parties in light of our current liquidity situation and the CCAA
proceedings; the volatility of gold prices; a continuation of
depressed gold prices; regulatory and environmental risks
associated with exploration, drilling and production activities;
the adverse effects of changes in applicable tax, mining and
environmental and other regulatory legislation; the risks of
conducting operations in Brazil
and the impact of pricing differentials, fluctuations in foreign
currency exchange rates and political developments on the financial
results of our operations. The results, estimates, events or other
forward-looking information predicted in any Forward-Looking
Statements may differ materially from actual results or events if
known or unknown risks, trends or uncertainties affect Jaguar's
business, or if Jaguar's estimates or assumptions turn out to be
inaccurate. The implementation of the Recapitalization is subject
to a number of conditions and other risks and uncertainties
including, without limitation, court and any required regulatory
approvals. Accordingly, there can be no assurance that the
Recapitalization will occur, or that it will occur on the terms and
conditions contemplated. The Recapitalization could be modified,
restructured or terminated.
These Forward-Looking Statements represent the
Company's views as of the date of this press release. The Company
anticipates that subsequent events and developments may cause the
Company's views to change. The Company does not undertake to update
any forward-looking statements, either written or oral, that may be
made from time to time by or on behalf of the Company subsequent to
the date of this discussion except as required by law. For a
discussion of important factors affecting the Company, including
fluctuations in the price of gold and exchange rates, uncertainty
in the calculation of mineral resources, competition, uncertainty
concerning geological conditions and governmental regulations and
assumptions underlying the Company's forward-looking statements,
see the "CAUTIONARY NOTE" regarding forward looking statements and
"RISK FACTORS" in the Company's Annual Information Form for the
year ended December 31, 2012 filed on
SEDAR and available at http://www.sedar.com and the Company's
Annual Report on Form 40-F for the year ended December 31, 2012 filed with the United States
Securities and Exchange Commission and available at
www.sec.gov.
About Jaguar Mining Inc.
Jaguar is a junior gold producer in Brazil with operations in a prolific
greenstone belt in the state of Minas Gerais and owns the Gurupi
Project in Northeastern Brazil in
the state of Maranhão. The Company also owns additional mineral
resources at its approximate 210,000-hectare land base in
Brazil. Additional information is
available on the Company's website at www.jaguarmining.com.
SOURCE Jaguar Mining Inc.