TSX: JAG
TORONTO, Oct. 4, 2016 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX: JAG) is pleased to
announce that it has entered into an earn-in agreement (the
"Agreement") with Avanco Resources Limited (ASX: AVB) ("Avanco"),
pursuant to which Avanco may earn up to a 100% interest in the
Gurupi Project ("Gurupi" or the "Project"). Gurupi is located in
the state of Maranhão, Brazil, and
includes the Cipoeiro and Chega Tudo deposits which are found in a
72-kilometre trend that remains mainly unexplored. Jaguar, through
a wholly-owned subsidiary, holds mineral concessions totaling
140,332 hectares. The last feasibility study on the Gurupi Project
was prepared on January 31, 2011, by
TechnoMine Services LLC, which is filed under the Company's profile
on SEDAR (www.sedar.com).
Main Terms of the Agreement
Upon the satisfactory completion of certain closing conditions,
the Agreement provides Avanco with the right to earn 20% of
Jaguar's interest in the Project by paying to Jaguar an aggregate
cash fee of US$1.7 million plus an
additional fee of US$500,000 in cash
or shares of Avanco, and by expending a minimum of US$300,000 on permitting and access in respect of
the Project. Avanco will earn an additional 31% interest in Gurupi
upon the publication of a JORC compliant reserve estimate in excess
of 500,000 ounces, and will earn a further 29% interest in Gurupi
upon demonstration of adequate funding coupled with the start of
construction of a process plant with capacity in excess of 50,000
ounces per year. In the event that Avanco cannot demonstrate
adequate funding for the Project, Jaguar will have a one-time right
to buy-back a 31% interest in Gurupi and control of the Project by
paying to Avanco the reasonable costs and expenses incurred in the
preparation of the JORC compliant reserve estimate and technical
studies. Avanco will have the option to acquire the remaining 20%
interest in the Project at any time by paying a fee equal to the
greater of US$6.25 million or the sum
of US$12.50 per ounce of gold as per
the JORC compliant reserve estimate.
Pursuant to the Agreement, Jaguar will retain a Net Smelter
Return ("NSR") royalty ("Royalty") upon the commissioning of
production at the Project. The Royalty will be 1% NSR on the first
500,000 ounces of gold or gold ounce equivalents produced; 2% NSR
on production from 500,001 to 1,500,000 ounces of gold or gold
ounce equivalents; and 1% NSR on production exceeding 1,500,000
ounces of gold or gold ounce equivalents.
Rodney Lamond, President and
Chief Executive Officer of Jaguar commented, "We are
pleased to announce that we are partnering with Avanco to
develop the Gurupi Project while retaining exposure to the
significant exploration upside this property possesses through an
Earn-In Agreement and through an NSR Royalty on the Property.
Jaguar originally acquired Gurupi as part of the 2009 acquisition
of Mineração Chega Tudo from Kinross
Gold, through which we gained 100% ownership of the entire
mineral licenses for the Project located in northern Brazil. Since joining Jaguar as CEO, our
primary focus has been on our core assets in the Iron Quadrangle to
create shareholder value. We are pleased with this agreement and
with our new partners who we believe will develop the Gurupi
Project enabling the Company to remain focused on our operating
mines and achieving our 2016 production guidance."
Mr. Lamond went on to say, "Avanco's strong track
record in raising funds, building and commissioning mines in
northern Brazil, and recognized
Brazilian regulatory skills makes them a solid partner positioned
for success. Avanco's board members include former Kinross Gold executives highly familiar with
Gurupi, which further demonstrates that Avanco's team retains the
necessary experience and knowledge to take on this high-profile
asset and succeed. Lastly, the Royalty, while beneficial to Jaguar,
will allow Avanco to develop the project cost effectively."
About Avanco Resources Ltd.
Avanco is a Brazilian
focused mining exploration and development company, targeting
exploration and near- term production from copper and gold
projects. Avanco's Board of Directors and Management team have
extensive global resource industry experience, particularly in
Northern Brazil where they have
recently commissioned the Antas copper-gold mine on-schedule and
under budget. Avanco has offices in Perth, Australia; Rio de Janeiro; and Parauapebas, Brazil.
About Jaguar Mining Inc.
Jaguar Mining Inc. is
a Canadian-listed junior gold mining, development, and exploration
company operating in Brazil with
three gold mining complexes, and a large land package with
significant upside exploration potential from mineral claims
covering an area of approximately 191,000 hectares. The Company's
principal operating assets are located in a prolific greenstone
belt in the state of Minas Gerais and include the Turmalina Gold
Mine Complex ("Mineração Turmalina Ltda" or "MTL") and Caeté Gold
Mine Complex ("Mineração Serras do Oeste Ltda" or "MSOL") which
combined produce more than 90,000 ounces of gold annually. The
Company also owns the Paciência Gold Mine Complex, which has been
on care and maintenance since 2012. Additional information is
available on the Company's website at www.jaguarmining.com.
Forward-Looking Statements
Certain
statements in this press release constitute "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking information contained in
forward-looking statements can be identified by the use of words
such as "are expected", "is forecast", "is targeted",
"approximately", "plans", "anticipates" "projects", "anticipates",
"continue", "estimate", "believe" 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. This press release contains forward-looking information
regarding (1) the expectations regarding whether a transaction will
be consummated, including whether conditions to the consummation of
the transactions will be satisfied, or the timing for completing
the transaction, (2) expectations for the effects of the
transaction or the ability of the Company to successfully achieve
business objectives, including the effects of unexpected costs,
liabilities or delays, and (3) expectations for other economic,
business, and/or competitive factors. Forward-looking information
involves a number of known and unknown risks and uncertainties,
which, if incorrect, may cause actual results to differ materially
from those anticipated by the Company, including, without
limitation, the risks that the transaction as described in the
Agreement may not be completed and the parties may be unable to
realize on the anticipated benefits of the transaction.
Accordingly, readers should not place undue reliance on
forward-looking information.
For additional information with respect to these and other
factors and assumptions underlying the forward-looking information
made in this press release, see the Company's most recent annual
information form and management's discussion and analysis, as well
as other public disclosure documents that can be accessed under the
issuer profile of "Jaguar Mining Inc." on SEDAR at www.sedar.com.
The forward-looking information set forth herein reflects the
Company's reasonable expectations as at the date of this press
release and is subject to change after such date. The Company
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement.
SOURCE Jaguar Mining Inc.