TSX:JAG
TORONTO, Jan. 18, 2017 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX: JAG) is pleased to report
consolidated operating results for the three ("Q4 2016") and twelve
months ended December 31, 2016 ("FY
2016"). All dollar amounts are in U.S. dollars unless otherwise
stated.
FY 2016 Highlights
- Record gold recovery, improving grades, and higher throughput
levels positioned the Company to exceed 2016 production guidance
with strong annual gold production of 96,536 ounces.
- Turmalina Gold Mine
("Turmalina") delivered 25% higher gold production of 63,186 ounces
based on record gold recovery of 91.5%, a 24% increase in ore
milled, and improved head grade ("grade") of 4.28 grams per tonne
("g/t").
- Record gold recovery at Caeté Complex ("Caeté") of 90.7% and
increasing grade with gold production of 33,350 ounces.
- Pilar delievered strong full year production of 27,878 ounces
with improved grade of 3.35 g/t and record gold recovery of 90.8%.
Increased mining development at Pilar is expected to result in
production growth in 2017.
- Achieved key 2016 objectives in primary and secondary mine
development, expansion, and production across assets.
- Milling capacity at Turmalina increased with the
recommissioning of Mill #3 (announced January 5, 2017).
- Approved and began implementation in late 2016 of an
exploration program of up to $8
million to focus on brownfield exploration targets near core
assets, the majority of which will be spent in 2017.
- 2017 guidance includes: estimated 10% higher production of
100,000 - 110,000 ounces of gold, cash operating costs of
$720 - $755 per ounce sold, and
all-in sustaining costs of $900 -
$1,000 per ounce sold.
- Strong preliminary cash balance of approximately $26.4 million as at December 31, 2016 compared to $15.3 million as at December 31, 2015.
Q4 2016 Highlights
- Consolidated gold production of 25,335 ounces, up 9%, led by
strong production at Turmalina of 16,027 ounces, up 11%.
- Record consolidated gold recovery of 91.7%, total ore milled of
237,000 tonnes, up 10%, and average grade of 3.60 g/t.
- Turmalina gold production increased 11%, the best quarterly
production since Q3 2011, with record recovery of 92.5%, a 22%
increase in ore milled, and average grade of 4.37 g/t.
- Caeté increased gold production to 9,308 ounces, up 7%, and
achieved record quarterly gold recovery of 90.8%.
Rodney Lamond, President and
Chief Executive Officer of Jaguar, commented, "I am extremely
pleased to report we exceeded our 2016 annual production guidance,
producing 96,536 ounces of gold. We had a safe and strong finish to
the year with higher production, improved grades, and record gold
recoveries during the fourth quarter. Throughout the year, we
focused on positioning our Company for the future and achieving our
key objectives. The hard work of our employees and support groups
contributed to a strong year as we successfully transformed our
Company profile into a growth producer while delivering record
performances.
In 2016, we increased mine development and exploration which
delivered sustainable growth across all of our operating mines. Our
team continued to build confidence in our current geological models
and mine plans, while also improving productivity in our primary
assets to support growth. We successfully completed the
recommissioning of Mill #3, a major milestone for Turmalina, which
is expected to increase the daily processing capacity of
the plant by 35% and reduce unit costs. Additionally, the
Operational Excellence Program we commenced at Turmalina earlier in
2016 has paid off with initiatives to identify and eliminate waste
and improve productivity, translating to tangible results, and
future growth opportunities. We will be rolling out the same
program at Pilar, with a view to increase productivity and lower
unit costs there as well.
With all of the outstanding progress made this year, we
expect 2017 to be the year we become a sustainable 100,000 plus
ounce gold producer, targeting production between 100,000 - 110,000
ounces. As we continue to grow, we are also focused on increasing
efficiencies and implementing technology to decrease costs. Looking
forward, increasing our sustainable ounce profile in a safe way is
our primary objective which will help us execute on a five-year
target to become a 200,000 ounce gold producer, growing organically
and opportunistically within our jurisdictions. We commence 2017
with a strengthened balance sheet, following the full conversion of
convertible debentures to common shares last October, and we are
well funded with a solid cash balance in our treasury. We expect to
provide an update on the exploration growth pipeline programs and
report an updated Mineral Reserve and Mineral Resource statement
within the first quarter of 2017. Finally, I would like to thank
all of our employees and stakeholders for their support,
dedication, and efforts during this transformational year."
2016 Operating Results
The consolidated production for
the quarter and year ended December 31,
2016 is as follows:
|
|
|
|
Q4
2016
|
Q4
2015
|
Turmalina
|
Caeté
|
Total
|
Turmalina
|
Caeté
|
Total
|
Ore milled
(tonnes)
|
122,000
|
115,000
|
237,000
|
100,000
|
116,000
|
216,000
|
Recovery
(%)
|
92.5
|
90.8
|
91.7
|
91.3
|
89.8
|
90.5
|
Head grade
(g/t)
|
4.37
|
2.79
|
3.60
|
4.79
|
2.59
|
3.90
|
Gold
ounces
|
|
|
|
|
|
|
|
Produced
(oz)
|
16,027
|
9,308
|
25,335
|
14,449
|
8,720
|
23,169
|
|
Sold (oz)
|
16,024
|
9,086
|
25,110
|
15,527
|
8,889
|
24,416
|
Development
|
|
|
|
|
|
|
|
Primary
(m)
|
483
|
608
|
1,091
|
965
|
22
|
987
|
|
Secondary
(m)
|
466
|
740
|
1,206
|
605
|
137
|
742
|
Definition, infill,
and exploration drilling (m)
|
5,123
|
4,790
|
9,913
|
6,774
|
-
|
6,774
|
|
|
|
|
FY
2016
|
FY
2015
|
Turmalina
|
Caeté
|
Total
|
Turmalina
|
Caeté
|
Total
|
Ore milled
(tonnes)
|
502,000
|
379,000
|
881,000
|
406,000
|
469,000
|
875,000
|
Recovery
(%)
|
91.5
|
90.7
|
91.1
|
90.6
|
89.4
|
90.0
|
Head grade
(g/t)
|
4.28
|
3.02
|
3.77
|
4.25
|
2.98
|
3.62
|
Gold
ounces
|
|
|
|
|
|
|
|
Produced
(oz)
|
63,186
|
33,350
|
96,536
|
50,659
|
39,762
|
90,421
|
|
Sold (oz)
|
63,639
|
33,639
|
97,277
|
51,818
|
41,169
|
92,987
|
Development
|
|
|
|
|
|
|
|
Primary
(m)
|
2,985
|
2,477
|
5,462
|
3,568
|
227
|
3,795
|
|
Secondary
(m)
|
2,620
|
2,131
|
4,751
|
2,003
|
230
|
2,233
|
Definition, infill,
and exploration drilling (m)
|
17,858
|
20,182
|
38,040
|
25,617
|
10,635
|
36,252
|
Details of the Company's financial performance, including
mine-by-mine analysis, capital and operating costs, will be
included in its year-end and fourth quarter 2016 financial results
expected to be released in March
2017.
Cash Balance
The preliminary cash balance as at
December 31, 2016 was approximately
$26.4 million compared to a cash
balance of $15.3 million as at
December 31, 2015, while investing in
capital activities and maintaining a stable working capital
position. During the fourth quarter, the Company entered into an
agreement with Sprott Private Resource Lending (Collector) LP for a
secured $10.0 million loan facility
to fund the Company's accelerated growth exploration program.
Capital investments in 2016 were primarily funded through
operating cash flows, a trend expected to continue into 2017. In
addition to the increase in capital expenditures, Jaguar also paid
$1.9 million in other debt principal
and interest payments during the year. The strengthening of the
Brazilian Real during 2016 and the resulting foreign currency
losses have had an impact on some of the gold price gains during
the year.
2017 Guidance
The following is the Company's 2017
production and cost guidance:
|
|
|
|
|
Turmalina
|
Caeté
|
Consolidated
|
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Gold production
(ounces)
|
60,000
|
65,000
|
40,000
|
45,000
|
100,000
|
110,000
|
Percentage of total
production (%)
|
60
|
59
|
40
|
41
|
100
|
100
|
Cash operating costs
(per ounce sold)1
|
$600
|
$650
|
$900
|
$1,000
|
$720
|
$755
|
All-in sustaining
costs (per ounce sold)1
|
$800
|
$850
|
$1,020
|
$1,180
|
$900
|
$1,000
|
Development
|
|
|
|
|
|
|
|
Primary
(m)
|
2,500
|
2,900
|
2,200
|
2,600
|
4,700
|
5,500
|
|
Secondary
(m)
|
2,200
|
2,700
|
3,400
|
3,850
|
5,600
|
6,550
|
Definition, infill,
and exploration drilling (m)
|
16,000
|
18,000
|
10,000
|
13,000
|
26,000
|
31,000
|
Growth exploration
investment (core assets) ($Ms)
|
|
|
|
|
$7.5
|
$8.0
|
|
1.
|
Cash operating costs
and all-in sustaining costs are non-GAAP financial performance
measures with no standard definition under IFRS. Refer to Non-IFRS
Financial Performance Measures below. 2017 cost guidance has been
prepared on the basis of a foreign exchange rate of 3.5 Brazilian
Reais vs. the US dollar.
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The Iron Quadrangle
The Iron Quadrangle has been an
area of mineral exploration for centuries, dating back to the 16th
century. The discovery in 1699-1701 of black gold contaminated with
iron and platinum-group metals in the southeastern corner of the
Iron Quadrangle gave rise to the name of the town Ouro Preto (Black Gold). The Iron Quadrangle
contains world-class multi-million ounce gold deposits such as
Morro Velho, Cuiabá, and São Bento. Jaguar holds the second largest
gold land position in the Iron Quadrangle with just over 25,000
hectares.
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 the Iron Quadrangle, 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 ("Mineracao Serras do Oeste
Ltda" or "MSOL") which combined produce more than 95,000 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 news 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 news release contains
forward-looking information regarding expected production, grades,
tonnes milled, recovery rates, cash operating costs, and
definition/delineation drilling, in addition to overall
expenditures and results of operations during 2016. The Company has
made numerous assumptions with respect to forward-looking
information contained herein, including, among other things,
assumptions about the estimated timeline for the development of its
mineral properties; the supply and demand for, and the level and
volatility of the price of, gold; the accuracy of reserve and
resource estimates and the assumptions on which the reserve and
resource estimates are based; the receipt of necessary permits;
market competition; ongoing relations with employees and impacted
communities; and general business and economic conditions.
Forward-looking information involve a number of known and unknown
risks and uncertainties, including among others the risk of Jaguar
not meeting the forecast plans regarding its operations and
financial performance, the uncertainties with respect to the
price of gold, labor disruptions, mechanical failures, increase in
costs, environmental compliance and change in environmental
legislation and regulation, procurement and delivery of parts and
supplies to the operations, uncertainties inherent to capital
markets in general and other risks inherent to the gold
exploration, development and production industry, which, if
incorrect, may cause actual results to differ materially from those
anticipated by the Company and described herein. 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 news 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 news
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 news release
is expressly qualified by this cautionary statement.
Non-IFRS Measures
This news release provides
certain financial measures that do not have a standardized meaning
prescribed by IFRS. Readers are cautioned to review the above
stated footnotes where the Company expanded on its use of non-IFRS
measures.
1.
|
Cash operating
costs and cash operating cost per ounce are non-IFRS measures. In
the gold mining industry, cash operating costs and cash operating
costs per ounce are common performance measures but do not have any
standardized meaning. Cash operating costs are derived from amounts
included in the Consolidated Statements of Comprehensive Income
(Loss) and include mine-site operating costs such as mining,
processing and administration as well as royalty expenses, but
exclude depreciation, depletion, share-based payment expenses, and
reclamation costs. Cash operating costs per ounce are based on
ounces produced and are calculated by dividing cash operating costs
by commercial gold ounces produced; US$ cash operating costs per
ounce produced are derived from the cash operating costs per ounce
produced translated using the average Brazilian Central Bank R$/US$
exchange rate. The Company discloses cash operating costs and cash
operating costs per ounce as it believes those measures provide
valuable assistance to investors and analysts in evaluating the
Company's operational performance and ability to generate cash
flow. The most directly comparable measure prepared in accordance
with IFRS is total production costs. A reconciliation of cash
operating costs per ounce to total production costs for the most
recent reporting period, the quarter ended September 30, 2016 is
set out in the Company's third quarter 2016 MD&A filed on SEDAR
at www.sedar.com.
|
|
|
2.
|
All-in sustaining
cost is a non-IFRS measure. This measure is intended to assist
readers in evaluating the total costs of producing gold from
current operations. While there is no standardized meaning across
the industry for this measure, except for non-cash items the
Company's definition conforms to the all-in sustaining cost
definition as set out by the World Gold Council in its guidance
note dated June 27, 2013. The Company defines all-in sustaining
cost as the sum of production costs, sustaining capital (capital
required to maintain current operations at existing levels),
corporate general and administrative expenses, and in-mine
exploration expenses. All-in sustaining cost excludes growth
capital, reclamation cost accretion related to current operations,
interest and other financing costs, and taxes. A reconciliation of
all-in sustaining cost to total production costs for the most
recent reporting period, the quarter ended September 30, 2016 is
set out in the Company's third quarter 2016 MD&A filed on SEDAR
at www.sedar.com.
|
SOURCE Jaguar Mining Inc.