TSX:JAG
TORONTO, March 21, 2017 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX: JAG) today announced
financial and operating results for the fourth quarter ("Q4 2016")
and full-year ended December 31, 2016
("FY 2016"). All dollar amounts are in thousands of U.S. dollars
unless otherwise stated.
FY 2016 Consolidated Highlights
- Operating cash flow up 56% to $37.8
million as compared to FY 2015. Free cash flow turned
positive year-over-year to $11.3
million.
- 2016 gold production of 96,608 ounces exceeded 2016 guidance.
Delivered record gold recovery of 91%, higher grade of 3.74 g/t,
and higher throughput levels.
- Increasing consolidated 2017 gold production guidance between
100,000 – 110,000 ounces.
- Substantial increase in capital investments with $25.4 million of sustaining capital in FY 2016 to
transform operations, support a growing production profile, and
expand mine life. Primary development increased 44% to 5,462 metres
while secondary development more than doubled to 4,751 metres
compared to FY 2015.
- Capital expenditures up 58% to $29.8
million, of which 85% was invested in sustaining capital,
financed 100% through operating cash flow demonstrating the
sustaining capability of the operations.
- Improved cash operating costs ("COC") to $719 per ounce sold, from $755 in FY 2015. Despite the strengthening of the
Brazilian Real and restart of development at Pilar, the Company
achieved the lower end of 2016 COC guidance range of $700 – $750 per
ounce sold.
- All-in sustaining costs ("AISC") of $1,099 per ounce sold, reflects a 47% increase in
sustaining capital spend.
- Working capital improved to $8.9
million as at December 31,
2016, up from $2.0 million at
December 31, 2015.
Working capital reflects a substantial increase in cash invested in
primary and secondary development, up 44% and 113% respectively,
and includes $10.3 million in loans
from Brazilian banks which are renewed every six months and are all
classified as short-term.
Q4 2016 Consolidated Highlights
- Strengthened the balance sheet with the full conversion of
$21.5 million of the Senior Secured
Convertible Debentures.
- Operating cash flow up 25% to $8.5
million after paying approximately $2.9 million in recoverable taxes.
- Consolidated gold production of 25,407 ounces, up 10% from
23,169 in Q4/15. Gold sales up 3% to 25,110 ounces.
- COC of $735 per ounce sold, up
16% from $631 in Q4 2015, primarily
due to an appreciating Brazilian Real compared to the US dollar,
and the restart of secondary development at Pilar, now positioned
to commence stoping phase.
- AISC of $1,098 per ounce sold, up
11%, from $991 in Q4 2015, reflecting
higher sustaining capital spending across all three mines to
accelerate primary development, exploration drilling, and equipment
investments including the rebuild of the paste-fill plant and
recommissioning of Mill #3 at Turmalina.
- Established a $10.0 million
secured loan facility with Sprott Private Resource Lending
(Collector) LP ("Sprott Lending") to fund $8.0 million in accelerated growth exploration
commenced in 2017 at all operating mines.
- Entered into an arrangement with Avanco Resources Limited to
develop and acquire up to 100% of the Gurupi Project through an
Earn-In Agreement and NSR Royalty; while retaining exposure to full
exploration upside of the property.
Rodney Lamond, President and
Chief Executive Officer of Jaguar, commented, "2016 was a
successful and transformational year for Jaguar Mining. We exceeded
2016 production guidance and improved cash operating costs to
$719 per ounce sold, despite
operating under a strengthening Brazilian foreign currency.
Operating cash flow increased 56% to $37.8
million while free cash flow turned positive with
$11.3 million generated during 2016.
Capital investment across all operating mines significantly
increased and the projects undertaken in 2016 were fully funded
through operating cash flow. During the fourth quarter, Jaguar
completed the conversion of all senior secured debentures to common
shares which strengthened the balance sheet and our capital
structure. Our ability to access capital enabled us to negotiate a
$10.0 million secured loan facility
with Sprott Lending. Up to $8.0
million of the facility will be used to fund an accelerated
growth exploration program in 2017. Additionally, we entered into
an arrangement with Avanco Resources Limited to advance the
development of Gurupi while retaining Jaguar's exposure to the
significant upside potential of the property."
"In 2017, we expect our gold production to increase to
between 100,000 – 110,000 ounces. We are also focused on delivering
lower unit costs through the formalization of company-wide expense
controls, leveraging technology, and efficiency and productivity
improvements from operational excellence programs at both Turmalina
and Pilar. Consolidated cash operating costs are expected to be
between $720 - $755 per ounce sold
and AISC of $900 - $1,000 per ounce
sold."
Mr. Lamond concluded: "Sustaining exploration drilling
programs completed during 2016 were designed to grow and replace
the mining depletion of mineral reserves at our core mining assets
and to extend mine life. For 2017, we are confident that our growth
exploration drilling programs will provide additional resource
growth opportunities. Our team is reviewing and evaluating efforts
to achieve the Company's strategic goal to increase production by
50% by adding back capacity from the Paciência mining complex. This
asset was previously placed on care and maintenance in 2012. At our
core assets, we are maintaining the increased pace of mine
development and accelerated exploration programs to continue to
build confidence in current geological models and mine plans. This
focus will enable us to achieve our 2017 production guidance with
an expected increase in production during the second half of
2017. We are confident and motivated on executing our
five-year strategy of increasing the sustainable gold production
profile to approximately 200,000 ounces per year."
Full details of the results are provided in the Company's
Management's Discussion & Analysis, available on the Company's
website at www.jaguarmining.com and on SEDAR at www.sedar.com.
FY 2016 and Q4 2016 Key Financial Statement
Highlights
- Revenue for Q4 2016 increased 13% to $30.3 million, compared with $26.8 million in Q4 2015, due to a 10%
year-over-year increase in the average realized gold price to
$1,205 in Q4 2016 compared with
$1,098 in Q4 2015, and a 3% increase
in ounces sold. Revenue for FY 2016 also increased 13% to
$120.5 million from $106.5 million in FY 2015.
- Net loss for the year ended December 31,
2016 was mainly a result of the change in the fair value of
the convertible debentures (non-cash loss of $78.0 million) based on the significant increase
in Jaguar's share price from December 31,
2015 to the respective conversion dates of the debentures,
which was partially offset by a decrease in the Company's labour
litigation provision amounting to $6.6
million primarily due to a change in the estimate in the
first quarter of 2016.
- Adjusted EBITDA for Q4 2016 was $6.3
million compared to $7.4
million for Q4 2015, while adjusted EBITDA for the year
ended December 31, 2016 was
$36.6 million compared to
$21.4 million in FY 2015.
- Operating cash flow (excluding cash tax refunds) was
$8.5 million for Q4 2016, compared to
$6.5 million in Q4 2015. For FY 2016,
operating cash flow (excluding cash tax refunds) was $36.8 million compared to $16.6 million for FY 2015.
- Free cash flow was $2.3 million
for Q4 2016 and $11.3 million for FY
2016 based on operating cash flow (excluding cash tax refunds) less
total capital expenditures, compared to $0.9
million and negative $1.6
million in Q4 2015 and FY 2015, respectively. Free cash flow
per ounce sold was $117 in FY 2016
compared to negative $7 in FY
2015.
Outlook
The following is the Company's production and
cost guidance for 2017:
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|
|
|
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Turmalina
Complex
|
Caeté
Complex
|
Consolidated
|
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
|
|
|
|
|
|
|
Gold production
(ounces)
|
60,000
|
65,000
|
40,000
|
45,000
|
100,000
|
110,000
|
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 the Non-IFRS Financial Performance Measures section of the
MD&A. 2017 cost guidance has been prepared on the basis of a
foreign exchange ratio of 3.5 Brazilian Reias vs. the US
dollar.
|
2017 Key Growth Drivers
- Completing 2017 capital investment program to increase the
number of available working areas through increased development and
exploration to grow sustainable production across all operating
mines.
- $8.0 million to be spent on major
growth exploration program including Turmalina and Pilar, as well
as the high priority Pacheca and Cubas targets near Pilar and other
advanced targets. Approximately $6.0
million will be allocated towards Jaguar's core assets,
Turmalina and Pilar, to drive increased mine life. The remaining
$2.0 million will be distributed
towards other growth targets.
- This growth exploration program is primarily focused on
increasing identified mineral resources at core assets and the
discovery of new resources near existing infrastructure across
operating mines. The growth exploration program is expected to
complete approximately 31,000 metres of diamond drilling, including
approximately 15,000 metres of drilling down-plunge continuities of
Orebodies A and C at Turmalina and Orebodies BFII and BF at Pilar.
Lastly, approximately 8,500 metres of surface diamond drilling will
test the Pacheca and Cubas targets and other advanced targets.
- Growing mine production, increasing throughput, and reducing
cash operating costs guidance.
- Commencing mine-wide Operational Excellence Program ("OEP") at
Pilar to identify and eliminate waste, lower costs, and improve
productivity to create and deliver results, which will drive future
growth. Continuing OEP at Turmalina.
- Implementation of formalized capital allocation and value
driven decision making.
Consolidated 2016 Financial Highlights
|
|
|
($ thousands, except
where indicated)
|
For the three
months
ended December 31,
|
For the twelve
months
ended December 31,
|
|
2016
|
2015
|
2016
|
2015
|
Financial
Data
|
|
|
|
|
Revenue
|
$30,261
|
$26,820
|
$120,539
|
$106,513
|
Operating
costs
|
19,355
|
13,933
|
71,012
|
67,327
|
Depreciation
|
10,153
|
3,628
|
35,752
|
16,519
|
Gross
profit
|
753
|
9,259
|
13,775
|
22,667
|
|
Gross profit
(excluding depreciation)1
|
10,906
|
12,887
|
49,527
|
39,186
|
Loss on change in
fair value of notes payable
|
361
|
4,821
|
77,977
|
4,818
|
Net (loss)
income
|
(9,280)
|
1,670
|
(82,795)
|
(11,212)
|
|
Per share
("EPS")
|
(0.03)
|
0.02
|
(0.50)
|
(0.10)
|
EBITDA1
|
3,037
|
(2,873)
|
(38,761)
|
9,189
|
|
Adjusted
EBITDA1,2
|
6,348
|
7,431
|
36,648
|
21,438
|
|
Adjusted EBITDA per
share1
|
0.02
|
0.07
|
0.22
|
0.19
|
Cash operating costs
(per ounce sold)1
|
735
|
631
|
719
|
755
|
All-in sustaining
costs (per ounce sold)1
|
1,098
|
991
|
1,099
|
1,079
|
Average realized gold
price (per ounce)1
|
1,205
|
1,098
|
1,239
|
1,145
|
Cash generated from
operating activities
|
8,467
|
6,786
|
37,781
|
24,249
|
Free cash
flow1
|
2,292
|
899
|
11,346
|
(661)
|
Free cash flow (per
ounce sold)1
|
91
|
37
|
117
|
(7)
|
Sustaining capital
expenditures1
|
6,172
|
5,598
|
25,419
|
17,243
|
Non-sustaining
capital expenditures1
|
1,648
|
334
|
4,429
|
1,618
|
Total capital
expenditures
|
7,820
|
5,932
|
29,848
|
18,861
|
1 Average
realized gold price, sustaining and non-sustaining capital
expenditures, cash operating costs and all-in sustaining costs,
free cash flow, EBITDA and Adjusted EBITDA, Adjusted EBITDA per
share, and gross profit (excluding depreciation) are non-IFRS
financial performance measures with no standard definition under
IFRS. Refer to the Non-IFRS Financial Performance Measures
section of the MD&A.
|
2 Adjusted
EBITDA excludes non-cash items such as impairment and write downs.
For more details refer to the Non-IFRS Performance Measures section
of the MD&A.
|
|
|
|
|
|
|
For the three
months
ended December 31,
|
For the twelve
months
ended December 31,
|
|
2016
|
2015
|
2016
|
2015
|
Operating
Data
|
|
|
|
|
Gold produced
(ounces)
|
25,407
|
23,169
|
96,608
|
90,421
|
Gold sold
(ounces)
|
25,110
|
24,416
|
97,277
|
92,988
|
Primary development
(metres)
|
1,091
|
987
|
5,462
|
3,796
|
Secondary development
(metres)
|
1,205
|
742
|
4,751
|
2,232
|
Definition, infill,
and exploration drilling (metres)
|
9,914
|
6,760
|
37,860
|
36,240
|
Foreign Currency
Jaguar has been impacted from the
strengthening in the Brazilian Real exchange rate relative to the
US dollar, which has had the effect of increasing cash costs in US
dollar terms.
The average exchange rate during Q4 2016 was R$3.30 per US dollar compared to R$3.84 per US dollar in Q4 2015. The closing
exchange rate as at December 31, 2016
was R$3.26 per US dollar compared to
R$3.90 per US dollar as at
December 31, 2015, representing a 16%
appreciation of the Brazilian Real relative to the US dollar during
2016.
Convertible Debentures
On October 5, 2016, the Company issued a notice of
redemption to holders of the outstanding debentures. As set out in
the notice of redemption, the outstanding debentures were to be
redeemed as of November 8, 2016 (the
"Redemption Date") upon payment of 120% of the principal amount and
all accrued and unpaid interest to but excluding the Redemption
Date.
During Q3 and Q4 2016, all the convertible debentures holders
elected to voluntarily convert their debentures into common shares
of the Company. The Company has significantly strengthened its
balance sheet with the elimination of its senior secured debt.
Liquidity and Use of Funds
Cash balance as at
December 31, 2016 was $26.3 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
$10.0 million secured loan facility
to fund the Company's accelerated growth exploration program.
Capital investments during 2016 were 100% funded through
operating cash flows. In addition to the increase in capital
expenditures, Jaguar also paid $1.9
million in other debt principal and interest payments during
the year.
Working capital was $8.9 million
as at December 31, 2016 compared to
$2.0 million as at December 31, 2015, including increased capital
spending including annual increases of 44% in primary development
and 113% in secondary development.
2016 Actual Performance Compared with 2016
Guidance
The Company exceeded 2016 annual production
guidance based on consolidated production of 96,609 ounces. The
Company also achieved the lower end of consolidated cash operating
cost guidance of $700 to $750 per
ounce sold, with cash operating costs of $719 per ounce sold for FY 2016. Consolidated
AISC of $1,099 per ounce sold was
higher than 2016 guidance due to increased sustaining capital
expenditures of $25.4 million for
2016, which represented a 47% increase over FY 2015.
|
|
|
|
|
Turmalina
Complex
|
Caeté
Complex
|
Consolidated
|
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
FY
Actual
|
|
|
|
|
|
|
|
|
Gold production
(ounces)
|
62,000
|
65,000
|
28,000
|
30,000
|
90,000
|
95,000
|
96,609
|
Cash operating costs
(per oz sold)1
|
$600
|
$650
|
$925
|
$975
|
$700
|
$750
|
$719
|
All-in sustaining
costs (per oz sold)1
|
$850
|
$900
|
$1,150
|
$1,200
|
$950
|
$1,000
|
$1,099
|
Recovery
|
90%
|
90%
|
90%
|
90%
|
90%
|
90%
|
91%
|
Development
|
|
|
|
|
|
|
|
|
Primary
(m)
|
3,000
|
3,300
|
1,700
|
1,900
|
4,700
|
5,200
|
5,462
|
|
Secondary
(m)
|
3,200
|
3,400
|
2,500
|
2,700
|
5,700
|
6,100
|
4,751
|
Definition, infill,
& exploration drilling (m)
|
18,000
|
20,000
|
10,000
|
12,000
|
28,000
|
32,000
|
37,860
|
1 Cash
operating costs and all-in sustaining costs are non-gaap financial
performance measures with no standard definition under IFRS.
Refer to the Non-IFRS Financial Performance Measures section of the
MD&A.
|
Corporate Update
- On February 8, 2017, the Company
announced multiple high-grade drill intercepts generated from 36
infill drill holes (5,393 metres) designed to test the currently
reported mineral resource envelope of Orebodies A and C at
Turmalina. Significant drill intercepts for Orebody A include 11.33
g/t Au over 17.1 metres (estimated true width ("ETW") – 14.6
metres), 9.95 g/t Au over 14.2 metres (ETW – 10.8 metres), and 6.08
g/t Au over 20.3 metres (ETW – 10.4 metres). Significant drill
intercepts for Orebody C include 6.39 g/t Au over 6.1 metres (ETW –
6.0 metres), 9.27 g/t Au over 3.8 metres (ETW – 3.6 metres), and
7.04 g/t Au over 2.8 metres (ETW – 2.7 metres).
- The Company completed 9,914 metres of definition, infill, and
exploration drilling during Q4 2016 (Q4 2015 – 6,760 metres)
focused on key targets at Turmalina and Caeté, for a total of
37,860 metres of drilling in FY 2016, a 4% increase over 36,240
metres in FY 2015.
- On October 4, 2016, the Company
announced that it has entered into an earn-in agreement with Avanco
Resources Limited ("Avanco"), pursuant to which Avanco may earn up
to a 100% interest in the Gurupi Project.
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.
Qualified Person
Scientific and technical information
contained in this press release has been reviewed and approved by
Geraldo Guimarães Vieira dos Santos, BSc Geo., MAIG-3946 (CP),
Geology Manager, who is an employee of Jaguar Mining Inc., and is a
"qualified person" as defined by National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI
43-101").
FORWARD-LOOKING STATEMENTS
Certain statements in
this news release constitute "forward-looking information" within
the meaning of applicable Canadian securities legislation.
Forward-looking statements and information are provided for the
purpose of providing information about management's expectations
and plans relating to the future. All of the forward-looking
information made in this news release are qualified by the
cautionary statements below and those made in our other filings
with the securities regulators in Canada. 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. All statements, other than statements of historical fact,
may be considered to be or include forward looking information.
This news release contains forward-looking information regarding,
among other things, expected sales, production statistics, ore
grades, tonnes milled, recovery rates, cash operating costs,
definition/delineation drilling, the timing and amount of estimated
future production, costs of production, capital expenditures, costs
and timing of the development of projects and new deposits, success
of exploration, development and mining activities, currency
fluctuations, capital requirements, project studies, mine life
extensions, restarting suspended or disrupted operations,
continuous improvement initiatives, and resolution of pending
litigation. 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; political and legal
developments in any jurisdiction in which the Company operates
being consistent with its current expectations including, without
limitation, the impact of any potential power rationing, tailings
facility regulation, exploration and mine operating licenses and
permits being obtained an renewed and/or there being adverse
amendments to mining or other laws in Brazil and any changes to 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; uncertainties with
respect to the price of gold, labor disruptions, mechanical
failures, increase in costs, environmental compliance and change in
environmental legislation and regulation, weather delays and
increased costs or production delays due to natural disasters,
power disruptions, procurement and delivery of parts and supplies
to the operations; uncertainties inherent to capital markets in
general (including the sometimes volatile valuation of securities
and an uncertain ability to raise new capital) 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. In addition, there are risks and hazards associated with
the business of gold exploration, development, mining and
production, including environmental hazards, tailings dam failures,
industrial accidents and workplace safety problems, unusual or
unexpected geological formations, pressures, cave-ins, flooding,
chemical spills, and gold bullion thefts and losses (and the risk
of inadequate insurance, or the inability to obtain insurance, to
cover these risks). 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 costs per ounce sold 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 sold and are calculated by dividing cash operating
costs by commercial gold ounces sold. 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 December 31, 2016 is set out in the Company's fourth
quarter 2016 MD&A filed on SEDAR
at www.sedar.com.
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2.
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All-in sustaining
costs per ounce 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 costs 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 costs 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 December 31,
2016 is set out in the Company's fourth quarter 2016 MD&A
filed on SEDAR at www.sedar.com.
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SOURCE Jaguar Mining Inc.