TSX:JAG
TORONTO, April 12, 2017 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX:JAG) today announced first
quarter 2017 ("Q1 2017") operational results for its core assets
located in the Iron Quadrangle area of Minas Gerais, Brazil. All figures are in US dollars unless
otherwise expressed. Full financial results are expected to be
released after May 9, 2017.
First Quarter 2017 Highlights
- Consolidated gold production of 22,291 ounces, up 5%
year-over-year, with 214,000 tonnes of ore processed.
- Strong operating performance at Pilar Gold Mine resulted in an
86% increase in gold production to 8,485 ounces, a 17% improvement
in average grade to 3.39 g/t, and higher recovery of 91%. Strong
gold production reflects the advancing ore development into the
higher-grade Orebodies BF and BFII.
- Turmalina Gold Mine produced
12,736 ounces of gold, lower than Q1 2016 and Q4 2016 production
levels, due to lower throughput and grade. Mining activities in one
section of Orebody A were temporarily interrupted during the
quarter to conduct ground control rehabilitation work. Previously
scheduled high-grade mining blocks from this area were deferred
later into the mining schedule.
- Turmalina increased Measured & Indicated Mineral Resources
by 22% to 540,000 ounces of gold (grade of 4.93 g/t Au), and Proven
& Probable Mineral Reserves for Orebody C by 167% to 80,000
ounces of gold (grade of 4.10 g/t Au)
- Growth exploration programs advanced during the quarter with
1,889 metres of diamond drilling being completed from surface and
966 metres from underground. Over 150 metres of exploration
development also advanced during the quarter for new deep drilling
horizon platforms at Pilar and Turmalina
- Preliminary cash balance of approximately $18.1 million as of March
31, 2017, compared to a cash balance of $26.3 million at December
31, 2016.
Rodney Lamond, President and
Chief Executive Officer of Jaguar commented, "Jaguar Mining
commenced 2017 performing well, building on the positive trends
established in 2016, to deliver total gold production of 22,291
ounces in Q1 2017. In particular, strong operating performance at
Pilar resulted in an 86% increase in gold production to 8,485
ounces, and a 17% improvement in grade to 3.39 g/t compared to Q1
2016. Pilar's strong performance reflects the advancing of ore
development (614 metres) into the high-grade Orebodies BF and BFII.
Turmalina's mining activities in a high-grade section of Orebody A
were temporarily interrupted during the quarter due to ground
control rehabilitation. We are confident that a revised mining
schedule at Turmalina will recover the gold production shortfall
during the second quarter.
"Looking ahead, we remain on track to achieve 2017 production
guidance of between 100,000 – 110,000 ounces. Additionally,
performance is expected to continue to improve as we remain focused
on growing our sustainable production profile through ongoing
strategic exploration and development programs. As previously
reported, strong exploration results during 2016 drove a 22%
increase in Measured & Indicated Mineral Resources at
Turmalina, to 540,000 ounces of gold with average grade of 4.93 g/t
Au. The growth in M&I Mineral Resources at Turmalina has
positively impacted the mine life at Turmalina and we expect our
growing sustainable production profile to have a positive impact on
unitary costs in the near term."
"We look forward to the development and advancement of our
growth exploration programs in the first half of 2017 and reporting
the results from the deep drilling programs at Turmalina and Pilar
later this year."
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Operating
Summary
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Q1
2017
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Q1
2016
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Turmalina
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Pilar
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Roça
Grande
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Total
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Turmalina
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Pilar
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Roça
Grande
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Total
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Tonnes milled
(t)
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113,000
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84,000
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17,000
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214,000
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128,000
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56,000
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12,000
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196,000
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Average head grade
(g/t)
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3.79
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3.39
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2.12
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3.50
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4.29
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2.89
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2.53
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3.91
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Recovery %
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91%
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91%
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91%
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91%
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90%
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90%
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90%
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90%
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Gold
ounces
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Produced
(oz)
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12,736
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8,485
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1,070
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22,291
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15,772
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4,552
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873
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21,197
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Sold (oz)
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13,536
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9,422
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1,076
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24,034
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16,635
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5,369
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877
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22,881
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Development
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Primary
(m)
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366
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470
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74
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910
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731
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312
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118
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1,161
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Exploration
(m)
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104
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13
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34
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151
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-
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-
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-
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-
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Secondary
(m)
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754
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614
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14
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1,382
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838
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24
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184
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1,046
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Diamond drilling
(m)
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4,164
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5,218
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567
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9,949
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4,691
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2,508
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4,693
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11,892
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Avg. realized gold
price ($/oz)
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$1,215
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$1,165
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2017 Guidance
Jaguar remains strongly focused on
delivering positive and sustainable physical performance,
profitability, and cost optimization. The Company has established
the following consolidated production and cost guidance for 2017
and represents achievable results from operations:
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2017
Guidance
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Turmalina
Complex
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Caeté
Complex
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Consolidated
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Low
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High
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Low
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High
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Low
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High
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Gold production
(ounces)
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60,000
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65,000
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40,000
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45,000
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100,000
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110,000
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Cash operating costs
(per ounce sold)1
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$600
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$650
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$ 900
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$1,000
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$720
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$755
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All-in sustaining
costs (per ounce sold)1
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$800
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$850
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$1,020
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$1,180
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$900
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$1,000
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Development
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Primary
(m)
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2,500
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2,900
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2,200
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2,600
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4,700
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5,500
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Secondary
(m)
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2,200
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2,700
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3,400
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3,850
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5,600
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6,550
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Diamond drilling
(m)
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16,000
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18,000
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10,000
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13,000
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26,000
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31,000
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Growth exploration
investment (core assets) ($million)
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$7.5
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$8.0
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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 Measures section below. 2017 cost
guidance has been prepared on the basis of a foreign exchange ratio
of 3.5 Brazilian Reias vs. the US dollar.
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Preliminary Cash Balance
Preliminary cash balance of
approximately $18.1 million as at
March 31, 2017, compared to a cash
balance of $26.3 million at
December 31, 2016. Q1 2017 cash
balance reflects impact of a stronger foreign Brazilian currency,
accelerated exploration, and approximately $2.0 million in principal and interest repayments
towards debt facilities.
2017 Exploration and Mineral Resources Highlights
- An incremental $8.0 million is
targeted to be spent on a major growth exploration program in 2017
and 2018. Approximately $6.0 million
has been dedicated to core assets to test the down-plunge
continuities of Orebodies A, B, and C at Turmalina and Orebodies
BFII and BF at Pilar to increase identified Mineral Resources,
including the discovery of new resources at the high priority
Pacheca and Cubas targets near Pilar. The remaining $2.0 million will be distributed towards other
growth targets in and around the existing core assets.
- Drilling and exploration success at Turmalina during 2016
resulted in upgraded Inferred Resources at Orebodies A and C to
Measured and Indicated ("M&I") Mineral Resources, announced
March 30, 2017:
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- M&I Mineral Resources increased 22% to 540,000 ounces of
gold, after production depletion in 2016, with grade of 4.93 g/t
Au.
- Orebody C Proven and Probable Mineral Reserves increased 167%
during 2016 to 80,000 ounces of gold grading 4.10 g/t Au, up 12%,
reflecting the newly discovered high-grade core within larger
mineralized intersections.
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").
The Iron Quadrangle
The Iron Quadrangle has been an
area of mineral exploration 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 and Caeté Gold Mine Complex (Pilar
and Roça Grande mines, and Caeté Plant) 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 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.
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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 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
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 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.