TORONTO, March 22, 2016 /PRNewswire/ --
TSX-V: JAG
Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX-V:
JAG) today announced operational and financial results for the
fourth quarter ("Q4 2015") and 2015 fiscal year-end ("FY 2015").
Full Financial Statements and Management Discussion & Analysis
documents are available on SEDAR and the Company's website at
http://www.jaguarmining.com. All figures are in US dollars unless
otherwise expressed.
Q4 2015 Highlights
- Consolidated gold production of 23,169 ounces, up 3% compared
to the fourth quarter of 2014 ("Q4 2014")
- Improved consolidated average head grade up 30% to 3.96 g/t in
Q4 2015 from 3.04 g/t in Q4 2014
- Revenue of $26.8 million, up 4%
despite a 9% decrease in the average realized gold price, compared
to Q4 2014
- 35% improvement in consolidated cash operating costs ("COC") to
$631 per ounce sold from $965 in Q4 2014
- 26% improvement in consolidated all-in sustaining costs
("AISC") to $991 per ounce sold from
$1,343 in Q4 2014
- Operating cash flow of $6.8
million, up $8.0 million
compared to negative operating cash flow of $1.2 million in Q4 2014
- Completed over-subscribed financing of Convertible Senior
Secured Debentures (the "Debentures") for aggregate gross proceeds
of $21.5 million in October 2015
FY 2015 Highlights
- Consolidated gold production of 90,421 ounces exceeded revised
2015 guidance
- 23% improvement in consolidated COC to $755 per ounce sold from $980 in FY 2014
- 21% improvement in consolidated AISC to $1,088 per ounce sold, down from $1,378 in FY 2014, and below annual 2015 guidance
of $1,100 - $1,200 per ounce
sold
- Revenue of $106.5 million
compared to $116.4 million for FY
2014
- Operating cash flow of $24.2
million for FY 2015, compared to negative operating cash
flows of $6.8 million in FY 2014,
despite a 9% decrease in the average realized gold price
- Net loss for the year ended December 31,
2015 was $11.2 million (year
ended December 31, 2014 - net income
of $130.9 million) due to the impact
of the net impairment charge ($4.3
million), the change in the fair value of the convertible
debentures ($4.8 million), and the
increase in the legal provisions ($10.4
million)
- Received a total of $7.7 million
of cash tax refunds in respect of its Federal VAT input tax credits
for years 2009 through 2011, for its operating Brazilian
subsidiaries during FY 2015 (FY 2014 - $nil)
- Cash and gold bullion balance as of December 31, 2015 was $15.3 million, up 71% compared to $9.0 million as at December 31, 2014
- As at December 31, 2015, working
capital improved to $2.0 million, a
significant achievement compared to the working capital deficiency
of $23.2 million as at December 31, 2014
Rodney Lamond, President and
Chief Executive Officer of Jaguar commented, "We are very
pleased with the continued progress of the Company, in terms of
significantly lowering our unit costs by 23% and improving head
grades by over 21%, while managing our tonnage and exceeding
revised 2015 guidance. Going forward, with a strong and committed
team in place, we are targeting achievable deliverables with a key
focus on continuing to streamline company-wide operations. This
focus will allow us to keep reducing our cash operating costs while
optimizing operations. Furthermore, we are well positioned with a
significantly improved balance sheet and working capital position
to continue to invest in our current base of assets. Investments in
our current operations via exploration and development will allow
us to build confidence in our current mine models, and provide
positive returns. These key focus areas will aid us in delivering a
value-driven culture and deliver positive cash flows in the near
term for all stakeholders."
Q4 & FY 2015 Financial & Operating
Highlights
($ thousands, except For the three months For the twelve months
where indicated) ended December 31, ended December 31,
2015 2014 2015 2014
Financial Data
IFRS Measures
Revenue $26,820 $25,766 $106,513 $116,362
Cost of sales 17,561 30,286 83,846 120,952
Depreciation
(included in cost of
sales) 3,628 6,778 16,519 30,521
Gross margin 9,259 (4,520) 22,667 (4,590)
Gross margin
(excluding
depreciation)[1] 12,887 2,258 39,186 25,931
Net income (loss) 1,670 (90,530) (11,212) 130,863
Per share ("EPS") 0.02 (0.81) (0.10) 1.69
EBITDA[1] 1,948 (80,053) 14,010 177,653
Adjusted EBITDA[2] 8,154 (4,305) 22,161 5,006
Non-IFRS Measures
Average realized gold
price ($ per
ounce)[1] 1,098 1,204 1,145 1,261
Cash operating costs
(per ounce
produced)[1] 574 894 694 940
Cash operating costs
(per ounce sold)[1] 631 965 755 980
All-in sustaining
costs (per ounce
sold)[1] 991 1,343 1,088 1,378
Sustaining capital
expenditures[1] 5,598 5,156 18,146 21,369
Non-sustaining
capital
expenditures[1] 334 225 715 1,052
Total capital
expenditures[3] $5,932 $5,381 $18,861 $22,421
Operating Data
Ore processed (t) 216,000 258,000 875,000 1,038,000
Average head grade
(g/t) 3.96 3.04 3.67 3.03
Gold produced
(ounces) 23,169 22,456 90,421 92,057
Gold sold (ounces) 24,416 21,400 92,988 92,264
Definition drilling
(metres) 6,760 10,000 36,238 37,771
1. Average realized gold price, sustaining and non-sustaining capital expenditures,
COC and AISC, EBITDA and Adjusted EBITDA, and gross margin (excluding
depreciation) are non-gaap financial performance measures with no standard
definition under IFRS. Refer to the Non-IFRS Financial Performance Measures
section of the MD&A.
2. Adjusted EBITDA excludes non-cash items such as impairment and write-downs. For
more details, refer to the Non-IFRS Performance Measures section of the MD&A.
3. These amounts are presented on accrual basis. Capital expenditures are included
in our calculation of all-in sustaining costs.
Cash and Gold Bullion
December December
($ thousands) 31, 2015 31, 2014
Cash and cash equivalents $15,319 $7,161
Gold bullion - 1,801
Total cash and gold bullion $15,319 $8,962
Q4 2015 and FY 2015 Financial Highlights
Revenue for Q4 2015 increased 4%, compared to the same period in
2014, mainly due to a 14% increase in ounces sold, offset by a 9%
reduction in the average realized gold price. The 8% reduction in
revenue for FY 2015 as compared to FY 2014 was mainly due to the
$116 per ounce decrease in the
average realized gold price.
Positive Operating Cash Flow, Significantly Lower COC and
AISC Lower than Annual Guidance
Cash operating costs ("COC") per ounce of gold produced during
Q4 2015 were $574 compared to
$894 during Q4 2014, a decrease of
$320 per ounce, or 36%. The decrease
in costs was a result of an improvement in the average head grade
by 30% and favourable foreign exchange as the Brazilian Real, the
currency of our ongoing operations, weakened 51% against the US
dollar (Q4 2015 average exchange rate was R$3.84 per US dollar compared to Q4 2014 average
exchange rate of R$2.54 per US
dollar).
The decreases in COC per ounce noted above were partially offset
by the following cost increases: higher electricity tarrifs
($34 per ounce), an increase in the
cost of materials due to inflation ($21 per ounce), and the allocation of all
mine-site fixed overheads to mining activity at the Caeté Gold
Complex due to the suspension of primary development at the Pilar
and Roça Grande gold mines ($68 per
ounce).
Operating cash flow during Q4 2015 of $6.8 million, increased $8.0 million, from negative operating cash flow
of $1.2 million in Q4 2014, mainly
due to lower costs due to improved grade, lower tonnage, and the
benefit realized from the decline in the value of Brazilian Reais
as compared to the US dollar.
For the full year 2015, operating cash flow was positive at
$24.2 million, compared to negative
operating cash flows of $6.8 million
in FY 2014, despite a 9% decrease in the average realized gold
price.
In FY 2015, AISC decreased 21%, or $290, to $1,088 per
ounce of gold sold, compared to $1,378 per ounce sold in FY 2014. Sustaining
capital expenditures in FY 2015 were $18.1
million, which were 15% or $3.2
million lower than FY 2014, mainly due to the suspension of
development at Pilar.
AISC decreased 26%, or $352, to
$991 per ounce of gold sold in Q4
2015, compared to $1,343 per ounce
sold during Q4 2014. In Q4 2015, sustaining capital expenditures
increased by $0.4 million, or 9%, to
$5.6 million compared to $5.2 million during Q4 2014, primarily due to the
restart of capital refurbishment activities for the mining fleet,
following the completion of the financing (see below).
Adjusted EBITDA (excluding non-cash items and impairment) for Q4
2015 and FY 2015 was $8.2 million and
$22.2 million respectively, mainly
due to lower COC and cash refunds of tax credits during the
year.
Net loss for the year ended December 31,
2015 was $11.2 million (year
ended December 31, 2014 - net income
of $130.9 million) due to the impact
of the net impairment ($4.3 million),
the change in the fair value of the convertible debentures
($4.8 million), and the increase in
the legal provisions ($10.4
million).
Financial Position
As at December 31, 2015, the
Company had cash and unsold gold bullion on hand of $15.3 million ($9.0
million as at December 31,
2014). In 2015, the Company significantly improved its
working capital and ended the year with positive working capital of
$2.0 million compared to a working
capital deficiency of $23.2 million
as at December 31, 2014. The
improvement was mainly due to the successful completion of the
over-subscribed financing of the Debentures.
The Company continues to review and implement cost control
measures across the operations and corporate offices to improve
operating cash flow and enhance the Company's working capital
position.
On October 27, 2015, the Company
closed an over-subscribed financing of the Debentures. Aggregate
gross proceeds of $21.5 million were
raised, of which approximately $8.4
million was used to repay Renvest Global Resources Fund
("Renvest") in order to transfer its interest in its credit
facility with the Company to the convertible debenture subscribers.
The Company plans to use the remainder of the proceeds to advance
asset optimization plans in conjunction with the Company's ongoing
development and production activities and for general corporate
purposes.
In addition to the repayment of $8.4
million to Renvest on closure of the financing, the Company
repaid $9.9 million of principal plus
interest on the Renvest debt during FY 2015. The Company also had
net repayments of $2.3 million of
principal on a portion of loans from Brazilian banks during the
year. As at December 31, 2015, total
debt was $41.2 million, compared to
$31.0 million as at December 31, 2014.
The Company received a total of $7.7
million of cash tax refunds in respect of its Federal VAT
input tax credits for years 2009 through 2011, for its operating
Brazilian subsidiaries during FY 2015 (FY 2014 - $nil).
Q4 2015 and FY 2015 Operating Highlights
Strong Gold Production
- Consolidated gold production during Q4 2015 and FY 2015, was
23,169 and 90,421 ounces respectively, compared to 22,456 and
92,057 ounces in the corresponding 2014 periods.
- Turmalina Gold Mine increased production by 20% in Q4 2015
resulting in 14,449 ounces of gold produced compared to 12,067
ounces in the corresponding 2014 period. The increase in ounces
produced was a result of a 33% increase in the average head grade.
The higher grades were partially offset by lower tonnes processed
during December 2015, primarily due
to the unexpected shut down of Mill #2 for unscheduled repairs and
maintenance (refer to press release dated December 21, 2015). Turmalina Mill #2 returned online in early
January 2016 and continues to perform
well.
- Caeté Gold Complex produced 8,720 ounces of gold in Q4 2015
compared to 10,389 ounces in Q4 2014, due to lower grades, for a
total of 39,762 ounces in FY 2015, exceeding 2015 annual guidance
of 36,000 ounces.
Improving Grades with Lower Tonnage
- A total of 216,000 tonnes were processed in Q4 2015 (Q4 2014 -
258,000 tonnes) at an average head grade of 3.96 g/t (Q4 2014 -
3.04 g/t), a 30% increase in average head grade compared to the
prior year. Total tonnes processed in Q4 2015 decreased 16%,
compared to the same period in 2014, primarily due to an increased
focus on mining higher grade.
- A total of 875,000 tonnes were processed during the twelve
months of 2015 (FY 2014 - 1,038,000 tonnes) at an average head
grade of 3.67 g/t (FY 2014 - 3.03 g/t), an increase in grade of 21%
compared to the same period of 2014.
- At Turmalina Gold Mine, 100,000 tonnes (Q4 2014 - 117,000
tonnes) were processed in Q4 2015 at an average head grade of 4.79
g/t (Q4 2014 - 3.60 g/t).
- Caeté Gold Complex processed 116,000 tonnes in Q4 2015 (Q4 2014
- 141,000 tonnes) at an average head grade of 2.59 g/t (Q4 2014 -
2.57 g/t).
Increase in Pilar Reserves of 310%
During 2015, the Company completed a strategically targeted
drilling campaign at the Pilar and Turmalina gold mines with the
goal of gaining increased confidence in the mineral resources and
reserves, to facilitate better mine planning for 2016.
The exploration drilling results enabled the Company to announce
a 310% increase in total Mineral Reserves to 172,000 ounces at
Pilar, with a 63% increase in grade to 4.39 g/t Au, in its 2015
year-end mineral resource and mineral reserve estimate announced
March 4, 2016. Based on the strong
exploration drilling results and increased reserves and resources,
primary and secondary development that had been suspended in Q4
2014, has been reinitiated at Pilar during Q1 2016.
Pilar Gold Mine Mineral Resource and Reserve Estimates as of
December 31, 2015:
Proven & Probable Reserves: 1,220
million tonnes grading 4.39 g/t Au, containing 172,000 oz Au
- Proven Reserves: 164 million tonnes grading 3.15 g/t Au,
containing 17,000 oz Au
- Probable Reserves: 1,056 million tonnes grading 4.58 g/t Au,
containing 156,000 oz Au
Measured & Indicated Resources: 3,479
million tonnes grading 4.59 g/t Au, containing 514,000 oz Au
- Measured Resources: 709 million tonnes grading 4.25 g/t Au,
containing 97,000 oz Au
- Indicated Resources: 2,770 million tonnes grading 4.68 g/t Au,
containing 417,000 oz Au
Inferred Resources: 1,208 million tonnes grading
5.45 g/t Au, containing 212,000 oz Au
2015 Results Compared to Guidance:
2015 Revised 2015
Guidance Actual
Consolidated
Brazilian Reais vs US
dollar foreign exchange
rate 2.5 2.2
Gold production (ounces) 89,500 90,421
Average head grade (g/t) 3.30-3.75 3.67
Ore processed (t) 925,000 875,000
Recovery rate (%) 90% 90%
Cash operating costs
(per ounce produced)[1] $800-$900 $694
All-in sustaining costs
(per ounce sold)[1] $1,100-$1,200 $1,088
Definition/delineation
drilling (metres) 34,000 36,238
Turmalina
Gold production (ounces) 53,500 50,659
Average head grade (g/t) 4.00-4.25 4.25
Ore processed (t) 475,000 406,000
Recovery rate (%) 90% 91%
Cash operating costs
(per ounce produced)[1] $640-$700 $540
All-in sustaining costs
(per ounce sold)[1] $900-$1,000 $890
Definition/delineation
drilling (metres) 25,000 25,603
Caeté
Gold production (ounces) 36,000 39,762
Average head grade (g/t) 2.40-2.90 2.92
Ore processed (t) 450,000 469,000
Recovery rate (%) 90% 90%
Cash operating costs
(per ounce produced)[1] $1,075-$1,175 $891
All-in sustaining costs
(per ounce sold)[1] $1,200-$1,300 $1,027
Definition/delineation
drilling (metres) 9,000 10,635
1. COC and AISC 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.
Outlook for 2016
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 2016 and represents
achievable results from operations:
2016 Annual Guidance Low High
Gold production (ounces) 90,000 95,000
Ore processed (t) 875,000 900,000
Recovery rate (%) 90% 90%
Cash operating costs (per ounce
produced)[1],[2] $700 $750
All-in sustaining costs (per ounce
sold)[1],[2] $950 $1,000
Sustaining capital expenditures
($'000) $23,000 $25,000
Definition/delineation drilling
(metres) 28,000 32,000
1. COC and AISC 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.
2. 2016 cost guidance has been prepared on the basis of a
foreign exchange rate of 3.8 Brazilian Reais vs. the US
dollar.
Qualified Person
Scientific and technical information contained in this press
release has been reviewed and approved by Marcos Dias Alvim, BSc
Geo., MAusIMM (CP), Project Development Manager, who is an employee
of Jaguar Mining Inc., and is a "qualified person" as such term is
defined by National Instrument 43-101 ("NI 43-101").
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 approximate 205,000
hectares. The Company's principle 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 ("Mineracao 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
http://www.jaguarmining.com.
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. Forward-looking statements include, but are
not limited to, management's assessment of Jaguar's future plans
and operation. Certain statements throughout this press release
constitute forward-looking statements (forecasts) under applicable
securities laws relating to future events or future performance.
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. 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. Management does not have firm
commitments for all of the costs, expenditures, prices or other
financial assumptions used to prepare the financial outlooks or
assurance that such results will be achieved. The actual results of
Jaguar will likely vary from the amounts set forth in the financial
outlooks and such variation may be material. Jaguar and its
management believe that the financial outlooks have been prepared
on a reasonable basis, reflecting the best estimates and judgments,
and represent, to the best of management's knowledge and opinion,
the Company's expected production, grades, tones milled, recovery
rates, cash operating costs, and definition/delineation drilling,
in addition to overall expenditures and results of operations
during 2016. However, because this information is highly subjective
and subject to numerous risks, including the risks discussed below,
it should not be relied on as necessarily indicative of future
results. Forward-looking information is based on current
expectations, estimates and projections that involve a number of
risks and uncertainties which could cause actual results to differ
materially from those anticipated by Jaguar and described in the
forward-looking information. The forward-looking information
contained in this press release is made as of the date hereof and
Jaguar undertakes no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, unless required by
applicable securities laws. The forward-looking information
contained in this press release is expressly qualified by this
cautionary statement.
Forward-Looking Statements involve known and unknown risks,
uncertainties and other factors may cause the actual results,
performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. Such risk
factors include, among others the risk of Jaguar's not meeting the
forecast plans regarding its operations and financial performance,
as well as those factors disclosed in the Company's current Annual
Information Form and Management's Discussion and Analysis, as well
as other public disclosure documents, available on SEDAR at
http://www.sedar.com. Although the Company has attempted
to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate. The forward-looking statements contained
herein are presented for the purposes of assisting investors in
understanding the Company's plan, objectives and goals and may not
be appropriate for other purposes. Accordingly, readers should not
place undue reliance on forward-looking statements.
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. Factors, which could cause results or events to
differ from current expectations, include, among other things,
actions taken against the Company by governmental agencies and
securities and other regulators and other factors not currently
viewed as material that could cause actual results to differ
materially from those described in the Forward-Looking Statements.
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.
Non-IFRS Measures
This press 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 year ended December 31,
2015 is set out in the Company's fourth quarter 2015 MD&A filed on SEDAR at
http://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 year ended December 31, 2015 is set out in the
Company's fourth quarter 2015 MD&A filed on SEDAR at http://www.sedar.com
.
Rodney Lamond, President &
CEO, rodney.lamond@jaguarmining.com; Hashim
Ahmed, Vice President Finance, Interim CFO,
hashim.ahmed@jaguarmining.com