TSX: JAG
TORONTO, Dec. 21, 2016 /PRNewswire/ - Jaguar Mining
Inc. ("Jaguar" or the "Company") (TSX: JAG) is pleased to
announce its consolidated annual guidance for 2017 and to provide
an update on its Growth Exploration Pipeline Initiative, announced
on October 27, 2016. All amounts are
in US dollars, unless otherwise stated.
2017 Guidance
- Gold production of 100,000 - 110,000 ounces, up approximately
10% compared to 2016 guidance
- Cash operating costs per ounce sold1 ("COC") of
$720 - $755
- All-in sustaining costs per ounce sold1 ("AISC") of
$900 - $1,000
- Total development includes primary of 4,700 - 5,500 metres,
Secondary of 5,600 - 6,550 metres
- Definition and infill drilling totalling 26,000 - 31,000
metres
- Growth exploration investment (core operating assets) of
$7.5 - $8.0 million
Exploration Update
- Commenced underground development of exploration drives in
order to launch the planned deep drilling programs from the hanging
wall at both Pilar and Turmalina to test the down-plunge extension
of current inferred resources.
- Initiated exploration drilling at the the Pacheca and Cubas
targets located in and around Pilar.
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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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Rodney Lamond, President and
Chief Executive Officer of Jaguar, stated: "Looking at 2017, we
are very pleased to announce that total gold production is expected
to be between 100,000 and 110,000 ounces per year, approximately
10% higher compared to 2016 gold production guidance. We are
confident that this level of production is an achievable and
sustainable target. The management team in Brazil has remained disciplined with how and
where capital is deployed while also initiating cost reductions
across the mines. We are focused on delivering on a five-year
strategy that will enable us to continue increasing our production
profile and move us closer to our strategic goal of becoming a
200,000 ounce per year gold producer." Mr. Lamond continued,
"On the exploration front, we initiated in October, an accelerated
growth exploration program focused on brownfield exploration
targets near our core assets in the Iron Quadrangle in Brazil. The programs are progressing as
planned and we look forward to delivering more news on the
exploration programs and results in the first quarter of
2017."
2017 Guidance
The Company's 2017 gold production
guidance has increased approximately 10% year-over-year and is a
significant step towards the Company's five-year strategic plan of
becoming a 200,000 ounce per year producer, focused on organic
growth within the prolific mining district of the Iron Quadrangle,
located in Minas Gerais, Brazil.
Jaguar will be leveraging off of the successes achieved with its
Operational Excellence Program at the Turmalina Gold Mine
("Turmalina") in 2016 and plans to expand the program into
Pilar Gold Mine ("Pilar") during
2017. Furthermore, the Company continues to evaluate and improve
the quality of its geological models and build confidence in its
mine plans, as well as review its current asset base in the Iron
Quadrangle with a commitment to continue enhancing its production
profile while operating in a safe and environmentally compliant
work place.
More detailed information relating to mine-by-mine guidance will
be available with the Company's 2016 production announcement to be
released in January 2017.
Growth Strategy
Jaguar continues to focus on safely
delivering positive and sustainable physical performance,
profitability, and cost optimization. The Company has also
established a number of strategic initiatives such as the Growth
Exploration Pipeline which are expected to create significant
shareholder value. The Growth Exploration Pipeline Initiative
investment of $7.5 to $8.0 million
will be focused on brownfield exploration targets to expand and
discover new mineral resources located in and around existing mine
infrastructure and have a strong potential to extend expected mine
life.
Update on Exploration Growth Pipeline Initiative
On
October 27, 2016, the Company
announced the commencement of an expanded and accelerated Growth
Exploration Pipleline Initiative at its operating underground gold
mines, Turmalina, Pilar, and Roça Grande, located in the Iron
Quadrangle. Under this program, the Company has spent $300,000 on exploration in and around the mines
to date, including underground development of exploration drives in
order to launch the planned deep drilling programs from the hanging
wall at both Pilar and Turmalina to test the down-plunge extension
of current inferred resources. The Company has also initiated
$200,000 in exploration drilling at
the the Pacheca and Cubas targets located in and around Pilar.
The initiative is focused on brownfield exploration targets to
expand and discover new mineral resources located in and around
existing mine infrastructure that have a strong potential to
further grow sustainable production, lower unit costs, increase
cash flows, and extend expected mine life by converting mineral
resources at its core assets through the upgrading of current
Measured and Indicated Mineral Resources to Mineral Reserves as
well as identifying future Measured, Indicated, and Inferred
Resources.
Exploration targets generated, as a result of extensive
compilation work from previous exploration campaigns, in and around
the current mine sites will be followed up by a combination of
geochemical and geophysical surveys. Subject to the results, an
additional 7,750 metres ("m") of surface drilling will be dedicated
to test those targets.
Turmalina Gold Mine and Pilar Gold
Mine
At Orebody A, 4,800 m of deep diamond drilling
will be performed after the development of a new 250 m exploration
drive is positioned in the hanging wall at Level 10. The proposed
drilling is intended to reach the 12, 13 and 14 Levels, up to 240
vertical m below current development and 160 m below the current
Inferred Resources.
At Orebody C, down-dip extension drilling of the south-eastern
portion of Orebody C is expected to generate new mineral resources
that are near surface and to contribute in the near-term to the
Turmalina throughput profile.
Induced polarization ("IP") geophysics will test the hanging
wall of Orebody C and eastern continuity of Orebody A. Following
the IP work, an estimated 6,000 m surface diamond drilling program
is expected to take place.
At Pilar, development of a new exploration drive is advancing in
preparation of an underground drilling campaign of approximately
5,100 m that will test the down-plunge extension and continuity of
ore bodies BFII, BF, and BA.
Deep diamond drilling at Pilar will be performed from the new
exploration drive positioned in the hanging wall of the mine at
Level 7. The proposed drilling is intended to reach the 12, 13 and
14 Levels, up to 250 vertical m below current development and 200 m
below the current Inferred Resources.
It is expected that drill results from Turmalina and Pilar will
be released in the second half of 2017.
Pacheca and Cubas Targets
Drilling at the Pacheca
target commenced in early November
2016. Approximately 1,600 m of surface diamond drilling on
the Pacheca target has been completed to date, with another 2,000 m
to be completed. Phase one of the diamond drilling campaign
has sucessfully confirmed the presence of hydrothermal alteration
associated with the presence of iron formation. Assays are
pending at Pacheca and results are expected to be announced during
the first quarter of 2017. The drill rig at Pacheca has been
mobilized to the Cubas target located at the Pilar Mine.
The Pacheca target is located three km north-east of the Pilar
mine and is characterized by a series of extensive open pit
excavations made by Portuguese explorers during the 18th century.
Similarly hosted in the Banded Iron Formation (BIF) encompassing
most of the gold mineralization in the Iron Quadrangle, the Pacheca
target is strongly delineated by soil gold geochemistry.
Drilling at the Cubas target commenced in mid December and is
ongoing. Surface diamond drilling on the Cubas target of
approximately 2,500 m (four holes) is planned to test the high
chargeability and high resistivity geophysics anomalies associated
with the southern continuity of the BIF and shear zone which host
the Pilar mine ore bodies. The Company expects to deliver results
regarding the Cubas target within the first quarter of 2017.
Qualified Person
Scientific and technical information
contained in this press release has been reviewed and approved by
Jean-Marc Lopez, BSc, P.Geo.,
MAusIMM Vice President of Geology and Exploration 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").
Quality Control
Jaguar continues to use a
quality-control program that includes insertion of blanks,
commercial standards, and duplicate core samples in order to ensure
best practice in sampling and analysis.
NQ and BQ size drill core is sawn in half with a diamond saw.
Samples are selected for analysis in standard intervals according
to geological characteristics such as lithology and hydrothermal
alteration contents. All diamond drill hole collars are accurately
surveyed using a Total Stations instrument and down-hole deviations
are surveyed using optical Reflex Maxibor.
Mean grades are calculated using a variable lower grade cut-off
(generally 2 g/t Au). No upper gold grade cut has been applied to
the data. However, the requirement for assay top cutting will be
assessed during future resource work.
Half of the sawed sample is forwarded to the analytical
laboratory for analysis while the remaining half of the core is
stored in a secure location. The drill core samples are transported
in securely sealed bags to the Jaguar in-house laboratory located
at the Caeté Mine Complex in Minas Gerais. Some samples are also
sent for check assaying to the independent SGS Geosol Laboratory
located in Vespasiano, Minas Gerais. The preparation and analysis
are all conducted at the respective facilities, either at the Roça
Grande Mine Laboratory in Caeté, Minas Gerais or at the SGS Geosol
Laboratory in Vespasiano, Minas Gerais. The Caeté Mine Complex
laboratory does not carry an ISO certification. The SGS Geosol
Laboratory is ISO 9001 accredited. As part of in-house QA/QC, the
Caeté Mine Complex laboratory inserts certified gold standards,
blanks, and pulp duplicate samples.
For a complete description of Jaguar's sample preparation,
analytical methods, and QA/QC procedures, please refer to the
"Technical Report on the Roça Grande and Pilar Operations, Minas
Gerais State, Brazil", a copy of
which is available on the Company's SEDAR profile at
www.sedar.com.
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 90,000 ounces of
gold annually. The Company also owns the Paciência Gold Mine
Complex, which has been on care and maintenance since 2012.
Additional information is available on the Company's website at
www.jaguarmining.com.
Forward Looking Statements
Certain statements in
this 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 during
2017 and cash operating costs, 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, gold
production, mine exploration and development 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.
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Cash operating costs
per ounce is a non-IFRS measure. 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 September 30,
2016 is set out in the Company's third quarter 2016 MD&A
filed on SEDAR at www.sedar.com.
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All-in sustaining
costs per ounce is a non-IFRS measure. This measure is intended to
assist readers in evaluating operating performance and the ability
to generate free cash flow 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
costs 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.
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SOURCE Jaguar Mining Inc.