TSX:JAG
TORONTO, July 18, 2017 /PRNewswire/ -- Jaguar
Mining Inc. ("Jaguar" or the "Company") (TSX:JAG) today
announced second quarter 2017 ("Q2 2017") preliminary 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 August 9, 2017.
Second Quarter 2017 Highlights
- Consolidated operating performance in Q2 2017, including
significant progress made at Turmalina, resulted in total H1 2017
consolidated gold production of 42,061 ounces. Q2 2017 consolidated
gold production totaled 19,749 ounces, grade was 3.18 g/t, and
recovery was 91%.
- The Company is committed to achieving strong gold production in
2017, and has revised its production guidance to 95,000 - 105,000
ounces compared to the previously announced range of 100,000 -
110,000 ounces reflecting the challenging first half of the year.
Management is confident that the improving trend achieved over the
course of the second quarter will be sustained, and that production
is expected to be at the high end of the range, exceeding the 2016
level. Improved operating performance across all sites is expected
to increase production in H2 2017, resulting in continued
improvement in cash costs. In particular, production from Turmalina
is expected to return to normal production levels as operational
challenges previously encountered, are no longer affecting
production cycles.
- Consolidated cash costs improved throughout Q2 2017, including
June 2017 cash costs of approximately
$797 per ounce sold. Preliminary cash
costs for Q2 2017 were $857 per ounce
sold compared to Q1 2017 cash costs of $924 and $758 per
ounce sold for Q2 2016. Continued Company-wide cost reduction
programs and a focus on profitable ounce production and waste
reduction resulted in lower unitary costs.
- Preliminary cash balance of approximately $20.6 million as of June
30, 2017, compared to a cash balance of $18.2 million at March 31,
2017. The cash position includes a secured facility for
$5.0 million from Sprott Private
Resource Lending (Collector) LP, and a non-brokered private
placement for gross proceeds of approximately $5.9 million, which closed on June 15.
- Growth exploration programs continued to advance during the
quarter with the development of exploration drives for deep
drilling being completed at Pilar and Turmalina. At Pilar, drilling
is targeting Levels 11-16 up to 350 m below current development and
250 vertical m below the current Inferred Resources. At Turmalina,
drilling is targeting Levels 12-16 up to 420 m below current
development and 300 vertical m below the current Inferred
Resources. Drill results are expected to add to the current Mineral
Reserves and Mineral Resources.
Rodney Lamond, President and
Chief Executive Officer of Jaguar commented, "Consolidated
operating performance during the second quarter, included a steady
improvement from Turmalina, which contributed to first half 2017
production of 42,061 ounces, and now positions the Company to
deliver on its revised 2017 production guidance of 95,000 – 105,000
ounces of gold. Turmalina improved during the quarter and ended Q2
2017 with significantly stronger production in June compared to
April following the decision to leave Level 9 and commence
development and mining of Level 10 in Orebody A. As expected, the
mining of Level 10 performed very well and the isolated ground
control issues encountered in an area of Level 9 have been negated.
Additionally, in early June, Turmalina physical results included an
increase in grade as the mining of higher-grade stopes in Level 10
continued."
"Lower cash costs are a direct result of Company-wide cost
reduction programs and a focus on profitable ounce production and
waste reduction at the mine level. For the month of June, unit
costs were approximately $797 per
ounce sold. Lower cash costs for the second quarter is a notable
improvement as the decrease in cash costs was achieved despite
lower than forecast ounces sold."
"Moving forward into the second half of 2017, we are
committed to further performance improvements and cost reductions.
We will continue the development of Level 10 and mine the
higher-grade ore shoots in Orebody C at Turmalina. At Pilar, we
expect to benefit from the past year of development and the mining
of the higher-grade BF and BFII Orebodies. Our Growth Exploration
Programs continue to advance at both Pilar and Turmalina and we
expect to deliver the drilling results of these programs over the
second half of the year."
Quarterly Operating Summary
|
|
|
|
Operating
Summary
|
Q2
2017
|
Q2
2016
|
Q1
2017
|
Turmalina
|
Pilar
|
Roça
Grande
|
Total
|
Turmalina
|
Pilar
|
Roça
Grande
|
Total
|
Turmalina
|
Pilar
|
Roça
Grande
|
Total
|
Tonnes milled
(t)
|
112,000
|
85,000
|
19,000
|
216,000
|
124,000
|
72,000
|
21,000
|
217,000
|
113,000
|
84,000
|
17,000
|
214,000
|
Average head grade
(g/t)
|
3.37
|
3.16
|
2.15
|
3.18
|
4.10
|
3.62
|
2.18
|
3.76
|
3.79
|
3.39
|
2.12
|
3.50
|
Recovery %
|
91
|
90
|
90
|
91
|
91
|
91
|
91
|
91
|
91
|
91
|
91
|
91
|
Gold
ounces
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced
(oz)
|
10,870
|
7,702
|
1,197
|
19,769
|
15,083
|
7,804
|
1,335
|
24,222
|
12,736
|
8,485
|
1,071
|
22,292
|
Sold (oz)
|
10,815
|
6,625
|
1,013
|
18,453
|
15,035
|
7,622
|
1,313
|
23,970
|
13,536
|
9,422
|
1,076
|
24,035
|
Financial
data
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating
costs
(per oz sold) **
|
$696
|
$1,039
|
$1,374
|
$857
|
$586
|
$958
|
$1,578
|
$758
|
$738
|
$1,092
|
$1,787
|
$924
|
Average
realized
gold price ($/oz)
|
|
|
|
$1,269
|
|
|
|
$1,251
|
|
|
|
$1,215
|
Development
|
|
|
|
|
|
|
|
|
|
|
|
|
Primary
(m)
|
519
|
218
|
102
|
839
|
1,166
|
600
|
91
|
1,857
|
366
|
470
|
74
|
910
|
Exploration
(m)
|
56
|
-
|
-
|
56
|
-
|
44
|
-
|
44
|
104
|
13
|
34
|
151
|
Secondary
(m)
|
292
|
577
|
120
|
989
|
693
|
267
|
357
|
1,317
|
754
|
614
|
14
|
1,382
|
Diamond
drilling
(m)
|
4,676
|
6,206
|
186
|
11,068
|
5,251
|
3,231
|
1,004
|
9,486
|
6,080
|
5,218
|
567
|
11,864
|
**Q2 2017
Financial data is preliminary
|
|
|
|
|
|
|
|
|
|
|
- Q2 2017 consolidated gold production totaled 19,749 ounces,
grade was 3.18 g/t Au and recovery was 91%.
- Turmalina Gold Mine produced
11,081 ounces of gold, lower than Q2 2016 and Q1 2017 production
levels, however production at Turmalina demonstrated steady
improvement during the quarter.
- Turmalina continues to develop and is now mining in Block 10 of
Orebody A after Block 9 was temporarily interrupted due to ground
rehabilitation issues during Q1 2017. Block 10 has performed in
line with expectations and mining is expected to ramp back up to
normal levels during the second half of 2017 as development and
mining return to a more normal cycle. Turmalina is reviewing
methods for stabilizing the isolated areas of Block 9 and returning
to finish mining later this year.
- Pilar Gold Mine production of
7,702 ounces in Q2 2017 declined compared to strong Q1 2017
results, however, production improvements in the later part of the
quarter started to reflect the advancing ore development into the
higher-grade Orebodies BF and BFII.
- Roça Grande Mine produced 1,197 ounces of gold a slight
decrease from Q2 2016, and a slight improvement compared to Q1
2017. Grades of 2.15 g/t and recoveries remained steady at
90%.
Consolidated Monthly Cost Per Ounce Sold
|
Monthly Q1
2017
|
Monthly Q2
2017
|
Quarterly
|
|
January
|
February
|
March
|
April
|
May
|
June
|
Q2 2017
|
Q2 2016
|
Q1 2017
|
Cash operating
costs
(per ounce sold)
|
$891
|
$937
|
$945
|
$1,017
|
$823
|
$797
|
$857
|
$758
|
$924
|
- The Company has made significant progress with its cost
reduction and operational excellence programs headed by the
consulting group Aquila Institute.
- Throughout H1 2017, Aquila worked with all sites to set up
operational excellence teams responsible for reviewing business
processes to identify efficiency and productivity opportunities as
well as direct cost reduction opportunities.
- Several process improvements have been implemented including
equipment utilization, availability, and shut down for off working
hours. Other initiatives include working with the sites to improve
tire life on underground equipment.
- The Company also implemented direct cost reductions at the
mines to improve overall costs. These initiatives include
renegotiating and rationalizing contracts, and the purchase of new
equipment to retire older equipment with higher operating
costs.
- On June 1, 2017 the Roça Grande
mine changed from four crews working three shifts per day, seven
days per week to two crews working two shifts per day, five days
per week. The reduced crews are expected to achieve a similar level
of production at a lower cost per tonne produced.
2017 Guidance
The Company is committed to achieving strong production in 2017,
above 2016 production levels. 2017 production guidance has been
revised to 95,000 – 105,000 ounces compared to 100,000 – 110,000
ounces previously announced.
2017
Guidance
|
Turmalina
Complex
|
Caeté
Complex
|
Consolidated
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Gold production
(ounces)
|
60,000
|
65,000
|
40,000
|
45,000
|
95,000
|
105,000
|
Preliminary Cash Balance
Preliminary cash balance of approximately $20.6 million as at June
30, 2017, compared to a cash balance of $18.2 million at March 31,
2017. Q2 2017 cash balance continues to reflect the impact
of a stronger foreign Brazilian currency, accelerated exploration,
and approximately $2.0 million in
principal and interest repayments towards debt facilities. On
June 9, 2017, the Company closed a
secured loan facility with Sprott Private Resource Lending
(Collector) LP for $5.0 million. On
June 15, 2017, the Company closed a
non-brokered private placement for gross proceeds of approximately
$5.9 million. Net proceeds from the
loan facility and private placement will be used for continuing
capital investment programs and working capital needs.
2017 Growth Exploration and Mineral Resources
Highlights
- An incremental $8.0 million is
expected 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 (see
news release dated June 21, 2017),
including the potential discovery of new resources at the high
priority targets such as Pacheca and Cubas near Pilar. The
remaining $2.0 million will be
distributed towards other growth targets in and around the existing
core assets.
- Jaguar provided an update on its Exploration Growth Program and
announced the acquisition of a new strategic land position (see
news release dated June 21, 2017)
located 4.5 km west of the Caeté Mill, increasing the total
registered RG Mine concession by 1,000 hectares. The Company
believes that the expanded land position, adds significant value to
the overall RG concession area as it is strategically located just
west of the RG Mine, and contains 7.5 km of contiguous Banded Iron
Formation ("BIF") as well as a large number of historic Portuguese
workings from the late 17th and 18th
centuries.
-
- At Pilar, the deep horizon exploration drive in the hanging
wall of the mine at Level 7-4 is now complete, with three contract
diamond drills currently in operation. The drilling program is
designed to extend resources targeting Levels 11-16 up to 350 m
below current development and 250 vertical m below the current
Inferred Resources. The program will test the down-plunge extension
and continuity of Orebodies BFII, BF, and BA. Drilling
results for this program will be announced in the second half of
2017. It is expected that the drilling results will add to the
Mineral Reserves and Mineral Resources of Pilar, which are expected
to be updated in early Q1 2018.
- At Turmalina, the deep horizon exploration platform on Level
10-1 is now complete. Diamond drilling from the platform is
intended to reach Levels 12-16, up to 420 vertical m below the
current development and 300 m below the current Inferred Resources.
Currently one contracted underground exploration drill has been set
up and up to three additional contracted underground exploration
drills will be moved from Pilar to Turmalina to complete deep
drilling once the exploration program is completed at Pilar.
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 192,000 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.
- 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 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 June 30,
2017 is set out in the Company's second quarter 2017
MD&A filed on SEDAR
at www.sedar.com.
- 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 June 30, 2017 is set out in the
Company's second quarter 2017 MD&A filed on SEDAR
at www.sedar.com.
Rodney Lamond, President &
Chief Executive Officer, rodney.lamond@jaguarmining.com,
416-847-1854; Joanne Jobin, Vice
President, Investor Relations, joanne.jobin@jaguarmining.com,
416-847-1854