TORONTO, Sept. 18, 2017 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX:JAG) is pleased to announce
that it has entered into an accelerated earn-in agreement (the
"Agreement") with Avanco Resources Limited ("Avanco") (ASX:AVB),
pursuant to which Avanco will earn up to a 100% ownership interest
in the Gurupi Project ("Gurupi" or the "Project") after meeting
some short-term milestones and making a series of payments to
Jaguar. The Project is located in the state of Maranhão,
Brazil, and includes the Cipoeiro
and Chega Tudo deposits found in a mainly unexplored 72-kilometre
trend. Jaguar, through a wholly-owned subsidiary, holds mineral
concessions totaling 140,332 hectares. The last feasibility study
on the Project was prepared on January 31,
2011, by TechnoMine Services LLC, which is filed under the
Company's profile on SEDAR (www.sedar.com).
Main Terms of the Accelerated Earn-in Agreement
Upon the satisfactory completion of certain closing conditions,
the Agreement provides Avanco with the right to earn 100% of
Jaguar's interest in the Project by paying to Jaguar an aggregate
cash payment of US$4 million in two
instalments of US$2 million each.
Upon achieving clear title and access to the Project, Jaguar will
receive in aggregate an additional US$5
million of cash payments, received in a series of 10
instalments of US$500,000 per month.
The majority of the Avanco US$9
million in payments are expected to be paid to Jaguar in
2017 and 2018 fiscal years.
Within 24 months of the initial US$4
million payment, Avanco will arrange to have published an
Australian Joint Ore Reserve Committee (JORC) code compliant
technical report completed regarding the Project with mineral
reserves in excess of 500,000 ounces of gold. Any delay in this
milestone will result in a project delay fee payable to Jaguar of
US$250,000 per six months of delayed
period. Within 60 months of the initial US$4
million payment, Avanco will aim to commission the Gurupi
mine and plant. Any delay in this commissioning milestone will
result in a separate project delay fee payable to Jaguar of
US$250,000 per six months of delayed
period.
Consistent with the original earn-in agreement, Jaguar will
retain a life of mine Net Smelter Return ("NSR") royalty
("Royalty") from production at Gurupi. The Royalty will be 1% NSR
on the first 500,000 ounces of gold or gold ounce equivalents sold;
2% NSR on sales from 500,001 to 1,500,000 ounces of gold or gold
ounce equivalents; and 1% NSR on gold sales exceeding 1,500,000
ounces of gold or gold ounce equivalents.
The Agreement will provide Avanco with control over the Project
earlier than planned in the previous earn-in agreement, empowering
Avanco to move the asset into production in a timely and expedited
manner. Cash proceeds received by Jaguar from this accelerated
Agreement will be used to repay the Company's higher-cost Brazilian
debt facility, improve working capital, and reduce its financing
repayment obligations in 2017 and 2018.
Rodney Lamond, President and
Chief Executive Officer of Jaguar commented, "We are pleased to
announce an accelerated earn-in agreement with Avanco that should
result in the development and commissioning of a mine at the Gurupi
Project earlier than anticipated. This Agreement provides Jaguar
with accelerated cash payments while retaining the significant
exploration upside potential this property possesses through the
life of mine NSR Royalty. The cash proceeds from Avanco will be
applied immediately towards reducing the Company's higher-cost
Brazilian debt facility, improving working capital, and
strengthening our balance sheet. We are pleased with the recent
improvements in the Company's mine operations which continue to
generate operating cash flow. Today's announcement provides
additional confidence that the Company is expected to maintain a
positive working capital position going forward."
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 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, which
combined produce approximately 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.
About Avanco Resources Ltd.
Avanco is a Brazilian
focused mining exploration and development company, targeting
exploration and near- term production from copper and gold
projects. Avanco's Board of Directors and Management team have
extensive global resource industry experience, particularly in
Northern Brazil where they have
recently commissioned the Antas copper-gold mine on-schedule and
under budget. Avanco has offices in Perth, Australia; Rio de Janeiro, Brazil; and Parauapebas,
Brazil.
Forward-Looking Statements
Certain statements in this press 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 press release contains forward-looking information
regarding (1) the expectations regarding whether a transaction will
be consummated, including whether conditions to the consummation of
the transactions will be satisfied, or the timing for completing
the transaction, (2) expectations for the effects of the
transaction or the ability of the Company to successfully achieve
business objectives, including the effects of unexpected costs,
liabilities or delays, and if the transaction is completed, the
ability of the Company to allocate the net proceeds as stated
above, and (3) expectations for other economic, business, and/or
competitive factors. Forward-looking information involves a number
of known and unknown risks and uncertainties, which, if incorrect,
may cause actual results to differ materially from those
anticipated by the Company, including, without limitation, the
risks that the transaction as described in the Agreement may not be
completed and the parties may be unable to realize on the
anticipated benefits of the transaction. 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 press 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 press
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 press
release is expressly qualified by this cautionary statement.
CONTACT: Rodney Lamond, President
& Chief Executive Officer, Jaguar Mining Inc.,
rodney.lamond@jaguarmining.com, 416-847-1854; Hashim Ahmed, Chief Financial Officer, Jaguar
Mining Inc., hashim.ahmed@jaguarmining.com, 416-847-1854