TSX: JAG
TORONTO, April 17, 2018 /PRNewswire/ -- Jaguar Mining
Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced
operating results for the first quarter ("Q1 2018") ended
March 31, 2018. All figures are in US
dollars, unless otherwise expressed. Detailed financial results for
Q1 2018 will be reported and filed on or before May 10, 2018.
Q1 2018 Summary
- Consolidated gold production of 18,864 ounces (174,000 tonnes
milled at 3.67 g/t) was in line with the Company's 2018 production
plan; Q1 2018 production was lower than the 22,291 ounces (214,000
tonnes milled at 3.50 g/t) in Q1 2017.
- Pilar Gold Mine ("Pilar")
production increased 13% to 9,553 ounces compared to Q1 2017, and
17% compared to Q4 2017 on average grade of 4.08 g/t, which
increased 20% year-over-year. Pilar continues to deliver improved
grade and tonnes milled. Pilar's lower cost per ounce production
replaces the higher cost Roça Grande Mine ("RG") production, also
improving operating cash flow.
- Turmalina Gold Mine
("Turmalina") production of 8,442 ounces was 34% lower
year-over-year due to a focus on increasing primary (waste)
development to facilitate increased ore production for the balance
of 2018. This resulted in lower secondary ore development and lower
tonnes milled for the quarter which reduced ore production, which
was in line with the Company's projected annual mine plan.
Production levels are expected to increase in Q2 2018 and
significantly increase in H2 2018 as accelerated primary waste
development advances.
- Turmalina primary waste development increased 77% during the
quarter to 648 metres compared to 366 metres in Q1 2017 and 363
metres in Q4 2017. The focus in Q1 2018 was to extensively advance
accelerated development to access higher-grade mineralization in
Level 11 at Orebody A and Level 4 at Orebody C. A new total of four
production sublevels are expected to contribute to production in Q2
2018.
- Consolidated cash operating costs ("COC") decreased to
$814 per ounce sold, a 12%
improvement from Q1 2017 and 10% increase from Q4 2017. Company on
track to deliver 2018 COC annual guidance between $700–$800 per
ounce sold.
- Strengthened operations and project management teams to drive
increased productivity and overall performance. Placed orders for
new mining equipment to increase capacity and productivity at
Turmalina and Pilar.
- Cash balance of approximately $14.3
million as of March 31, 2018,
compared to a cash balance of $18.6
million at December 31, 2017.
Cash outflow during the quarter includes $3
million financing repayments reducing total bank debt to
approximately $12.3 million at
quarter end. Company generated approximately $4–5 million in
operating cash flow with approximately $6
million spent in investing and growth activities.
Rodney Lamond, President and
Chief Executive Officer commented, "We have successfully
established a large mineral resource at Pilar and Turmalina as a
direct result of our strategic investments in Growth Exploration
programs, underground mine development and upgrading mining
equipment. These investments demonstrate our commitment to growing
sustainable gold production over the long-term. Through our
investments, we have unlocked significant value at Pilar and its
performance is increasing our ability to grow operating and free
cash flow. Based on Pilar's performance to date, we believe there
continues to be excellent upside potential. We are taking the same
approach to unlocking the deep value that we believe exists at
Turmalina, which is also supported by its mineral resource."
"Pilar's first quarter operating results, including a 13%
year-over-year increase in gold production driven by a 20% increase
in head grade, are positively impacting our overall profitability
and generating increased returns. This performance was achieved
through targeted exploration programs, development and training of
operations teams, disciplined capital allocation and operational
excellence. The confidence in delivering increased gold production
supported the Company's decision to place Roça Grande temporarily
on care and maintenance. This decision will further decrease the
Company's COC by displacing high gold ounces with Pilar's lower COC
ounces."
Mr. Lamond continued, "In addition to the excellent ongoing work
completed by our operations teams, during the quarter we
successfully transitioned to a new mining contractor to increase
high speed development at Turmalina. We completed key development
objectives to access higher grade pay-shoots in Orebodies A and C.
Primary waste development increased 77% during the quarter, the
highest level since Q2 2016. The extensive accelerated development
will continue to increase as key access drives are advanced into
higher-grade mineralization in Level 11 at Orebody A and Level 4 at
Orebody C. A new total of four production sublevels are expected to
contribute to production in Q2 2018. To further support production
and drive increased annual production, we have purchased two new
underground loaders and one 30-tonne underground haulage truck for
Turmalina."
Mr. Lamond concluded, "Looking ahead, we are positioned to
deliver stronger production in the second half of 2018 as we expect
to see higher production at Turmalina, as well as higher production
at Pilar. Ongoing infill drilling on Orebody A and C at Turmalina
has demonstrated continued high-grade mineralization in upcoming
sublevels for mining, which is expected to significantly increase
production. Our strategy for sustainable production, which starts
with a fundamental understanding of our geological models, aims to
extend the reserve mine life at all of our operations by replacing
depleted Mineral Resources in a timely manner through the execution
of targeted exploration programs. We have also made important
staffing changes at our sites to ensure we deliver on our
productivity and efficiency targets to achieve our 2018 objectives.
We continue to focus on mining quality ounces to generate cash
flow, sustain future growth and reduce our bank debt."
2018 First Quarter Operating Results Summary
|
|
|
Quarterly
Summary
|
Q1
2018
|
Q1
2017
|
Turmalina
|
Pilar
|
Roça
Grande
|
Total
|
Turmalina
|
Pilar
|
Roça
Grande
|
Total
|
Tonnes milled
(t)
|
81,000
|
81,000
|
12,000
|
174,000
|
113,000
|
84,000
|
17,000
|
214,000
|
Average head grade
(g/t)
|
3.43
|
4.08
|
2.52
|
3.67
|
3.79
|
3.39
|
2.12
|
3.50
|
Recovery %
|
91%
|
89%
|
89%
|
90%
|
91%
|
91%
|
91%
|
91%
|
Gold
ounces
|
|
|
|
|
|
|
|
|
Produced
(oz)
|
8,442
|
9,553
|
870
|
18,864
|
12,736
|
8,485
|
1,070
|
22,291
|
Sold (oz)
|
8,414
|
9,929
|
894
|
19,237
|
13,536
|
9,422
|
1,076
|
24,034
|
Preliminary
Financial Data
|
|
|
|
|
|
|
|
|
Cash Operating
Costs1 ($/oz)
|
777
|
809
|
1,216
|
814
|
738
|
1,092
|
1,787
|
924
|
Development
|
|
|
|
|
|
|
|
|
Primary
(metres)
|
648
|
422
|
84
|
1,154
|
366
|
470
|
74
|
910
|
Exploration
(metres)
|
-
|
-
|
-
|
-
|
104
|
13
|
34
|
151
|
Secondary
(metres)
|
91
|
356
|
-
|
447
|
754
|
614
|
14
|
1,382
|
Definition,
infill, and exploration drilling (metres)
|
5,544
|
3,197
|
613
|
9,354
|
4,164
|
5,218
|
567
|
9,949
|
1.
|
Cash Operating Cost
is a non-IFRS reporting measure.
|
Cash Position and Working Capital
- Cash balance of approximately $14.3
million as of March 31, 2018,
compared to a cash balance of $18.6
million at December 31, 2017.
Cash outflow during the first quarter includes $3 million for financing repayments reducing
total bank debt to approximately $12.3
million at the end of Q1 2018.
- Company generated approximately $4–$5 million in operating cash
flow with approximately $6 million
spent in investing activities. Working capital expected at $11–$12
million as March 31, 2018.
First Quarter Operating and Project Update
- Operational excellence programs continue to be adopted Company
wide. A key focus has been to improve data collection processes to
deliver real time data that facilitates timely analysis and
decision making.
- Turmalina management changes have been completed and the focus
is on operational efficiency, productivity and cost reduction on
projects, including improving preventative maintenance and
equipment availability.
- At Pilar and Turmalina, operational excellence teams are
focused on increasing haulage tonnes moved in the mine and
development metres utilizing equipment within the same shift to
improve recovery and increase productivity.
- Restructured projects group to streamline the management of
Growth and Capital Projects.
- Turmalina paste fill plant completed final commissioning tests
and is expected to be operational in Q2 2018.
First Quarter 2018 Exploration Highlights
- Growth exploration at Turmalina has focused on depth extension
drilling of Orebody C below level 4. Drilling completed to date
includes approximately 4,826 metres (20 drill holes) representing
approximately 53% completion of the 9,050 metres planned growth
program.
- Additional exploration activities are focused on advancing key
near mine targets including the Zona Basal Target at Turmalina, the
Torre, Pacheca North and Pilarzinho Targets contiguous to the Pilar
mining operation and at Pedra Branca in Ceara State.
- Subsequent to the temporary halt of mining activities at the RG
Mine, exploration potential is being reviewed aimed at prioritizing
future activities targeting extensions to the known RG orebodies
and the Company's highly prospective greater tenement package
supported by the CCA Plant.
2018 Guidance
- Pilar production guidance of 39,200–47,000 ounces reflects the
Company's reforecast for increased mineral resources reported in
March 2018. The Pilar production is
expected to offset the temporary halted production ounces from
RG.
- RG performance reflects production from January 1–March 21,
2018. RG temporarily on care and maintenance.
- Turmalina positioned and expected to deliver significantly
higher production in second half of 2018.
|
|
|
|
|
2018 Production
& Guidance cost
|
Turmalina
|
CCA
|
Consolidated
|
Pilar
|
RG
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Gold production
(oz.)
|
50,000
|
57,000
|
39,200
|
47,000
|
800
|
1,000
|
90,000
|
105,000
|
Cash Operating
Cost1 ($/oz. sold)
|
675
|
775
|
650
|
800
|
1,000
|
1,100
|
660
|
800
|
All-in sustaining
cost1 ($/oz. sold)
|
900
|
1,000
|
900
|
1,050
|
1,050
|
1,200
|
920
|
1,100
|
Sustaining Capex
($'000)
|
12,000
|
15,000
|
9,000
|
12,000
|
100
|
500
|
21,000
|
28,000
|
Development
|
|
|
|
|
|
|
|
|
|
Primary waste
(metres)
|
2,200
|
2,800
|
2,000
|
2,600
|
N/A
|
N/A
|
4,500
|
5,400
|
|
Secondary ore
(metres)
|
1,800
|
2,100
|
1,000
|
1,150
|
N/A
|
N/A
|
3,000
|
3,500
|
Definition, infill
and exploration drilling (metres)
|
18,000
|
25,000
|
14,000
|
20,000
|
200
|
300
|
32,000
|
45,000
|
1.
|
Cash Operating Cost
and All-in Sustaining Cost are non-IFRS reporting
measures.
|
Qualified Persons
Scientific and technical information contained in this press
release has been reviewed and approved by Jonathan Victor Hill, BSc (Hons) (Economic
Geology - UCT), Senior Expert Advisor Geology and Exploration to
the Jaguar Mining Management Committee, who is also 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 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 64,000
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
Mining Complex (Pilar and Roça Grande
Mines, and Caeté Plant). The Company also owns the Paciência
Gold Mine Complex, which has been on care and maintenance since
2012. The Roça Grande Mine has been on temporary care and
maintenance since April 2018.
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 is
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 involves 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,
labour 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, procurement fraud
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 below 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 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,
2017, is set out in the Company's fourth quarter 2017
Management Discussion and Analysis (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 December 31,
2017, is set out in the Company's fourth quarter 2017
MD&A filed on SEDAR at www.sedar.com.
For further information: 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