Jaguar Mining Reports Q1 2018 Financial Results; Increasing Cash Flow and on Track to Achieve Gold Production Guidance of 90,000-105,000 Ounces in 2018

Jaguar Mining Reports Q1 2018 Financial Results; Increasing Cash Flow and on Track to Achieve Gold Production Guidance of 90,000-105,000 Ounces in 2018

PR Newswire

TORONTO, May 10, 2018

TSX: JAG

TORONTO, May 10, 2018 /PRNewswire/ -- Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced financial results for the three months ended March 31, 2018 ("Q1 2018"). All figures are in US dollars, unless otherwise expressed. Detailed financial results for Q1 2018 are available on www.sedar.com.

Jaguar Mining Inc.

Q1 2018 Financial Highlights

Rodney Lamond, President and Chief Executive Officer, Jaguar Mining commented, "Our continued focus on cost control, productivity and company-wide operational excellence programs has delivered strong operating cost performance in the first quarter, where we saw a significant increase in our operating cash flow. Lower consolidated cash operating costs improved 13% to $800 per ounce sold, AISC improved 3% to $1,289 per ounce sold, which puts us on track to achieve our 2018 cost guidance, especially when factoring significantly lower costs relative to suspended operations at our higher cost Roça Grande Mine.

"Our strategy over the last 24 months has been to deploy capital only towards high priority exploration projects and initiatives that will provide the best return and add to our large mineral resource base to grow our long-term sustainable gold production. We have seen the benefits of these investments. Pilar Gold Mine is continuing to grow its production base, and we expect to see increasing production at Turmalina Gold Mine by the second half of 2018."

"Moving forward, we continue to focus on mining quality ounces and delivering on our 2018 gold production and cost guidance, including higher production in the second half of this year. With lower unit costs and increasing production, at current gold prices, we are well positioned to see strong cash flow generation, which we will continue to prioritize towards investments in sustainable growth activities, development and reducing bank debt."

Q1 2018 FINANCIAL & OPERATING SUMMARY



($ thousands, except where indicated)

For the three months ended
March 31,


2018

2017

Financial Data



Revenue

$

25,228

$

29,192

Operating costs

15,399

21,508

Depreciation

4,885

6,576

Gross profit

4,944

1,108

Net loss

(1,781)

(7,877)


Per share ("EPS")

(0.01)

(0.03)

EBITDA1

4,154

743


Adjusted EBITDA1,2

5,573

4,211


Adjusted EBITDA per share1                                                                                                   

0.02

0.01

Cash operating costs (per ounce sold)1

800

924

All-in sustaining costs (per ounce sold)1

1,289

1,323

Average realized gold price (per ounce)¹

1,311

1,215

Cash generated from operating activities

4,979

1,855

Free cash flow1

(1,688)

(4,177)

Free cash flow (per ounce sold)1

(88)

(174)

Sustaining capital expenditures1

6,667

6,032

Non-sustaining capital expenditures1

493

873

Total capital expenditures

7,160

6,905

1 Average realized gold price, sustaining and non-sustaining capital expenditures, cash operating costs and all-in sustaining costs, adjusted
operating cash flow, free cash flow, EBITDA and adjusted EBITDA, and adjusted EBITDA per share are non-IFRS 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.


For the three months ended
March 31,


2018

2017

Operating Data



Gold produced (ounces)

18,865

22,292

Gold sold (ounces)

19,237

24,034

Primary development (metres)

1,069

910

Secondary development (metres)

447

1,382

Definition, infill, and exploration drilling (metres)

9,439

11,864

 

Cash Position, Working Capital and Foreign Exchange

First Quarter 2018 – Operating Results Summary

First Quarter 2018 – Projects Update

First Quarter 2018 – Exploration Highlights

Year-End 2017 Pilar Gold Mine Mineral Reserves and Mineral Resources Highlights

Interim Year-End 2017 Turmalina Gold Mine Mineral Resources Highlights

2018 Guidance





2018 Production & Guidance cost

 Turmalina

 MSOL

 Consolidated

Pilar

 Roça Grande

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.

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 quarter ended March 31, 2018, is set out in the Company's first quarter 2018 Management Discussion and Analysis (MD&A) filed on SEDAR at 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 quarter ended March 31, 2018, is set out in the Company's first quarter 2018 MD&A filed on SEDAR at www.sedar.com.

 

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

 

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