TORONTO, July 12, 2018 /PRNewswire/ -- Jaguar Mining
Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced
operating results for the second quarter ("Q2 2018") ended
June 30, 2018. All figures are in US
dollars, unless otherwise expressed. Detailed financial results for
Q2 2018 will be reported and filed on or before August 15, 2018.
Q2 2018 Key Highlights
- Q2 2018 consolidated gold production of 18,819 ounces (171,600
tonnes milled), average feed grade of 3.77 g/t, up 19%
year-over-year, including record performance at Pilar Gold Mine
("Pilar").
- Pilar record gold production of 10,995 ounces, up 43%, higher
average grade of 4.03 g/t, up 28% year-over-year.
- Turmalina Gold Mine
("Turmalina") gold production of 7,824 ounces, decreased 28%;
production expected to increase in second half of 2018 as
accelerated primary waste development advances.
- Primary waste development up 47% at Turmalina, to 740 metres,
focused on significant advancement of accelerated development to
access additional high-grade sub-levels for increased
production.
- Preliminary cash costs improved 17% to $713 per ounce sold year-over-year and 11% from
Q1 2018. Pilar cash costs $678 per
ounce sold, decreased 34%, driving higher margin per ounce and cash
flow.
- Preliminary cash balance of $11.1
million as of June 30, 2018,
includes approximately $3.5–$4
million in operating cash flow and $6
million invested in growth activities.
- The Company replaced its fully secured Sprott Resource Lending
loan with an unsecured credit facility with Auramet.
Rodney Lamond, President and
Chief Executive Officer commented, "We have made solid progress
with our operating results in the first half of 2018 which include
record production at Pilar, increasing average grade as per
expected levels and significantly higher primary and secondary
development combined to increase future production levels. Our 17%
lower operating cash costs enabled us to generate strong operating
cash flow and continue investing in our growth exploration programs
that will drive strong performance going forward. Pilar continues
to demonstrate tremendous upside. We now expect lower operating
cash costs per ounce sold. We also repaid approximately
$4 million of debt in the first half
of 2018 and converted our fully secured Sprott Resource Lending
loan to an unsecured, lower cost credit facility with Auramet."
"We are extremely pleased to have restarted operations following
the end of the national truck driver labour strike, which reduced
production by approximately 2,500 ounces in the second quarter.
Looking ahead, while Pilar remains firmly on track due to strong
grade performance exceeding expectations so far this year, the
slower than expected ramp up at Turmalina will result in lower
production in 2018. At Turmalina, we continue to take a systematic
approach to rebuilding its production profile to prior historical
levels. Our top priority is to ensure we continue to complete
critical primary and secondary development over the next 6 to 12
months that will enable us to access higher grade sub-levels, drive
stoping, increase future production and meet our targets for
2018."
2018 Second Quarter Operating Results
|
|
|
Quarterly
Summary
|
Q2
2018
|
Q2
2017
|
Turmalina
|
Pilar
|
Roça
Grande1
|
Total
|
Turmalina
|
Pilar
|
Roça
Grande
|
Total
|
|
Tonnes milled
(t)
|
77,227
|
94,377
|
-
|
171,604
|
112,122
|
85,209
|
19,353
|
216,684
|
|
Average head grade
(g/t)
|
3.46
|
4.03
|
-
|
3.77
|
3.37
|
3.16
|
2.15
|
3.18
|
|
Recovery
(%)
|
91.1%
|
89.8%
|
-
|
90.4%
|
91.0%
|
90.3%
|
90.3%
|
90.7%
|
|
Gold
ounces
|
|
|
|
|
|
|
|
|
|
Produced
(oz.)
|
7,824
|
10,995
|
-
|
18,819
|
10,870
|
7,702
|
1,197
|
19,768
|
|
Sold (oz.)
|
7,610
|
9,620
|
-
|
17,230
|
10,815
|
6,625
|
1,013
|
18,453
|
|
Cash Operating
Costs2
|
757
|
678
|
-
|
713
|
695
|
1,032
|
1,438
|
856
|
|
Development
|
|
|
|
|
|
|
|
|
|
Primary
(m)
|
740
|
537
|
-
|
1,277
|
504
|
218
|
102
|
824
|
|
Secondary
(m)
|
302
|
275
|
-
|
578
|
292
|
577
|
120
|
989
|
|
Definition,
infill, and
exploration drilling (m)
|
5,623
|
3,141
|
-
|
8,763
|
4,677
|
6,206
|
186
|
11,068
|
|
1.
|
Roça Grande mine
placed on care and maintenance in Q1 2018.
|
2.
|
Cash Operating Cost
is a non-IFRS reporting measure.
|
Cash Position and Use of Funds
- Cash balance of approximately $11.1
million as of June 30, 2018,
compared to a cash balance of $14.3
million at March 31,
2018.
- Company generated approximately $3.5–$4 million in operating cash flow with
approximately $6 million invested in
growth activities.
Agreement to Replace Sprott Resource Lending Credit
Facility
- The Company reached an agreement for a new $7 million lower cost unsecured credit facility
(the "Credit Facility") with Auramet to replace the Company's
higher cost "Secured" Loan facility with Sprott Resource Lending
effective June 30, 2018.
- The Credit Facility is in the form of a gold purchase and sale
agreement whereby Auramet has extended up to $7 million to Jaguar. As part of the agreement,
the Company is required to maintain a $2
million deposit with Auramet. Funds advanced under the
Credit Facility are subject to interest at 1-month LIBOR + 7.5%, as
well a covenant to maintain a minimum net cash balance of
$5 million, including the
deposit.
Second Quarter 2018 Operating Summary
Pilar Gold Mine
- Production increased 43% to 10,995 ounces compared to Q2 2017,
and 15% compared to Q1 2018, on average grade of 4.03 g/t, which
increased 28% year-over-year.
- Record production of 4,639 ounces in June with record average
grade of 4.76 g/t with Cash Operating Costs ("COC") of
approximately $532 per ounce
sold.
- As expected, Pilar continues to deliver improved grade and
tonnes milled as mining moves forward into the higher-grade
extensions to the principle banded iron formation orebodies (BFII,
BF, and BA) also reflected in increased Pilar's latest measured and
indicated mineral resources.
- Total tonnes milled of 94,377, up 16% compared to Q1 2018 of
81,000 tonnes. Pilar milled the highest level of tonnes in June,
more than 32,000 tonnes, as the mine restarted mining activities
post a national truck driver strike in May.
- Recovery of 89.8% was slightly lower compared to Q2 2017;
however, June recovery improved to 90.4%, the highest recovery
level achieved over the last year. Recovery is expected to remain
strong going forward as grades continue to increase.
- Total development of 813 m, with
537 m of primary development, 4.4%
increase over 778 m of development in
Q1 2018 due to a focus on high-speed ramp development.
- During the second quarter, Pilar increased stoping inventory to
half a month production as long-hole drilling performance was
improved as a result of higher long-hole fan-drill availability
compared to Q1 2018.
- Pilar cash costs of $678 per
ounce sold, decreased 34%, driving higher margin per ounces and
cash flow.
Turmalina Gold Mine
- Production declined 28% to 7,824 ounces compared to 10,870
ounces in Q2 2017, and down 7% from 8,442 ounces in Q1 2018 due in
part to a national truck driver labour strike that suspended mining
activities that deferred critical tonnes, as well as
development.
- Production levels are expected to increase in H2 2018 as
accelerated primary waste development advances.
- COC decreased to $757 per ounce
sold, a 2% improvement from $777 per
ounce sold in Q1 2018 as cost control and reduction remains a key
focus. Costs will continue to improve as Turmalina production
continues to ramp up in the second half of 2018.
- Primary waste development increased 47% during the quarter to
740 m compared to 504 m in Q2 2017 and 648
m in Q1 2018. The focus in H1 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 key focus at both Turmalina and Pilar has been grade control
to ensure consistency and quality ounce production. At Turmalina,
grade control interventions have been progressing since the
beginning of 2018. Focus areas for these interventions include
sampling and short-term grade-geology modeling (tied into mine
mapping programs), strict stope designs based on geology and grade,
cut-off and dilution parameters and tracking of material from
stope, stockpiles and plant feed. Early results have been
encouraging with evidence for reduced grade-tonnage variances
between predictive grade models and plant feed reconciliations as
well as gold produced versus planned reconciliations.
Second Quarter 2018 Exploration Highlights
Turmalina reported results from 13 growth exploration drill
holes targeting down dip extensions to Orebody C below Level 3
which confirmed continuity of gold mineralization beyond Level 8,
300 m below current operations (see
press release June 18, 2018).
These drill results included several very high grade, wide drill
intercepts with Grade x Thickness values > 30 including 7.77 g/t
Au over 4.50 m (ETW 4.25 m), 9.22 g/t Au over 5.85 m (ETW 5.11 m)
and 4.91 g/t Au over 15.10 m (ETW
(14.65 m). These intercepts reflect
the down plunge extensions of the central high-grade payshoot
currently being-accessed for mining on Levels 3 and 4. Four drill
intercepts with Grade x Thickness values > 10 GM were also
reported.
Soil sampling grids in conjunction with detailed surface
geological mapping and outcrop sampling were completed over the
Zona Basal Target at Turmalina and the Pacheca North and Pilarzinho
targets close to Pilar during the quarter. Results received to date
have been encouraging from all three targets with several strong,
strike consistent gold and pathfinder element in soil anomalies
being defined worthy of follow-up infill sampling and
trenching.
At Pedra Branca in Ceará, surface geological mapping over
selected historical and newly defined targets has aided the
compilation of new data and revision of historical geological data
into an updated geological-structural map for the core area of the
extensive tenement package held by Jaguar. Re-opening and
re-sampling of trenches over several priority targets was completed
during the quarter and this data, along with new mapping and
sampling, will inform a full review of this project, the results of
which will be used to design future exploration work and focus in
the area.
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 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.
- 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.
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