TSX: JAG
TORONTO, Aug. 15, 2018 /PRNewswire/ -- Jaguar
Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) today
announced financial results for the three and six months ended
June 30, 2018 ("Q2 2018"). All
figures are in US dollars, unless otherwise expressed. Detailed
financial results for Q2 2018 are available on
www.sedar.com and on the Company's website
www.jaguarmining.com.
Q2 2018 vs. Q2 2017 Financial Highlights
- Strong operating cost performance drives 139% increase in gross
profit to $6.1 million on lower
revenue of $22.9 million.
- Consolidated cash operating costs ("COC") improved 16% to
$717 per ounce of gold sold.
- Consolidated all-in sustaining costs ("AISC") increased 1% to
$1,277 per ounce of gold sold
reflecting strong investment in Turmalina
Gold Mine ("Turmalina").
- Consolidated gold production of 18,819 ounces, compared to
19,769 ounces in Q2 2017. Q2 2018 average feed grade was 3.77 g/t
compared to 3.18 g/t for the comparative period.
- Strong operating cash flow of $4.5
million, significantly higher compared to $0.2 million for the comparative period.
- Sustaining capital expenditures of $7
million in Q2 2018, up 52% from $4.6
million in Q2 2017, investing in key primary development and
new mining equipment.
- Adjusted EBITDA of $5.3 million,
up 43% from $3.7 million from
comparative period.
- Cash balance of $9.2 million as
of June 30, 2018, including
$1 million financing repayments,
reducing total bank debt to approximately $12.3 million at quarter end.
- Company revises 2018 production guidance to 80,000 – 85,000
ounces. Pilar continues to perform well and is on track to meet its
production guidance. Turmalina production is expected to be below
guidance, as management continues to address the operational issues
through the remainder of 2018.
Q2 2018 FINANCIAL & OPERATING SUMMARY
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Financial and
Operational Highlights
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|
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($ thousands, except
where indicated)
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For the three
months ended
June
30,
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For the six months
ended
June
30,
|
|
2018
|
2017
|
2018
|
2017
|
Financial
Data
|
|
|
|
|
Revenue
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$
|
22,888
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$
|
23,352
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$
|
48,116
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$
|
52,544
|
Operating
costs
|
12,356
|
15,990
|
27,755
|
37,498
|
Depreciation
|
4,407
|
4,796
|
9,293
|
11,372
|
Gross
profit
|
6,125
|
2,566
|
11,068
|
3,674
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Net (loss)
|
(1,334)
|
(3,323)
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(3,115)
|
(11,200)
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|
Per share
("EPS")
|
(0.00)
|
(0.01)
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(0.01)
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(0.04)
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EBITDA1
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4,262
|
3,709
|
8,417
|
4,452
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Adjusted
EBITDA1,2
|
5,303
|
3,712
|
10,876
|
7,923
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|
Adjusted EBITDA per
share1
|
0.02
|
0.01
|
0.03
|
0.03
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Cash operating costs
(per ounce sold)1
|
717
|
857
|
761
|
895
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All-in sustaining
costs (per ounce sold)1
|
1,277
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1,262
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1,283
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1,296
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Average realized gold
price (per ounce)1
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1,328
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1,266
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1,319
|
1,237
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Cash generated from
operating activities
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4,460
|
216
|
9,438
|
2,071
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Adjusted operating
cash flow1
|
6,910
|
4,391
|
12,223
|
8,553
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Free cash
flow1
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(2,501)
|
(4,361)
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(4,191)
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(8,538)
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Free cash flow (per
ounce sold)1
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(145)
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(236)
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(115)
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(201)
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Sustaining capital
expenditures1
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6,961
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4,577
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13,629
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10,609
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Non-sustaining
capital expenditures1
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592
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1,390
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1,600
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2,263
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Total capital
expenditures
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7,553
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5,967
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15,229
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12,872
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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, adjusted EBITDA per share, and gross profit (excluding
depreciation) 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.
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|
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.
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For the three
months ended
June
30,
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For the six months
ended
June
30,
|
|
2018
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2017
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2018
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2017
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Operating
Data
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Gold produced
(ounces)
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18,819
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19,769
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37,684
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42,061
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Gold sold
(ounces)
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17,230
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18,453
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36,467
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42,487
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Primary development
(metres)
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1,277
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824
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2,347
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1,734
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Secondary development
(metres)
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578
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989
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1,025
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2,370
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Definition, infill,
and exploration drilling (metres)
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8,763
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11,069
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18,204
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22,933
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Cash Position, Working Capital and Foreign Exchange
- As at June 30, 2018, the Company
had a cash position of $9.2 million,
compared to $18.6 million as at
December 31, 2017. The June 30, cash balance excludes the $2 million of cash deposit with Auramet. The
lower cash balance compared to the end of 2017 reflects
$15.22 million in total Capital
Expenditures and lower gold sales that declined 14% in the first
six months ended June 30, 2018.
- Working capital was $4 million as
at June 30, 2018, compared to
$14.1 million as at December 31, 2017. Working capital reduction is
mainly due to the replacement of the Sprott Resource Lending
facility with Auramet Facility, as the latter is classified as
short term.
Financial Summary Highlights
- Revenue for Q2 2018 decreased 2% to $22.9 million (17,230 ounces), compared with
$23.4 million (18,453 ounces) in Q2
2017, due to a 7% decrease in ounces sold, offset by 5% higher
average gold realized price of $1,328
in Q2 2018 compared with $1,266 in Q2
2017.
- Gross profit for the three and six months ended June 30, 2018, was $6.1
million and $11.1 million,
respectively, compared to $2.6
million and $3.7 million for
Q2 2017 and YTD 2017, mainly attributed to reduction in cash
operating costs.
- Adjusted EBITDA for Q2 2018 was $5.3
million compared to $3.7
million for Q2 2017, while adjusted EBITDA for the first
half of 2018 was $10.9 million
compared to $7.9 million in the first
half of 2017.
Cash Operating Costs, Capital Expenditures and
All-In-Sustaining Costs ("AISC")
- Cash operating costs decreased 16% to $717 per ounce of gold sold for Q2 2018, compared
to $857 per ounce sold during Q2
2017, primarily due to operational excellence measures and the 12%
weakening of the Brazilian Real. AISC increased 1% to $1,277 per ounce of gold sold in Q2 2018,
compared to $1,262 per ounce sold
during Q2 2017.
- In Q2 2018, sustaining capital increased 52% to $7 million focused on primary development and
exploration drilling, compared to $4.6
million in Q2 2017. Operating cash flow was $4.5 million for Q2 2018, compared to
$0.2 million in Q2 2017, mainly due
to the decrease in cash costs of 16%, or $140 dollars per ounce.
2018 Revised Guidance
- Company revises 2018 production guidance to 80,000 – 85,000
ounces. Pilar continues to perform well and is on track to meet its
production guidance.
- Turmalina production is expected to be below guidance, as
management continues to address the operational issues through the
remainder of 2018.
Management Change
The Company also announces that Rodney
Lamond is leaving his position as CEO and director of
Jaguar. Benjamin Guenther has been appointed as Interim Chief
Executive Officer effective immediately. Mr. Guenther was
appointed to the Board of Jaguar Mining in November 2017 and is the Chairman of the
Technical Committee of the Board. He is a mining engineer with
a wide range of management and executive experience and over 40
years in the mining industry. Mr. Guenther held Senior
Management Positions with AngloGold Ashanti in his past career
including a long association with mining in Brazil. Mr. Guenther graduated from the
Colorado School of Mines. The Company
plans to start a search for the permanent position of the CEO.
"On behalf of the entire team, we would like to extend our
thanks to Rodney for his commitment to Jaguar Mining over the past
few years. We wish Rodney great success in his future endeavours"
said Jaguar Mining Chairman Dick
Falconer.
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").
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.
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.
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
and 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 June 30,
2018, is set out in the Company's second 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 June 30,
2018, is set out in the Company's second quarter 2018
MD&A filed on SEDAR at www.sedar.com.
CONTACT: Benjamin Guenther,
Interim Chief Executive Officer, Jaguar Mining Inc.,
bguenther@jaguarmining.com, 416-847-1854; Hashim Ahmed, Chief Financial Officer, Jaguar
Mining Inc., hashim.ahmed@jaguarmining.com, 416-847-1854
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