Jaguar Mining Reports 2017 Fourth Quarter and Financial Results; Strong Operating Cost Performance
TSX: JAG
TORONTO, March 29, 2018 /CNW/ - Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced details of the Company's financial and operating results for the fourth quarter ("Q4 2017") and year ended December 31, 2017 ("FY 2017"). Complete Financial Statements and Management's Discussion and Analysis are available on SEDAR and on the Company's website at www.jaguarmining.com. All figures are in US dollars, unless otherwise expressed.
"We are pleased with the strong operating cost performance in the fourth quarter and the year overall. In the second half of 2017 we significantly reduced total expenses due to a sharp focus on cost consciousness and improving productivity across the Company," said Rodney Lamond, President and Chief Executive Officer, Jaguar Mining. "We successfully deployed capital towards high priority exploration projects which have yielded excellent results including a significant increase in mineral resources as we have worked to develop Pilar. In 2017, Pilar delivered the highest level of gold production since 2013 and record average feed grade over the life of the mine. These results have translated into increased production expectations for Pilar going forward."
"Looking to 2018, we are maintaining our guidance range between 95,000 – 105,000 ounces, including Pilar. We are in a good position to see our lower expense-base translate to lower overall operating costs per ounce on a relatively less volatile Brazilian currency, as we expect to deliver increased production compared to 2017 and we have temporarily suspended operations at the higher cost Roca Grande Mine. We continue to be focused on increasing operating cash flow, investing capital in sustaining and growth projects and reducing debt. Delivering the highest profitable ounce production is a top priority, as becoming a lower cost producer is key to building shareholder value."
Q4 2017 Key Financial Highlights
- Operating costs decreased in Q4 2017 by 19.8% to $15.5 million, compared with $19.4 million in Q4 2016 due to focused efforts on delivering profitable production and company-wide expense reduction programs.
- Net income of $16.0 million and earnings per share $0.05 compared to net loss of $9.3 million and ($0.03) net loss per share in Q4 2016.
- Increased realized gold price of $1,278 per ounce, compared to $1,205 per ounce for Q4 2016, partially offset lower gold sales in Q4 2017. Revenue of $26.6 million, compared with $30.3 million in Q4 2016 due to lower production in Q4 2017.
- Cash operating costs ("COC") of $745 per ounce sold, compared to $735 in Q4 2016 and $809 in Q3 2017.
- All-in sustaining costs ("AISC") of 1,104 per ounce sold, compared to $1,098 in Q4 2016 and $1,168 in
Q3 2017. - Operating cash flow of $5.4 million, in line with expectations. Invested total capital of $6 million, including $4.9 million in sustaining capital expenditures.
- Free Cash Flow was $0.5 million and negative $5.1 million for Q4 2017 and FY 2017 respectively, based on operating cash flow less sustaining capital expenditures, compared to $2.3 million and $12.4 million in Q4 2016 and FY 2016 respectively.
- 2018 gold production guidance of 90,000–105,000 ounces.
- Cash balance of approximately $18.6 million as of December 31, 2017, compared to a cash balance of $19.2 million at September 30, 2017.
FY 2017 Key Financial Highlights
- Lower year-over-year gold production of 84,152 ounces compared to 96,608 ounces in 2016.
- Net loss of $2.8 million and ($0.01) net loss per share compared to net loss of $82.8 million and ($0.50) net loss per share in 2017.
- Invested total capital of approximately $24.6 million in 2017, which yielded significant exploration success from $4.6 million invested in exploration drilling. Increased definition, infill and exploration drilling metres by 28% to 48,498 meters compared to 2016.
- Cash operating costs of $837 per ounce of gold sold and AISC of $1,212 per ounce of gold sold.
2017 Fourth Quarter and Financial Results Summary
| ($ thousands, except where indicated) |
Three months ended |
Twelve months ended |
|||
| 2017 |
2016 |
2017 |
2016 |
||
| Financial Data |
|||||
| Revenue |
$ 26,626 |
$ 30,261 |
$ 105,231 |
$ 120,539 |
|
| Operating costs |
15,526 |
19,355 |
69,140 |
71,012 |
|
| Depreciation |
5,302 |
10,153 |
22,572 |
35,752 |
|
| Gross profit |
5,798 |
753 |
13,519 |
13,775 |
|
| Net income (loss) |
16,034 |
(9,280) |
(2,830) |
(82,795) |
|
| Per share ("EPS") |
0.05 |
(0.03) |
(0.01) |
(0.50) |
|
| EBITDA1 |
22,927 |
3,037 |
26,871 |
(38,671) |
|
| Adjusted EBITDA1,2 |
7,698 |
6,348 |
21,711 |
36,648 |
|
| Adjusted EBITDA per share1 |
$ 0.02 |
$ 0.02 |
$ 0.07 |
$ 0.22 |
|
| Cash operating costs ($ per ounce sold)1 |
745 |
735 |
837 |
719 |
|
| All-in sustaining costs ($ per ounce sold)1 |
1,104 |
1,098 |
1,212 |
1,099 |
|
| Average realized gold price ($ per ounce sold)1 |
1,278 |
1,205 |
1,256 |
1,239 |
|
| Cash generated from operating activities |
$ 5,387 |
$ 8,467 |
$ 14,968 |
$ 37,781 |
|
| Free cash flow1 |
502 |
2,295 |
(5,071) |
12,363 |
|
| Free cash flow ($ per ounce sold)1 |
24 |
91 |
(61) |
127 |
|
| Sustaining capital expenditures1 |
4,885 |
6,172 |
20,039 |
25,419 |
|
| Non-sustaining capital expenditures1 |
1,111 |
1,648 |
4,582 |
4,429 |
|
| Total capital expenditures |
$ 5,996 |
$ 7,820 |
$ 24,621 |
$ 29,848 |
|
| 1 Average realized gold price, sustaining and non-sustaining capital expenditures, cash operating costs |
|||||
| 2 Adjusted EBITDA excludes non-cash items such as impairment and write downs. |
|||||
| Three months ended |
Twelve months ended |
||||
| 2017 |
2016 |
2017 |
2016 |
||
| Operating Data |
|||||
| Gold produced (ounces) |
21,311 |
25,407 |
84,152 |
96,608 |
|
| Gold sold (ounces) |
20,841 |
25,110 |
83,750 |
97,277 |
|
| Primary development (metres) |
908 |
1,091 |
3,574 |
5,462 |
|
| Secondary development (metres) |
677 |
1,205 |
3,969 |
4,751 |
|
| Definition, infill, and exploration drilling (metres) |
13,973 |
9,914 |
48,498 |
37,860 |
|
Cash Position and Working Capital
- As at December 31, 2017, the Company had a cash balance of $18.6 million, compared to a cash balance of $26.3 million, as at December 31, 2016. During the fourth quarter, the Company received $2 million from Avanco for the second installment of the Accelerated Earn-in Agreement signed for the Gurupi Project on September 17, 2017.
- Stable working capital of $14.1 million as at December 31, 2017 compared to $11.3 million as at December 31, 2016.
2018 Guidance
- 2018 guidance for Turmalina Gold Mine ("Turmalina") and Caeté Mining Complex ("CCA") Pilar Gold Mine ("Pilar") and Roça Grande Mine ("RG").
- Pilar production guidance increased to 39,200 - 47,000 reflecting re-forecast for increased mineral resources reported in March 2018.
- RG performance reflects production from January 1 to March 21, 2018 as RG temporarily placed on care and maintenance.
| 2018 Production & Guidance cost |
CCA |
||||||||
| Turmalina |
Pilar |
RG |
Consolidated |
||||||
| Low |
High |
Low |
High |
Low |
High |
Low |
High |
||
| Gold production (ounces) |
50,000 |
57,000 |
39,200 |
47,000 |
800 |
1,000 |
90,000 |
105,000 |
|
| Cash Operating Cost (US$/oz sold) |
675 |
775 |
650 |
800 |
1,000 |
1,100 |
660 |
800 |
|
| All-in sustaining cost (US$/oz sold) |
900 |
1,000 |
900 |
1,050 |
1,050 |
1,200 |
920 |
1,100 |
|
| Sustaining Capex (US$'000) |
12,000 |
15,000 |
9,000 |
12,000 |
100 |
500 |
22,000 |
28,000 |
|
| Development |
|||||||||
| Primary waste (m) |
2,200 |
2,800 |
2,000 |
2,600 |
N/A |
N/A |
4,500 |
5,400 |
|
| Secondary ore (m) |
1,800 |
2,100 |
1,000 |
1,150 |
N/A |
N/A |
3,000 |
3,500 |
|
| Definition, infill and exploration drilling (m) |
18,000 |
25,000 |
14,000 |
20,000 |
200 |
300 |
35,000 |
50,000 |
|
2017 Exploration Success and Highlights
- The Company completed 13,973 metres and 48,498 metres of definition, infill, and exploration drilling during the three and 12 months ended December 31, 2017, respectively (Q4 2016 and FY 2016 – 9,914 metres and 37,860 metres respectively) focused on current orebody extensions at depth at both Turmalina and Pilar.
- Year-End 2017 Pilar Mineral Reserves and Mineral Resources Highlights:
- Total Measured Resources increased 277% to 317,000 ounces of gold, net of depletion, grading 4.47 g/t. Total Measured and Indicated ("M&I") Resources increased 10% to 532,000 ounces of gold at 4.37 g/t.
- Inferred Resources increased 104% to 433,000 ounces grading 5.69 g/t, reflecting successful growth exploration drilling campaign in 2017 targeting high-grade deeper extensions to the principle banded iron formation orebodies.
- Proven and Probable ("2P") Mineral Reserves of 125,000 ounces of gold, grading 3.99 g/t reflecting two-year replacement of mineral reserve depletion through production and addition of new mineral reserves.
- Interim Year-End 2017 Turmalina Mineral Resources Highlights:
- M&I Resources of 420,000 ounces of gold reflect full replacement of 45,000 ounces of 2017 mining depletion for Orebodies A, B and C. Measured Resources increased 8% to 265,000 ounces with a 6% increase in grade to 5.7 g/t.
- Inferred Resources increased 158% to 305,000 ounces of gold with a 14% increase in grade to 5.49 g/t, reflecting successful growth exploration drilling campaign in 2017 targeting high-grade deeper extensions to the orebodies.
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. 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 above 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.
SOURCE Jaguar Mining Inc.
Rodney Lamond, President & Chief Executive Officer, Jaguar Mining Inc., [email protected], 416-847-1854; Hashim Ahmed, Chief Financial Officer, Jaguar Mining Inc., [email protected], 416-847-1854
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