Jaguar Mining Finances Turmalina Gold Mine with US$14 Million Debt Facility

Dec 21, 2005 Download PDF

Jaguar Mining Inc. ("Jaguar") (JAG - TSX) has obtained a $14,000,000 debt facility provided by RMB International (Dublin) Ltd., a member of the FirstRand Group, and arranged by RMB Resources Inc. of Lakewood, Colorado. All figures are in United States dollars unless stated otherwise.

The $14,000,000 facility will be used primarily to complete the funding of the construction and start-up of the Turmalina gold mine. Up to $2,250,000 of the loan may be used for the Sabará project, which is nearing completion. Jaguar believes that obtaining the loan for Turmalina from a well-known provider of mining project finance confirms its belief in the economic merits of the project and will benefit shareholders by its non-dilutive financing of production and exploration growth. This financing frees internal capital for Jaguar to expand exploration and/or acquisition of other projects.

Loan funds may be drawn over a period commencing upon the satisfaction of certain conditions and ending September 30, 2006. Undrawn funds are subject to a commitment fee of interest of 1.25% per annum, payable quarterly in arrears. Once funds are drawn, the loan bears interest at LIBOR plus 4% per annum and will be repayable in ten quarterly payments of $1,400,000 beginning fifteen months after initial funding. The loan is secured by the Turmalina and Sabará project assets owned by Jaguar's wholly-owned Brazilian subsidiaries, and also by other guarantees and pledges typical of this kind of loan.

In order to meet certain loan criteria, Jaguar has hedged 77,000 ounces of gold production during the loan pay-back period (approximately 7,700 ounces per quarter for ten quarters) at an average price of $527 per ounce. Jaguar remains substantially unhedged on its overall production program.

The Turmalina Project
The NI 43-101 report for Turmalina (available at states that the mine will produce 60,000 oz of gold per year. The mineral reserve is 370,000 oz of gold contained in 1.9 million tonnes of ore grading 6.0 g/t. Jaguar is actively exploring at Turmalina and expects to release additional results during January 2006.

Mr. Graham G. Clow, P.Eng. and Mr. Wayne W. Valliant, P.Geo. of Roscoe Postle Associates Inc., both of whom are certified under NI 43-101 as a Qualified Person, wrote the NI 43-101 report.

Warrants Issued
As partial compensation for providing the loan, RMB International received unlisted warrants to purchase 1,093,835 Jaguar common shares with an exercise price of Cdn.$4.50. The expiration date will depend on the date of the initial draw of the loan and will be no earlier than June 30, 2009 and no later than March 31, 2010. As part of its arrangement fee RMB Resources received 350,000 listed Jaguar common stock purchase warrants (JAG.WT -- TSX) with an exercise price of Cdn.$4.50 and an expiration date of December 31, 2007.

Auramet Trading, LLC of Fort Lee, New Jersey advised Jaguar on this transaction. As part of its compensation, Auramet received unlisted warrants to purchase 300,000 Jaguar common shares with an exercise price of Cdn.$3.90 and an expiration date of December 12, 2007.

Jaguar produces gold in the Iron Quadrangle region of Brazil. Using its experience and strong local relationships, Jaguar has acquired quality gold resources from senior mining companies and is preparing feasibility studies with a goal of converting significant portions of the acquired resources to reserves. It owns 62,500 acres of gold properties, which is the second largest gold property portfolio in the region, and continues to seek acquisitions to strengthen its position. Jaguar has 33,346,337 common shares outstanding (47,031,022 fully diluted). After issuance of the warrants described above, Jaguar has 5,112,500 listed warrants outstanding.

For further information, please contact Daniel Titcomb, President, James Roller, Chief Financial Officer on (603) 224-4800 or Robert Jackson, EVP, Corporate Development on (416) 725-4343.

This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Such statements are only predictions, and the Company's actual financial conditions and results of operations could differ materially from those that may be contemplated by these forward looking statements and the assumptions upon which they are based as a result of those risks and uncertainties. For a discussion of important factors affecting the Company, see the "DESCRIPTION OF THE COMPANY'S BUSINESS" and in particular the subsection entitled "Risk Factors" in the Company's Annual Information Statement for the year ended December 31, 2004 filed on SEDAR and available at Jaguar's securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or resold in the United States or to a U.S. person absent registration or an applicable exemption from the registration requirements.