Record Net Income of $0.12/share and Operating Cash Flow of $12.0 Million
JAG - TSX/NYSE
Jaguar Mining Inc. ("Jaguar" or the "Company") (JAG: TSX/NYSE, JAG.NT: TSX) reports its financial and operational results for the period ended June 30, 2009. All figures are in U.S. dollars.
Q2 2009 Highlights - Q2 2009 net income of $9.7 million or $0.12 per basic and fully diluted share compared to a net loss of $0.4 million or $0.01 per basic and fully diluted share in Q2 2008. Net income for Q2 2009 benefitted from a 51% increase in the number of ounces of gold sold during the quarter and foreign exchange gains attributable to the Company's treasury management program. - Q2 2009 gold sales rose to 35,561 ounces at an average price of $922 per ounce yielding revenue of $32.8 million compared to Q2 2008 gold sales of 23,537 ounces at an average price of $900 per ounce and revenue of $21.2 million. This represents a 55% increase in gold sales revenue. - Q2 2009 gold production totaled 40,758 ounces at an average cash operating cost of $466 per ounce compared to 20,782 ounces at an average cash operating cost of $455 per ounce during the same period last year, a production increase of 96% (see Non-GAAP Performance Measures). - Q2 2009 gross profit increased to $9.1 million from $6.0 million in Q2 2008, a gross profit increase of 52%. - Q2 2009 cash provided by operating activities totaled $12.0 million compared to negative $1.2 million in Q2 2008. - Jaguar invested $20.1 million in growth projects in Q2 2009, down 33% from the $29.8 million invested in Q2 2008. - As of June 30, 2009 the Company held cash and cash equivalents of approximately $82.3 million, including $3.1 million of restricted cash. Restricted cash was required to maintain a facility for forward currency hedging. - Overall, Q2 2009 gold production was on target with the Company's 2009 Plan. Despite higher than planned costs, the Company's actual Q2 2009 cash operating margin (see Non-GAAP Performance Measures) of $456 per ounce slightly exceeded the Company's expected cash operating margin of $450 per ounce. Higher than planned gold realizations more than offset the increase in cash operating costs.
Commenting on the Q2 2009 results, Daniel R. Titcomb, Jaguar's President and CEO stated, "Our strong second quarter financial performance is another indication that Jaguar's focused effort continues to build shareholder value by growing our operations in tandem with sound financial management. As we continue with our organic growth initiatives, including the Phase I expansion of the Turmalina operation and the build-out of the Caeté Project, we believe our financial performance will steadily gain, including operating cash flow and earnings."
1st Half 2009 Highlights - For the six months ended June 30, 2009 net income of $14.5 million or $0.20 per basic share and $0.19 per fully diluted share compared to net income of $0.5 million or $0.01 per basic and fully diluted share for the same period in 2008. Net income during the first six months of 2009 benefitted from a 63% increase in the number of ounces of gold sold during the quarter as well as foreign exchange gains. - First half 2009 gold sales rose to 71,440 ounces at an average price of $925 per ounce yielding revenue of $66.1 million compared to gold sales of 43,880 ounces at an average price of $911 per ounce and revenue of $40.0 million for the same period in 2008. - First half 2009 gold production totaled 73,627 ounces of gold at an average cash operating cost of $440 per ounce compared to 42,195 ounces at an average cash operating cost of $442 per ounce during the same period last year (see Non-GAAP Performance Measures). - Gross profit for the six months ended June 30, 2009 increased to $20.4 million from $13.3 million during the same period in 2008. - Cash provided by operating activities during the first half of 2009 totaled $17.9 million compared to negative $3.4 million during the first half of 2008. - Invested $25.6 million in growth projects during the first half of 2009, down from the $55.6 million invested during the same period in 2008. - Achieved underground development targets of 6.4 km for the six months ended June 30, 2009. - On-schedule for the Turmalina expansion and primary installations at the Caeté Project. Summary of Key Operating Results The following is a summary of key operating results. --------------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 --------------------------------------------------- 2009 2008 2009 2008 --------------------------------------------------- (unaudited) ($ in 000s, except per share amounts) Gold sales $ 32,786 $ 21,187 $ 66,072 $ 39,984 Ounces sold 35,561 23,537 71,440 43,880 Average sales price $ / ounce 922 900 925 911 Gross profit 9,111 6,013 20,405 13,349 Net income (loss) 9,724 (351) 14,483 487 Basic earnings (loss) per share 0.12 (0.01) 0.20 0.01 Diluted earnings (loss) per share 0.12 (0.01) 0.19 0.01 Weighted avg. # of shares outstanding - basic 77,957,007 64,161,622 73,315,017 61,796,255 Weighted avg. # of shares outstanding - diluted 79,787,135 64,161,622 74,685,075 65,311,115 Additional details are available in the Company's filings on SEDAR and EDGAR, including Management's Discussion and Analysis of Financial Condition and Results of Operations and Interim Consolidated Financial Statements for the period ended June 30, 2009. 2009 Outlook The Company's 2009 production and cash operating cost estimates are as follows: ------------------------------------------------------------------------- Actual Estimated Actual Estimated Estimated ------------------------------------------------------------------------- Operation 1st Half FY 2009 1st Half 2nd Half FY 2009 2009 2009 2009 ------------------------------------------------------------- Production Production Cash Cash Cash Operating Operating Operating Cost Cost Cost ------------------------------------------------------------- (oz) (oz) ($/oz) ($/oz) ($/oz) ------------------------------------------------------------------------- Turmalina 38,638 85,000-90,000 $377 $369-409 $373-395 ------------------------------------------------------------------------- Paciência 30,037 65,000-70,000 $490 $355-394 $417-435 ------------------------------------------------------------------------- Sabara 4,952 15,000 $628 $587-653 $601-641 ------------------------------------------------------------------------- Total 73,627 165,000-175,000 $440 $388-430 $411-426 ------------------------------------------------------------------------- Note: Estimated 2nd Half 2009 cash operating costs based on R$2.0 to R$1.8 per $1.00. FY2009 cash operating cost estimate includes 1st Half actual based on average of R$2.20 per $1.00
Non-GAAP Performance Measures
The Company has included the non-GAAP performance measures discussed below in this press release. These non-GAAP performance measures do not have any standardized meaning prescribed by Canadian GAAP ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, these non-GAAP measures provide investors with additional information that will better enable them to evaluate the Company's performance. Accordingly, these Non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.
The Company has included cash operating cost per ounce processed and cash operating margin per ounce because it believes these figures are a useful indicator of a mine's performance as they provide: (i) a measure of the mine's cash margin per ounce, by comparison of the cash operating costs per ounce to the price of gold; (ii) the trend in costs as the mine matures; and, (iii) an internal benchmark of performance to allow for comparison against other mines. The definitions for these performance measures and reconciliation of the non-GAAP measures to reported GAAP measures are set out in the following tables.
-------------------------- Three Months Six Months Ended June Ended June Cash Operating Margin per oz of gold 30, 2009 30, 2009 -------------------------- Average sales price per oz of gold $ 922 $ 925 less Cost per oz of gold produced 466 440 equals Cash operating margin per oz of gold $ 456 $ 485 -------------------------- Summary of Cash Operating Cost per tonne Three Months Six Months processed Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs per statement of operations(1) $17,535,000 $33,517,000 Change in inventory(2) 850,000 (1,436,000) Operational cost of gold produced(3) 18,385,000 32,081,000 divided by Tonnes processed 415,011 689,921 equals Cost per tonne processed $ 44.30 $ 46.50 -------------------------- Turmalina Cash Operating Cost per tonne Three Months Six Months processed Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs $ 7,626,000 $15,347,000 Change in inventory(2) 327,000 (677,000) Operational cost of gold produced(3) 7,953,000 14,670,000 divided by Tonnes processed 135,843 256,016 equals Cost per tonne processed $ 58.60 $ 57.30 -------------------------- Paciência Cash Operating Cost per tonne Three Months Six Months processed Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs $ 8,380,000 $15,581,000 Change in inventory(2) (1,202,000) (1,397,000) Operational cost of gold produced(3) 7,178,000 14,184,000 divided by Tonnes processed 145,146 299,883 equals Cost per tonne processed $ 49.50 $ 47.30 -------------------------- Sabara Cash Operating Cost per tonne Three Months Six Months processed Ended June Ended June 30, 2009 30, 2009 -------------------------- Production cost $ 1,529,000 $ 2,589,000 Change in inventory(2) 1,725,000 638,000 Operational cost of gold produced(3) 3,254,000 3,227,000 divided by Tonnes processed 134,022 134,022 equals Cost per tonne processed $ 24.30 $ 24.10 -------------------------- Summary of Cash Operating Cost per oz of gold Three Months Six Months produced Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs per statement of operations(1) $17,535,000 $33,517,000 Change in inventory(2) 1,458,000 (1,121,000) Operational cost of gold produced(3) 18,993,000 32,396,000 divided by Gold produced (oz) 40,758 73,627 equals Cost per oz of gold produced $ 466 $ 440 -------------------------- Turmalina Plant Cash Operating Cost per oz Three Months Six Months produced Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs $ 7,626,000 $15,347,000 Change in inventory(2) 406,000 (779,000) Operational cost of gold produced(3) 8,032,000 14,568,000 divided by Gold produced (oz) 19,868 38,637 equals Cost per oz of gold produced $ 404 $ 377 -------------------------- Paciência Plant Cash Operating Cost per oz Three Months Six Months produced Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs $ 8,380,000 $15,581,000 Change in inventory(2) (554,000) (863,000) Operational cost of gold produced(3) 7,826,000 14,718,000 divided by Gold produced (oz) 15,939 30,037 equals Cost per oz of gold produced $ 491 $ 490 -------------------------- Sabara Cash Operating Cost per oz Three Months Six Months produced Ended June Ended June 30, 2009 30, 2009 -------------------------- Production costs $ 1,529,000 $ 2,589,000 Change in inventory(2) 1,606,000 521,000 Operational cost of gold produced(3) 3,135,000 3,110,000 divided by Gold produced (oz) 4,952 4,952 equals Cost per oz of gold produced $ 633 $ 628 (1) Production costs do not include cost of goods sold adjustment of approximately $1.0 million for the three months ended June 30, 2009 and $2.1 million for the six months ended June 30, 2009. (2) Under the Company's revenue recognition policy, revenue is recognized when legal title passes. Since total cash operating costs are calculated on a production basis, this change reflects the portion of gold production for which revenue has not been recognized in the period. (3) The basis for calculating cost per ounce produced includes the change to gold in process inventory, whereas the cost per tonne processed does not. The following tables are included in Jaguar's audited financial statements as filed on SEDAR and readers should refer to those filings for the associated footnotes which are an integral part of the tables. Interim Consolidated Balance Sheets (Expressed in thousands of U.S. dollars) ------------------------------------------------------------------------- June 30, December 31, 2009 2008 ------------------------------------------------------------------------- (unaudited) Assets Current assets: Cash and cash equivalents $ 79,220 $ 20,560 Inventory 24,221 19,946 Prepaid expenses and sundry assets 6,821 5,351 ------------------------------------------------------------------------- 110,262 45,857 Prepaid expenses and sundry assets 37,255 26,164 Net smelter royalty 1,006 1,006 Restricted cash 3,107 3,106 Property, plant and equipment 156,266 148,422 Mineral exploration projects 86,015 79,279 ------------------------------------------------------------------------- $ 393,911 $ 303,834 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 18,044 $ 13,416 Notes payable 5,332 4,319 Income taxes payable 10,342 8,626 Asset retirement obligations 1,101 1,337 Unrealized foreign exchange losses - 2,421 ------------------------------------------------------------------------- 34,819 30,119 Deferred compensation liability 2,672 434 Notes payable 71,602 69,729 Future income taxes 2,483 - Asset retirement obligations 7,162 6,828 ------------------------------------------------------------------------- Total liabilities 118,738 107,110 Shareholders' equity Common shares 308,924 245,067 Stock options 19,168 19,059 Contributed surplus 1,167 1,167 Deficit (54,086) (68,569) ------------------------------------------------------------------------- 275,173 196,724 Commitments ------------------------------------------------------------------------- $ 393,911 $ 303,834 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interim Consolidated Statements of Operations and Comprehensive Income (Expressed in thousands of U.S. dollars, except per share amounts) (unaudited) ------------------------------------------------------------------------- Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 ------------------------------------------------------------------------- Gold sales $ 32,786 $ 21,187 $ 66,072 $ 39,984 Production costs (18,568) (12,795) (35,651) (22,141) Stock-based compensation (155) - (181) - Depletion and amortization (4,952) (2,379) (9,835) (4,494) ------------------------------------------------------------------------- Gross profit 9,111 6,013 20,405 13,349 ------------------------------------------------------------------------- Operating expenses: Exploration 691 1,037 1,330 1,849 Stock-based compensation 1,090 219 2,084 493 Administration 4,059 2,897 7,821 5,915 Management fees 278 186 802 375 Amortization 114 53 216 107 Accretion expense 192 65 380 135 Other 141 (578) 895 416 ------------------------------------------------------------------------- Total operating expenses 6,565 3,879 13,528 9,290 ------------------------------------------------------------------------- Income before the following 2,546 2,134 6,877 4,059 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Loss on forward derivatives - - - 318 Gain on forward foreign exchange derivatives (540) (1,191) (827) (1,584) Foreign exchange gain (10,414) (5,691) (12,992) (7,939) Interest expense 2,650 3,088 4,864 7,158 Interest income (1,251) (1,457) (1,750) (2,702) Gain on disposition of property (455) - (915) - Other non-operating expenses (recovery) - (313) 741 (371) ------------------------------------------------------------------------- Total other expenses (recoveries) (10,010) (5,564) (10,879) (5,120) Income before income taxes 12,556 7,698 17,756 9,179 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income taxes Current income taxes 349 1,840 790 4,221 Future income taxes 2,483 6,209 2,483 4,471 ------------------------------------------------------------------------- Total income taxes 2,832 8,049 3,273 8,692 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income (loss) and comprehensive income (loss) for the period 9,724 (351) 14,483 487 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic net income (loss) per share $0.12 $(0.01) $0.20 $0.01 Diluted net income (loss) per share $0.12 $(0.01) $0.19 $0.01 Weighted average number of common shares outstanding - Basic 77,957,007 64,161,622 73,315,017 61,796,255 Weighted average number of common shares outstanding - Diluted 79,787,135 64,161,622 74,685,075 65,311,115 Interim Consolidated Statements of Cash Flows (Expressed in thousands of U.S. dollars) (unaudited) ------------------------------------------------------------------------- Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 ------------------------------------------------------------------------- Cash provided by (used in): Operating activities: Net income (loss) and comprehensive income (loss) $ 9,724 $ (351) $ 14,483 $ 487 Items not involving cash: Unrealized foreign exchange gain (5,633) (2,869) (8,665) (1,695) Stock-based compensation 1,245 219 2,265 493 Non-cash interest expense 683 586 1,044 1,979 Accretion expense 192 65 380 135 Future income taxes 2,483 6,209 2,483 4,471 Depletion and amortization 5,066 2,379 10,052 4,494 Amortization of net smelter royalty - 80 - 157 Unrealized loss (gain) on foreign exchange contracts (880) (535) (2,421) 343 Reclamation expenditure (283) - (283) - ------------------------------------------------------------------------- 12,597 5,783 19,338 10,864 Change in non-cash operating working capital Accounts receivable - (2,021) - (7,800) Inventory (2,860) (1,752) (3,164) (2,371) Prepaid expenses and sundry assets (4,605) (4,387) (4,879) (8,139) Accounts payable and accrued liabilities 5,277 (621) 4,858 856 Current taxes payable 1,547 1,840 1,717 3,164 ------------------------------------------------------------------------- 11,956 (1,158) 17,870 (3,426) Financing activities: Issuance of common shares, special warrants and warrants, net 226 153 63,692 105,803 Increase in restricted cash (1) - (1) - Shares purchased for cancellation - (2,780) - (3,442) Settlement of forward derivatives - - - (14,500) Repayment of debt (2,274) (3,565) (2,561) (14,793) Increase in debt - - - 3,867 ------------------------------------------------------------------------- (2,049) (6,192) 61,130 76,935 Investing activities Mineral exploration projects (5,440) (12,200) (7,109) (22,394) Purchase of property, plant and equipment (14,640) (17,574) (18,538) (33,229) ------------------------------------------------------------------------- (20,080) (29,774) (25,647) (55,623) Effect of foreign exchange on non-U.S. dollar denominated cash and cash equivalents 4,702 1,727 5,307 (2,322) Increase (decrease) in cash and cash equivalents (5,471) (35,397) 58,660 15,564 Cash and cash equivalents, beginning of period 84,691 96,672 20,560 45,711 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 79,220 $ 61,275 $ 79,220 $ 61,275 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Conference Call Details The Company will hold a conference call tomorrow, August 11 at 10:00 a.m. ET, to discuss the results. From North America: 800-218-5691 International: 213-416-2192 Replay: From North America: 800-675-9924 International: 213-416-2185 Replay ID: 81109 Webcast: www.jaguarmining.com
A presentation will be available prior to the call on the Company's homepage at www.jaguarmining.com.
About Jaguar Mining
Jaguar is one of the fastest growing gold producers in Brazil with operations in a prolific greenstone belt in the state of Minas Gerais. Jaguar is actively exploring and developing additional mineral resources at its 93,000-acre land base in Minas Gerais and on an additional 182,000 acres in the state of Ceara in the Northeast of Brazil through a joint venture. The Company has no gold hedges in place thereby providing the leverage to gold prices directly to its investors. Additional information is available on the Company's website at www.jaguarmining.com.
Forward Looking Statements
Certain statements in this press release constitute "Forward-Looking Statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. This press release contains Forward-Looking Statements, including statements concerning steadily gain of the Company's financial performance, including operating cash flow and earnings. Forward-Looking Statements can be identified by the use of words, such as "are expected", "is forecast", "is targeted", "approximately" 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. Forward-Looking Statements involve known and unknown risks, uncertainties and other factors, which may cause the actual timing of commissioning, completion dates or use of proceeds to be materially different from any future results or performance expressed or implied by the Forward-Looking Statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating gold prices and monetary exchange rates, the possibility of project cost delays and overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, uncertainties related to production rates, timing of production and the cash and total costs of production, changes in applicable laws including laws related to mining development, environmental protection, and the protection of the health and safety of mine workers, the availability of labour and equipment, the possibility of labour strikes and work stoppages and changes in general economic conditions. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. These forward-looking statements represent the Company's views as of the date hereof. Subsequent events and developments could cause the Company's views to change. The Company does not undertake to update any forward-looking statements, either written or oral, that may be made from time to time by or on behalf of the Company subsequent to the date of this discussion. For a discussion of important factors affecting the Company, including fluctuations in the price of gold and exchange rates, uncertainty in the calculation of mineral resources, competition, uncertainty concerning geological conditions and governmental regulations and assumptions underlying the Company's forward-looking statements, see the "CAUTIONARY NOTE" regarding forward-looking statements and "RISK FACTORS" in the Company's Annual Information Form for the year ended December 31, 2008 filed on System for Electronic Document Analysis and Retrieval and available at http://www.sedar.com and the Company's Annual Report on Form 40-F for the year ended December 31, 2008 filed with the United States Securities and Exchange Commission and available at www.edgar.com.
Investors and analysts:
Bob Zwerneman, Vice President Corporate Development and
Director of Investor Relations,
(603) 224-4800,
bobz@jaguarmining.com;
Media inquiries:
Valéria Rezende DioDato, Director of Communication,
(603) 224-4800,
valeria@jaguarmining.com